The Takeover

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"The Takeover"

Yesterday, John Quiggin was speculating about the potential for a nationalization of Fannie Mae and Freddie Mac. With today’s news that bailout packages of various kinds are under consideration, it seems to me that this option should be up for discussion. As Quiggin argues, these things need to be on the table at some level when you’re talking about institutions that are “too big to fail.”

As he says: “The shareholders of these companies have been happy to accept the higher returns associated with an implicit government guarantee and they should pay the price when the guarantee is needed.”

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