Is Chili Mac next on the list of bailouts?

By S.J. Masty

Tomorrow, After Lunch - The epic nationalization of mortgage giants Fannie Mae and Freddie Mac is expected to cost taxpayers "between $50 billion and $500 billion" or more, say economists abandoning pocket calculators for a dartboard.

Next, Lehman Brothers sold the cow for a handful of magic beans and were allowed to collapse. But it is an election year, government's heels are rounder than usual, so it may not be the end of the bailouts.

Both presidential candidates have responded dynamically by adopting a concerned, mature, "I've got gas" expression as though they are auditioning for Alka Seltzer ads, then saying that somebody needs to do, um, something.

Republican John McCain - standing for smaller government, paying debts and rugged individualism - won't admit that the supposed remedy for Fannie Mae and Freddie Mac is pure socialism, as found in those goofy little Third World countries whose legislatures vote to repeal the law of gravity, and earn most of their Gross National Product by selling postage stamps to collectors.

For Democrat Barack Obama, who has never seen a problem that cannot be solved by borrowing your Visa card, blowing a few hundred billion is probably, well, necessary. Change we need - because all the folding money is going to Washington.

Meanwhile, none of the candidates has dared to speak out on another crisis: Chili Mac.

For more on this commentary, go to The D.C. Examiner

Fannie and Freddie bailout latest tale of American socialism

The faux Fannie and Freddie bailout figures

by Don A. Rich

A recent study from the Congressional Budget Office (CBO) has zero credibility. It pegged likely taxpayer losses in the Fannie Mae and Freddie Mac bailouts at $25 billion. For those with a sense of history, it is worth remembering that the S&L bailout had a $160 billion price tag. The numbers diverge so far from reality as to be laugh-out-loud funny. Funny, that is, except that the CBO estimate demonstrates a willful disconnect with the actual consequences of federal government actions.

As demonstrated below, the real cost of the bailouts will easily exceed $1.3 trillion. In fact, the real cost is likely to range between $1.3 trillion to $1.6 trillion, and is not unlikely to reach $2.5 trillion.

For more on this commentary, go to The Ludwig von Mises Institute

Fannie and Freddie bailout 101

by William L. Anderson

One way to make someone’s eyes glaze over is to explain the various relationships in financial matters. Discussions of swaps, equity, options, short-selling and the like quickly become technical and esoteric, and most people instantly tune out what is being said.

Unfortunately, this situation convinces people that finance is complicated and cannot be understood – and so it must be left to the "experts" who are assumed to know better. Thus, the average person – the taxpayer who will be left on the hook – does not really understand why entities like "Freddie Mac" and "Fannie Mae" are in trouble, and why their "bailouts" are a disaster. They only know that the people who are supposed to be "in charge" of these things are declaring success

For more on this op/ed, go to LewRockwell.com

History about to repeat itself in bailout of mortgage industry

by Llewellyn H. Rockwell, Jr.

Ludwig von Mises had a theory about interventionism. It doesn't accomplish its stated ends. Instead it distorts the market. That distortion cries out for a fix. The fix can consist in pulling back and freeing the market or taking further steps toward intervention. The State nearly always chooses the latter course, unless forced to do otherwise. The result is more distortion, leading eventually, by small steps, toward ever more nationalization and its attendant stagnation and bankruptcy.

When you think about the current Fannie Mae-Freddie Mac crisis, you must remember Mises's theory of intervention. Reporters will not, but you must, provided you want to understand what is going on. President Bush is considering a fateful step in a 60-year-old problem: the nationalization of these mortgage companies. He wants to guarantee the $5 trillion (that's trillion with a "t") in debt owned by these companies. Another option would be to put these monstrosities under "conservatorship," which means that you and I will pay for their losses directly.

Either way, it turns out that there is no magic way to put every American citizen, regardless of financial means or credit history, in a 3,000 square foot home. Someone, somewhere, sometime has to pay. No matter what rescue plan they are able to cobble together, that someone is you.

For more on this op/ed, go to LewRockwell.com