Both the Bush and Obama administrations engaged in misguided interventions in the financial sector. In turn, they injected $465 billion in capital along with loan guarantees worth $285 billion and placed insurance on assets worth $418 billion.
It is comforting that part of the capital injections, about $175 billion, has been repaid.
Yet the worst offenders behind the mortgage bubble, Fannie Mae and Freddie Mac, will eventually get between $200 billion and $300 billion that is unlikely to be repaid to taxpayers.
Congress eliminated the cap on funds that can be granted to these financial basket-cases. While the sky is not the limit, at $1.5 trillion in exposure in their mortgage-guarantee and mortgage -securitization programs, it is damned close!
Fannie and Freddie operated with all the swashbuckling arrogance of hedge-fund buccaneers, including lavish salaries and bonuses for top managers. Yet they are being coddled by both sides of the aisle of Congress.
Despite their cute and cuddly nicknames, these evil cousins need to shuttered so taxpayers are not on the hook for an open-ended series of bailouts.