Bailout Watch 6: Freddy, Fannie and Detroit

Edward Niedermeyer
by Edward Niedermeyer
bailout watch 6 freddy fannie and detroit

In his most recent GM Deathwatch, RF raised the specter of "Bailout Fatigue." The Detroit News' Gordon Trowbridge agrees. Their man in Washington says to the government's preference for financial sector bailouts like Bear Stearns, Fannie Mae, Freddie Mac and Indy Mac will queer the pitch for Motown. Rep. John Dingell cries foul! "If Freddie Mac and Fannie Mae ask for a bailout and they get it, [automakers] should be able to ask and get it, too," says the Dearborn democrat. Former Michigan governor James Blanchard agrees: "government seems to treat financial services with special care, and not care about manufacturing until the last minute." President Bush begs to differ: "If your question is, should the government bail out private enterprise, the answer is, no, it shouldn't." According to the Chief Excutive, the Fannie/Freddy "rescue" isn't a bailout because "the shareholders still own the company." And now a word from someone without a horse in the race. "Fannie Mae and Freddie Mac are fundamentally sound businesses," says University of Maryland economist Peter Morici, implying of course that the D3 aren't. Besides, Fanny and Freddy hold 91 percent of America's mortgage debt on houses under $470k, while Detroit only employs about as many workers as Chrysler did when it was bailed out in 1979.

Join the conversation
4 of 23 comments
  • Ihatetrees Ihatetrees on Jul 17, 2008
    Robstar: Prices still need to come down significantly. What is the point of me saving my $ smartly & then getting them taken from me to bail out irresponsible people? Responsible voters (like you) are outnumbered by irresponsible voters. And it looks like it's going to get worse before it gets better.

  • Jerome10 Jerome10 on Jul 17, 2008

    I agree. I save. I live smart. I have no debt besides a few grand of student loans. I contribute to retirement funds. Meanwhile this credit addicted population ends up screwing themselves so royally the whole economy tanks. I can do what I can to protect myself and save for myself, but I'm no match for the US economy. So their idiotic actions now affect ME, despite me being smart. I agree completely.

  • Obbop Obbop on Jul 18, 2008

    Corporate BIG-wigs, who often earn more in a few months than many Americans earn in a LIFE-time of labor (my working-poor roots are likely revealed in this post) need to pay for their mis-deeds. In a perverted sorta' way, I hope Obama or one of his ilk (ilks, elks?) fill the federal government and descend upon the small minority who have economically benefitted so very much the past couple decades and more while my socio-economic class has lost economic ground, been spat upon, forced to directly economically compete for jobs and housing with millions of the "undocumented ones," steadily smashed down into a 2nd-world level economic quagnmire....... descend upon those BIG money makers and tax them at a 90 percent or higher rate with NO loopholes to hide within. Let the upper-crust suffer along with those of us at the bottom. Heck, the CEOs can live a life of luxury on one year's salary!!!! And, their free health insurance for life while my class, the ones harvesting the food that allows all to specialize in their highly-paid fields, get no overtime pay until AFTER 60 hours of labor is exceeded per week; and those workers include 10 year olds up to old folks in their 70s, sweltering in the 100 degree heat, and are offered NO benefits. Bah!!!!!!!!!!!!!!!!!!!!! Let the "mighty" fall... and may those who have prospered so greatly suffer as so many other hard-working non-priveleged Americans have. /class envy or class reality? //come work in the fields for awhile then chime in ///like your grocery store shelves full, don't you? Thank the members of the working-poor class if you do

  • Hltguy Hltguy on Jul 18, 2008

    So, who bails out the USA when it goes bankrupt? The US is headed for a financial meltdown, way too many factors going against us. Did I mention the hordes of baby boomers headed into an already overburdended social security and MediCare system? The U.S. has already, and continues to sell its soul to the China's Europe's, Russia's and Middle Easter countries. IMO, it is not a matter of if, just when.