“Fannie Mae and Freddie Mac are failing and the only way to really save them – and American taxpayers – may be to take them over.”
So begins Too big to fail, from those crazy kids at the San Francisco Chronicle editorial desk. But, they continue:

Global investors are wise to the institutions’ problems, and they’re not going to keep throwing good money after bad. If only [Treasury Secretary Henry] Paulson and [Federal Reserve Chief Ben] Bernanke felt the same.
Instead, they’re going wobbly about the need for a wholesale restructuring of Fannie Mae and Freddie Mac that would return the institutions to their pre-1968 form as entirely government enterprises. Claiming only a minority stake in them would make their Wall Street friends happy and fit with conservative ideology, but it’s bad for taxpayers and bad for the country’s financial health. If taxpayers are going to be on the hook for the companies’ mistakes, why can’t we share some of the companies’ still-enormous assets? And if we have to pay through the nose for the mistakes of private investors, why can’t we have a say in the way they run their businesses? (Hint: it would involve a return to plain-vanilla lending and thorough regulation, instead of all the envelope-pushing lending that the two giants engaged in over the last few years.)

Internalizing profits and outsourcing risk is a time-honored tradition. Trouble is, it may be unstable as well as immoral.

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