Democrats in Congress had great fun using Fannie and Freddie as public policy piggy banks, rewarding constituencies, funding pet projects, forcing the private sector to dance to their tune. What’s to stop them from renegotiating this week’s deal after the election and using Bank of America, Wells Fargo, JPMorgan Chase and the others as Fannie Mae 2.0?
Please don’t say that the terms of the deal are set and the government can’t revise them. If there’s one thing the last month has hammered home, it’s that nothing is written in stone. Besides, the banks may grow to like the security of partial nationalization and even lobby to Congress to stay on as less-than-fully-silent partners.
Heck, that way they wouldn’t have to pay back the loans.
Barack Obama already has a strong record of sympathy for “public-private partnerships” and other schemes that put government in the driver’s seat. ACORN, the militant wing of the Democratic Party, has been trying to shake down banks for years, and Obama is on record as saying it and similar groups will have a major role in helping him craft policy. And it’s hardly reassuring that Barney Frank, Chris Dodd and Nancy Pelosi will be running Congress. It doesn’t seem crazy to suspect that a crowd that sees nationalization of health care as a vital public policy goal will not be dogmatically adverse to the nationalization of the credit markets.
John McCain is better about such things, but not by much. An avowed disciple of Teddy Roosevelt, McCain has a record of whipping the private sector — even Major League Baseball! — to do his bidding.
Teddy Roosevelt himself revised his faith in “trust-busting,” preferring instead to let big business grow bigger so long as it agreed to follow the orders of even bigger government.
In Wednesday’s night’s third presidential debate, CBS’s Bob Schieffer missed a vital opportunity to ask both candidates whether they would pledge not only to abide by the bailout’s sunset provisions but to further promise to get the government out of Wall Street as quickly as possible. Such pledges wouldn’t be legally binding, but they would help create political pressure from the right direction.
That didn’t happen. So now we’ll just have to trust that the politicians and Wall Street won’t mess things up. Anyone feeling good about that?