The bailout

Posted at 12:11 PM on September 8, 2008 by Bob Collins (3 Comments)
Filed under: Economy

No sense beating around the bush. Should the government be bailing out Fannie Mae and Freddie Mac?

Yes, say those who think the financial markets needed to be reassured.

No, say those who suggest it'll force more banks to fail.

Yes, say those who want to refinance or buy a house.

No, say those who think it amounts to American taxpayers bailing out the rich boys.

Yes, say those who say it'll stem the crisis and turn things around.

No, say those who say the crisis is coming anyway.

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Comments (3)

Yes, we the taxpayers should keep fannie & freddy solvent. But we should also insist on a more transparent & regulated financial system in the future so we (taxpayers) don't have to keep saving corporate entities that are 'too big to fail'. A properly designed market should be able to survive failures of large institutions without gov't intervention.

Posted by bsimon | September 8, 2008 12:55 PM

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No, taxpayers pay with little ability to keep those in power accountable; investors (which could be the very same people) monitor and vote with their pocketbooks. The government should only act as a regulator and provide a market for the sale (lender/investor) and purchase (borrower) of mortgages. If the regulations provide high quality and clear information from the borrower to the investor, market forces (within non-mafioso loan terms [e.g. interest rates, down payments]) will price risk and return accordingly.
It's a web-based, Bailey's Savings & Loan from, "It's a Wonderful Life": your money isn't sitting in a bank (which it isn't anyway), it's in so-and-so's house.
Speaking of S&L's, the only thing bailing them out back in late 80's and early 90's did was give the largest investors fire sale prices and great returns. We can do it better this time.

Posted by MMyers | September 8, 2008 3:15 PM

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I really liked the concise re-cap of the bailout opinions out there. It's the best nutshell I've seen in a while.

Posted by Lucie Amundsen | September 9, 2008 10:56 AM

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