Tuesday, September 23, 2008

An Unintended Consequence of the Federal Bailout

I know what you're thinking: "Not another story about the federal bailout of Freddie Mac and Fannie Mae." Well, either that or "Why is Willam Dafoe so creepy?" That second part I can't answer, but the first one I can. Yes, I will be writing about the bailout, but not from the perspective you think.

While we sort through the financial mess left in the wake of the Fannie Mae and Freddie Mac failures, there's one group of people who have said a lot, but aren't really speaking up too much about their role in the mess. In fact, amid their talk of how things are worse now than the 1929 stock market crash and how there needs to be more government oversight, they're not really going into how the situation began. And if you've been paying attention to the news stories that have linked high-ranking Democrats to the scandals, you can see why.

Here's where the unintended consequence comes into play. Because the Democrats so screwed up Freddie and Fannie and were in bed with them for a long time, they have a lot riding on the bailout. Regardless of what they say or do, they need President Bush's help to make sure they don't get caught. And Bush, being a bit smarter than his critics give him credit for being, understands the implications of two big mortgage companies going under, so he's taking actions that are greatly unpopular, but could wind up being necessary. We can debate the rationale behind the bailout until the cows (or Congress, for that matter) come home, but that's not the point here.

By bailing out Freddie Mac and Fannie Mae, Bush may be bailing out the Democrats.

Today's news gave us a ray of hope, though. The FBI is investigating those responsible for the Freddie/Fannie situation. If they do their jobs (or are allowed to), we could see some of the Democrats trying to push the blame for the situation onto Bush being brought before Congress (or possibly a court of law) to explain their actions. If not, the Democrats will get away with their financial irresponsibility and we'll get to pay for it.

And we're supposed to believe these nozzleheads are better for the economy?

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