Taxpayers to be made to pay for corrupt GSEs’ lending mistakes
Hank Paulson to bail out his Wall Street pals at your expense
Well, McCain and Obama both opposed a taxpayer bailout of Fannie Mae and Freddie Mac
Just before Labor Day, Sen. Obama derided Fannie and Freddie as a “weird blend,” advocating that “If these are public entities, then they’ve got to get out of the profit-making business, and if they’re private entities, then we don’t bail them out.” He said later that he has “no sympathy” for the CEOs of Fannie and Freddie, and that the government shouldn’t bail out “investors who had made a killing.”
McCain, similarly, railed in an editorial that “if elected, I’ll continue my crusade for the right reform of the institutions: making them go away. I will get real regulation that limits their ability to borrow, shrinks their size until they are no longer a threat to our economy, and privatizes and eliminates their links to the government.” McCain attributed the growth of the agencies to “crony capitalism,” and Washington selling out to Wall Street.
We support energetic federal investigation and, where appropriate, prosecution of criminal wrongdoing in the mortgage industry and investment sector. We do not support government bailouts of private institutions. Government interference in the markets exacerbates problems in the marketplace and causes the free market to take longer to correct itself.
Nevertheless, U.S. Treasury Secretary Henry Paulson is selling your children into debt in order to bail out his Wall Street pals. Initial estimates put the likely cost to taxpayers in the hundreds of billions, with the chief beneficiaries being large speculators in Fannie and Freddie debt, led by Communist China and billionaire Bill Gross’s PIMCO.