And the plan involves using regular hardworking taxpayers monies to bail out the rich with no questions asked or demands made of those miillionaires who avariciously mismanaged funds and/or those who invested greedily and unwisely.  What a wonderful bailout for the super wealthy. 

Deruglation, and no regulation have been the Bush regime's policies, with hands off its mortgage lending and Wall Street cronies making billions in profits to the detriment of those who were naive enough to believe this administration's tripe about homeownership.  It was a scam, fraud and crime against the American public by the greedy cabal of White House and Wall Street.

Government loans will save Fannie and Freddie and inevitably taxpayers' hardearned money will rescue the wealthy perpetrators.  What's wrong with that picture?

While Fannie and Freddie are being bailed out, economists are asking questions.

From Paul Krugman:  "Here’s the background: Fannie Mae — the Federal National Mortgage Association — was created in the 1930s to facilitate homeownership by buying mortgages from banks, freeing up cash that could be used to make new loans. Fannie and Freddie Mac, which does pretty much the same thing, now finance most of the home loans being made in America.

"The case against Fannie and Freddie begins with their peculiar status: although they’re private companies with stockholders and profits, they’re “government-sponsored enterprises” established by federal law, which means that they receive special privileges.

"...how did they end up in trouble?

"Part of the answer is the sheer scale of the housing bubble, and the size of the price declines taking place now that the bubble has burst. In Los Angeles, Miami and other places, anyone who borrowed to buy a house at the peak of the market probably has negative equity at this point, even if he or she originally put 20 percent down. The result is a rising rate of delinquency even on loans that meet Fannie-Freddie guidelines.

"Also, Fannie and Freddie, while tightly regulated in terms of their lending, haven’t been required to put up enough capital — that is, money raised by selling stock rather than borrowing. This means that even a small decline in the value of their assets can leave them underwater, owing more than they own.

"And yes, there is a real political scandal here: there have been repeated warnings that Fannie’s and Freddie’s thin capitalization posed risks to taxpayers, but the companies’ management bought off the political process, systematically hiring influential figures from both parties. While they were ugly, however, Fannie’s and Freddie’s political machinations didn’t play a significant role in causing our current problems."

Economist Dean Baker takes a different tack and hits the nail on the head.  "That's the word from the press reports. Apparently the government is going to hand Fannie and Freddie bucket loads of taxpayer dollars, no questions asked. The NYT reports that they will be given access to $300 billion of government loans at below market interest.

"That's nice. Shareholders who would have lost all their money if matters were left to the market, may instead walk away with billions of dollars. Similarly, the top executives of these companies, who earn salaries in the millions and tens of millions of dollars, will keep collecting their paychecks.

"We should all be thankful that the government intervened. After all really rich people and investment fund managers can't be expected to be able to handle their investments on their own. They need the helping hand of the government when they really screw up.

Similarly, we don't want the fate of highly paid executives to be left to market. If this happened, some might lose their vacation homes and private jets.

"We had to keep Fannie and Freddie in business, but we could have done this by putting conditions on the bailout. The government uses conditions all the time when it offers help to low and moderate income people. Unemployment insurance, TANF, food stamps, and even student loans come with all sorts of conditions.

"It is only when it comes to giving money to extremely rich people that we find it impossible to impose conditions. Again, we could have told Fannie and Freddie that no executives will get more than $2 million a year in total compensation. We could have told their shareholders that they are out of luck, because that is what is supposed to happen when you invest in a bankrupt company.

"Instead, we told the people who work as truck drivers, school teachers, and fire fighters that they will have to pay more in taxes to help some of the richest people in the country escape the consequences of their own stupidity. While kicking the poor is always fun for politicians, neither the Bush administration nor Congress are prepared to tell the very rich that they are on their own".

The Washington Independent reports this:  "The official spin from Washington today is that the government's rescue plan for Fannie Mae and Freddie Mac was aimed mostly at reassuring jittery financial markets, and that the two mortgage giants weren't actually likely to go under. Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee who is leading theeffort in Congress for a mortgage rescue plan, made just that point to Politico, saying "in the long run, markets are rational, but there are moments when they can be hysterical as well."

"But not everyone sees it in those terms. The government's moves may stabilize the markets, but there's more going on here to worry about, they say. Once again, just as it did with the bailoutof Bear Stearns, the feds stepped in with a rescue plan that doesn't require anything from the group being thrown a lifeline.

"Where, some economists wonder, are the conditions for Fannie and Freddie accepting possibly billions of dollars in investments and loans from the Treasury Dept. and the Federal Reserve? Shouldn't the two be required to submit to more oversight and regulation? If the largest buyers of U.S. home loans are now getting an additional boost from the government, can they still argue that the big paychecks for their CEOs - $12.2 million for Fannie Mae's Daniel Mudd and $13.3 million for Freddie Mac chief Richard Syron - are still solely the function of the private market? Perhaps most important, exactly how much is all this going to cost taxpayers?"