Their names are Paulson and Bernake.From our "The Free Market Works...Every time" Department:
Fannie Mae and Freddie Mac are private financial companies created by acts of Congress to smooth out the home mortgage process. Banks loan money to people to buy their homes and sell the mortgages to Fannie and Freddie, who then hold the loan, collect the payments and the interest. They can keep the mortgages or bundle them together and sell them like bonds to people who have money.
That would be RICH people. Everybody was doing OK until all the financial people got greedy and started approving loans for more than people could really afford to pay and to people who really couldn't afford to pay if any of life's normal hiccups happened to them. They did this a lot.
Rich people and their financial parasites saw this as a good chance to make more money. They kept doing it. More and more risky home loans were made. People were encouraged to buy bigger houses than they could afford. This was happening all through the American economy in many areas besides housing, as bean counters looked at the current fiscal year and squeezed blood out of what ever entity they ran. Lots of blood. Cut costs, send the jobs out of the country, and increase profits. Simple, right?
In the last century there was a mean and nasty but brilliant and driven man called Henry Ford. He was a ruthless business man who made cars in his factory that was designed around mass production. His cars were cheaper than any boy else's cars but not cheap enough that the good people of the middle class..(think You and me)...The common people still did not have enough money to buy Henry's cars. This was a dilemma.
Henry had already cut his manufacturing costs through innovation and sound management, but it wasn't enough. All the rich people already had cars. The problem, Henry realized, is that the "Little people" didn't have enough money to buy cars. "What's the matter with them?" thought Henry. The middle class worker just isn't pulling his weight in this consumer economy. They aren't spending enough money.
Henry gave this some thought and came around to the radical concept that the reason the middle class wasn't spending enough money and buying his cars was that they did not have enough money to spend.
And why not? Henry Ford, one of the most conservative men in the United States of America, realized that conservative ideology was incredibly short sighted and would ultimately fail, taking his country down with it, if left unchecked. He raised the pay for his workers just enough so that if they were careful and frugal, the men who worked at Ford Motor Company could save enough to actually afford to own a Ford.
Henry Ford got filthy rich by being less greedy and his country got stronger. The exact reverse of this little morality play is what has happened in America's financial industry.
Rather than getting less greedy, they got greedy...ER!
Pigs get fat...Hogs get slaughtered.
Unless you have a corrupt federal government that will step in and pay you for all your stupid greedy short sighted mistakes:
Rich people, corporations, and foreign governments, are the folks who would lose Trillions of dollars is Fannie and Freddie go into bancruptcy. Having already doubled the National debt by borrowing more money than all 42 presidents that came before him, George W. Bush and his Republican buddies look like they will double it again, in one form or another, trying to keep Rich people, Corporations, and FOREIGN GOVERNMENTS from losing a lot of money.
Nothing in anything Republicans have proposed, by the way, does one single thing to help the people who actually live in the homes they can't afford keep living in the homes they can't afford.
Henry (the Pig) Ford is probably rolling around in his grave thinking, "God , they're stupid."
Peace,
Steve
WASHINGTON
— Alarmed by the growing financial stress at the nation’s two largest mortgage finance companies, senior Bush administration officials are considering a plan to have the government take over one or both of the companies and place them in a conservatorship...
Fannie Mae and Freddie Mac are private financial companies created by acts of Congress to smooth out the home mortgage process. Banks loan money to people to buy their homes and sell the mortgages to Fannie and Freddie, who then hold the loan, collect the payments and the interest. They can keep the mortgages or bundle them together and sell them like bonds to people who have money.
That would be RICH people. Everybody was doing OK until all the financial people got greedy and started approving loans for more than people could really afford to pay and to people who really couldn't afford to pay if any of life's normal hiccups happened to them. They did this a lot.
Rich people and their financial parasites saw this as a good chance to make more money. They kept doing it. More and more risky home loans were made. People were encouraged to buy bigger houses than they could afford. This was happening all through the American economy in many areas besides housing, as bean counters looked at the current fiscal year and squeezed blood out of what ever entity they ran. Lots of blood. Cut costs, send the jobs out of the country, and increase profits. Simple, right?
In the last century there was a mean and nasty but brilliant and driven man called Henry Ford. He was a ruthless business man who made cars in his factory that was designed around mass production. His cars were cheaper than any boy else's cars but not cheap enough that the good people of the middle class..(think You and me)...The common people still did not have enough money to buy Henry's cars. This was a dilemma.
Henry had already cut his manufacturing costs through innovation and sound management, but it wasn't enough. All the rich people already had cars. The problem, Henry realized, is that the "Little people" didn't have enough money to buy cars. "What's the matter with them?" thought Henry. The middle class worker just isn't pulling his weight in this consumer economy. They aren't spending enough money.
Henry gave this some thought and came around to the radical concept that the reason the middle class wasn't spending enough money and buying his cars was that they did not have enough money to spend.
And why not? Henry Ford, one of the most conservative men in the United States of America, realized that conservative ideology was incredibly short sighted and would ultimately fail, taking his country down with it, if left unchecked. He raised the pay for his workers just enough so that if they were careful and frugal, the men who worked at Ford Motor Company could save enough to actually afford to own a Ford.
Henry Ford got filthy rich by being less greedy and his country got stronger. The exact reverse of this little morality play is what has happened in America's financial industry.
Rather than getting less greedy, they got greedy...ER!
Pigs get fat...Hogs get slaughtered.
Unless you have a corrupt federal government that will step in and pay you for all your stupid greedy short sighted mistakes:
The government officials said that the administration had also considered calling for legislation that would offer an explicit government guarantee on the $5 trillion of debt owned or guaranteed by the companies. But that is a far less attractive option, they said, because it would effectively double the size of the public debt.
Rich people, corporations, and foreign governments, are the folks who would lose Trillions of dollars is Fannie and Freddie go into bancruptcy. Having already doubled the National debt by borrowing more money than all 42 presidents that came before him, George W. Bush and his Republican buddies look like they will double it again, in one form or another, trying to keep Rich people, Corporations, and FOREIGN GOVERNMENTS from losing a lot of money.
Nothing in anything Republicans have proposed, by the way, does one single thing to help the people who actually live in the homes they can't afford keep living in the homes they can't afford.
Henry (the Pig) Ford is probably rolling around in his grave thinking, "God , they're stupid."
Peace,
Steve
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