Fannie and Freddie - Two of a Kind

[Phaedrus]

So, what is more "Socialist" than a government supported, funded and founded company designed to lend poor people money for houses they cannot afford?

CYKOFAN - there is NOTHING "capitalist" about Fannie and Freddie....

[CYKOFAN]

I realize that the origins of fanny and freddy are different than most companies, but didn't it become a publicly traded company like any other where you can buy and sell their stock, and it isn't run by government employees is it? How is the government backing of fanny and freddy much different than the government stepping in to save Bear-Stearns or Indy-Mac? And isn't it true that saving fanny and freddy especially helped big firms on wall street that stood to lose huge sums of money if they went under (just like Bear Stearns)?

[alaskaguy]

There are more than those two companies that have been bailed out (and probably more to come), and there are plenty of rich republicans that stand to lose big money if fanny and freddy go under. Now who's bailing them out? Like I said, republicans like Bush and Bernanke quickly turn socialist when their wall street friends' money is at stake (I'll avoid returning the rectum comment).

It is abundantly clear that both political parties, and even hope and change "Obama" have close ties to FNMA and FHLMC.

Link:
washingtonpost.com

[alaskaguy]

jmb- I agree with you to a point, but a purely free market system without fair regulatory laws tends to lead to a two class system with a small super-wealthy class and masses of poor (it happened to America at the turn of the last century). Those that have a lot of money have a lot of power (or the money to influence those in power). It's just human nature that greed often trumps fairness, and sooner or later you get those at the top making over 400 times what those at the bottom make (sound familiar?). I know that's the free market but do you really think it's fair for the ceo and top execs to make 400 times what the lower workers make when they are the ones that actually build the product or run the day to day operations of the company?

I thought that with a socialist system you end up with the bureaucrats controlling all the power and wealth (ie. the super wealthy class) while the mass of population is poor.

There is something about demand and supply that dictates that some people may end up earning substantially more than others. In other words when there is a shortage of skilled CEOs, and great baseball players, these occupations end up earning substantially more than factory workers.

On either an economic or even a social level I don't have a problem with CEOs making tons of money. Shareholders should be willing to pay a CEO $50 a piece if doing so makes the share price that much fatter. And from a social perspective how much power do these CEOs really have? There simply aren't that many of these guys in a country of 300 million. And it's not like we're in Latin America, and these guys are hogging all the arable land.

Maybe they're using their money to buy influence? Oh yeah? When Rick Wagoner (the GM CEO) goes up against the UAW, even in a Republican dominated congress, who do you think wins? (I will give you a broad hint: it is not the head of GM).

[CYKOFAN]

I don't want a socialist government, but a government that allows free enterprise but protects the large majority of citizens thru good legislation and good regulations that are actually enforced. And yes I'm sick of ceo's making 500 times what their workers make and all too often run up the stock price thru shady practices (or flat out lying) so they can cash in tens of millions in their stock options. Then when the truth comes out and the crap hits the fan they get canned with a golden parachute worth another 100 million. And you better check the recent headlines. GM continues to lay off thousands of workers, mostly due to managements own shortsightedness and greed. Bet GM wishes they hadn't destroyed those electric cars 6 years ago.