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To: dynachrome

Privatize the profits, socialize the losses.


29 posted on 09/19/2008 3:51:16 PM PDT by SpaceBar
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To: SpaceBar; dynachrome; rockabyebaby
Savage saying we have a state-run economy because of Fannie Mae and Freddie Mac? He's a little late coming to the party isn't he?

The state-run economy has been a reality because of the size of the federal government and the federal tax rate. Fannie Mae and Freddie Mac have always been tied to the federal government. Why suddenly are these entities and Bush the Socialist Nazis? Bush's "Compassionate Conservatism" was a tip-off in 2000, that we were going to get more big-government. Theodore Roosevelt's income tax, FDR's New Deal (which I don't think Savage understands clearly), and the erosion of our U.S. Constitution are the foundation for our current socialist malaise.

Regarding Fannie Mae and Freddie Mac, the best thing I've read so far was in Forbes (excerpt below):

Commmentary Bust Up These Beasts by Steve Forbes 07.28.08, 6:00 AM ET: The Treasury/Fed/Congressional rescue of Fannie Mae and Freddie Mac is only a stopgap. Unless fundamentally restructured, these two debt-bloated giants will sooner or later blow up. The once implicit, now explicit, government guarantee for these two quasi-government entities was the reason that they could be leveraged to the hilt, with a debt-to-equity ratio of almost 25-to-1. Instead of just packaging mortgages and selling them off, the companies kept hundreds of billions in these instruments in their own portfolios to fatten profits--and enrich their politically connected managers and political allies. They also went into the junk-mortgage business, buying more than $170 billion worth of dodgy paper...What are the odds of such a sensible approach? Not good. Why? Because the two most mammoth political powerhouses in America today are Fannie Mae and Freddie Mac. Their lobbying muscle makes Arnold Schwarzenegger look like a 90-pound weakling. Directly and indirectly, they employ legions of ex-pols to help them on the Hill. They hand out largesse of one sort or another to any pol who matters and is willing to take it. Fannie Mae's "charitable" operations have field people in virtually every congressional district.

http://www.forbes.com/opinions/2008/07/26/fannie-mae-freddie-mac-oped-cx_sf_0728steveforbes.html

40 posted on 09/19/2008 4:17:29 PM PDT by Jim W N
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