The stated ideology of the Bush era has been that the free markets should run unfettered. In light of the federal government’s intervention with Bear Stearns Cos. and its more recent intervention with Fannie Mae and Freddie Mac, it is clear that the actual ideology of our time is the privatization of profit and the socialization of loss, at least as far as massive financial institutions are concerned.
Fannie and Freddie are emblems of this ideology. Chartered decades ago by the federal government to create a national secondary mortgage market, Fannie and Freddie have used their special relationship with the government to grow stunningly large. Indeed, the two of them have roughly $5 trillion (that’s “trillion,” folks!) in mortgage-related obligations. That’s about equal to the amount of U.S. government debt held by the public.
