Fannie and Freddie: no more corporate bailouts!

Fannie Mae and Freddie Mac, Goliaths that control almost half of the 12 trillion dollar U.S. mortgage market, totter on the brink of ruin. And it is clear that the government will go to any length to keep the two afloat.
Fannie Mae was created in 1938 as a government agency to make affordable mortgages available by lending money to banks, which had effectively gone broke during the Great Depression. Lyndon B. Johnson privatized Fannie Mae in 1968 to camouflage the disastrous effect of the Vietnam War on the federal budget. Freddie Mac was established in 1970 to foster the illusion of competition.
Today, instead of one public agency, there are two private “government-sponsored enterprises,” or GSEs, both of them exempt from state and local income taxes and oversight by the Securities and Exchange Commission. For decades the stockholders got rich off pyramid-scheme loan practices — until the house of cards came crashing down.
The corporate bailout of Fannie and Freddie will be fueled by cash from overseas investors and through U.S. government printing of greenbacks for loans. But workers end up footing the bill — through rising inflation, higher taxes, work speedups and plummeting wages.
How about a sane solution? Why not nationalize all the banks and lenders, under workers’ control? Let’s see some public accountability and eliminate million-dollar salaries!
That would be progress. But this debacle, coming on top of all the others, shows all too clearly that capitalism is just one big crazy pyramid scheme. It’s ripe for toppling!