Hats of to Obama. He is now doing what should have been done 50 years ago, attempting to get rid of Fannie and Freddie and get the federal government (mostly) out of the loan guarantee business. I'd be happier if the feds got out entirely, but mostly out is better than where we've been since FDR and the Democrats in Congress created the agency and LBJ kicked it out into the private sector because he wanted to give at least an appearance of reducing the federal deficit for political profit.
These two federally chartered GSEs received nearly as much TARP money as AIG, Wells Fargo, Citigroup, Bank of America, and JP Morgan Chase combined received. Their implicit guarantee is what necessitated TARP to begin with to prevent the federal government from defaulting on the guarantees it had made on the mortgage backed securities that were sold as assets to all of the banks.
The federal government should never have been involved in guaranteeing mortgages to begin with, never involved itself in recapitalizing banks to induce lending more money out for home mortgages, never placed the taxpayers on the hook for a default on any loan of any kind. It shouldn't be guaranteeing student loans, shouldn't be guaranteeing pensions other than the ones for retired military and federal employees. All of it promotes the federal government picking winners and losers instead of being an impartial bystander.
Kudos where kudos is due - well done Mr. President.
