In the International Herald Tribune, Nelson Schwartz headlines "Mortgage crisis has Washington putting aside free-market ideology".
Now, with the U.S. government preparing to save Fannie and Freddie only
six months after the Federal Reserve Board orchestrated the rescue of
Bear Stearns, it appears that the mortgage crisis has forced the
government to once again shove ideology aside and get into the
bailout business.
Bailing out a Federal Bureau is in violation of free-market ideology? This is the quirky thesis of his entire piece, which he himself quietly undercuts by admitting toward the end
Bert Ely makes a distinction between the rescue of Fannie and Freddie and the
thrifts versus the aid packages for Chrysler and other industrial
companies. "They didn't have a federal nexus," he said. "They weren't
creatures of the federal government."
Damn straight. Fannie Mae was founded as a government agency in 1938 as part of Franklin Delano Roosevelt's New Deal...The Emergency Home Finance Act of 1970 created Freddie Mac.
This debacle is a clear failure of government, not of the free market. But when freedom is to be scapegoated, editors abandon standards and rubberstamp garbage like this.
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