Comrades! The glorious revolution is upon us!
Last week, the U.S. government took the unprecedented step of effectively nationalizing mortgage giants Fannie Mae and Freddie Mac. Together, the two companies hold or guarantee some $5.2 trillion, or about half, of all American residential mortgages. A substantial portion of this debt is tilting toward default. Given the size of the numbers, American tax payers should be very concerned.
It was rightly felt in Washington that a collapse of either company would drag the whole mortgage market down with them, doing untold economic and political damage. The truth is sometimes unpalatable. To keep the wolves at bay, the government elected nationalization, the cornerstone of communism and socialism. The policy represents a major change for the American economy. Nationalization threatens the fundamental concept of free market capitalism upon which America rose to become the dominant financial powerhouse and economic engine of the world.</em>
Amazingly, this was written before we took over the largest insurance company in the nation.
