Fannie Mae and Freddie Mac’s stock price has been inflated for a long time on the expectation that if they fall down, Uncle Sugar will swoop in and pick them up.

Fannie Mae and Freddie Mac have been able to get away with buying/guaranteeing riskier than usual mortgages for a long time on the same internal perception — “the usual rules don’t apply to us, because we have effectively unlimited credit. If we scream, Washington will answer.”

You think letting them go down the drain they’ve been swirling around is a radical position? Brother, you ain’t SEEN radical.

Radical would be declaring all mortgages held by the two to be fulfilled, all guarantees of mortgages made by the two null and void, selling off any remaining physical assets, distributing that revenue pro rata to FM/FM guaranteed mortgage holders as partial catch-up payments for those loans in default, and then terminating the FM/FM charters and making their stock certificates into frameable collectibles rather than tradeable securities.

Why?

What do you people think will happen if Fannie and Freddie fail? Will everyone who has a mortgage through them be thrown out on the street?

No.

They won’t face any additional hardships whatsoever.

This is a bailout for INVESTORS who chose to invest in horrible companies with the thought that the government would bail them out.

See the $6 billion swing on the Fed’s comments last Friday. SIX BILLION DOLLARS changed hands because of a few words from Bernanke.

The government causes most if not all problems. Should it also bail out GM? I can make a solid case that GM’s problems are largely caused by the government — at least as much as those of Freddie and Fannie.

“‘let them fail’ and follow up with how the market process facilitates market participants to pick up the pieces and find the best solutions”

because he is no Ron Paul . . . he has so little understanding of free market economics, that he is ill equipped to answer this way.

Did Harry Browne have this problem . . . did Michael Badnarik even, have this problem? No they didn’t.

And here’s another important piece of information . . . Mary Ruwart, nor Steve Kubby has this problem either. Why? Because full fledged, long-time libertarians understand the vital importance of the free market economic principles, and how they are integrated with Libertarian solutions. Barr, being a run-of-the-mill conservative is clueless.

Just saying “let them fail” to the media may feel good and sound good, but that will essentially shut the door to our candidates who say that.

Again, from Trosper’s perspective, the focus is on votes, and not principle. True, saying “let them fail” ought to be followed up with how the market process facilitates market participants to pick up the pieces and find the best solutions, but by proposing “restructuring” and “doing something”, Barr is proposing a statist solution, and libertarians ought to “shut the door” on that!

BARR: But the ultimate goal, I think, has to be a very firm commitment to restructure Fannie Mae and Freddie Mac.

and we see that Barr is either afraid of alienating his conservative base, or he isn’t a libertarian, because he isn’t saying eliminate Fannie Mae or Freddie Mac.

Either way, Barr’s statements are totally indefensible from a libertarian perspective, regardless of what the phony libertarian Gene Trosper says.

BTW Trosper, though you may not agree with everything Barr says, a real libertarian would agree with half or less of what Barr says (now), and about 20% of what Barr had done in the congress.

Sure. Seems to me I heard people saying the same thing about Iraq.

When will we learn that the entity which crewed something up is exactly the WRONG agency to turn to for a remedy?

Basic logic.

Don’t you think you can “educate” voters better if you get on TV and actually register in the polls?

D’oh. Regretting my donation to Barr doubly now, what with the Helms comments and now this.

The right fix is:

- let them fail. failure can be good.
- abolish the fed
- remove all obstacles to alternate currencies
- let all these idiot companies that are underwater fail
- much more…

http://www.236.com/news/2008/07/11/faq_fannie_mae_and_freddie_mac_7677.php

We won’t win the election anyway, so we may as well make good use of the public forum an election brings, by educating the public.

Ruwart or Kubby would have educated the public about the mortgage crisis. Maybe changed a few minds, and thus made us an incrementally more libertarian country in the process.

But the “vote getters” are impatient with education. They’d rather promote Republican Lite candidates that won’t “scare voters.”

Barr/Root is a wasted opportunity. We can either run Radicals who won’t win but will teach. Or Reformers who won’t will and won’t teach. The LP chose the latter.

Not the first time. Probably won’t be the last.

“Markets” are never “free”. All societies regulate the economy; like the US gives them barrels of welfare, tax breaks that shift wealth from working people to the multinationals, etc.

There is always social regulation of the economy; the real question is who is doing the regulating. In the US the multinationals, and their lobbyists, oversee their own regulation via purchase of elected representatives that draft tax and regulatory law.

I of course favor re-nationalization of home mortgages under a restructured federal home loan agency, returning home ownership to direct federal stabilization and control.

No more speculation on housing. I think it creates social instability and siphons wealth from middle and working class people up into the coffers of the multinationals.

–
http://www.bobbarr2008.com/press/press-releases/56/bob-barr-says-privatize-fannie-mae-and-freddie-mac-end-government-subsidies/

excerpts – The latest financial crisis involving Fannie Mae and Freddie Mac, which guarantee home mortgages, demonstrates yet again how government intervention in private markets almost always comes to grief. Both Fannie Mae and Freddie Mac are nominally private, but were created by Congress and enjoy significant advantages over truly private companies, including cheaper borrowing, lower capital requirements, and an implicit federal guarantee.

As a result, the two organizations behaved irresponsibly…

In the short-term, government has little choice but to provide an explicit but limited loan guarantee, thereby capping the public’s liability, now widely assumed to be without limit. At the same time, Congress must restrict the number and size of loans by Fannie Mae and Freddie Mac and set more substantial capital requirements, …

American taxpayers cannot afford additional special interest subsidies and bail-outs.
…

The largely unaccountable Federal Reserve has made many of these problems worse, by extending further bail-outs and creating additional taxpayer liabilities. Congress must limit the Fed’s activities as well, and force it to act with greater transparency and oversight.

Just saying “let them fail” to the media may feel good and sound good, but that will essentially shut the door to our candidates who say that.

Whether one considers themselves a “radical” libertarian, a “mainstream” libertarian or one of those “constitutionalist” libertarians, the fact is that in general, voters cast their ballots largely on quality of life issues. This is certainly a quality of life issue.