Greenspan on the Fannie Mae and Freddie Mac Bailouts

Alan Greenspan weighed in on the massive government bailout:

His quarrel is with the approach the Bush administration sold to Congress. "They should have wiped out the shareholders, nationalized the institutions with legislation that they are to be reconstituted -- with necessary taxpayer support to make them financially viable -- as five or 10 individual privately held units," which the government would eventually auction off to private investors, he said.

Instead, Congress granted Treasury Secretary Henry Paulson temporary authority to use an unlimited amount of taxpayer money to lend to or invest in the companies.

In this case, there's not much difference between the parties. It's all about retaining the power to manipulate the credit markets for political gain. So long as the FMs remain at least quasi-government, the politicians can use them to dole out goodies in some fashion. Just look at the former Clinton and Bush officials who have high-ranking positions at both.