A Wall Street Journal editorial describes how a small minority of Senators exercised some sanity in dealing with the Fannie Mae-Freddie Mac problem. "Senator Jim DeMint has slowed the bill by requesting a commitment from his colleagues that sometime in the future, they would hold a vote on barring Fannie and Freddie from lobbying." And Sen. McCain made the following statement: "Receivership may indeed by the only option if a regulator can't get the far-flung activities of these two under control."
I summarized the situation to a friend by writing, "In a low-budget horror flick, the villain will be laughing diabolically and saying, 'I have created a monster!!' In this case, there are two of them, and they are textbook examples of how not to run a business. As subsidiaries of the federal government, it takes an act of Congress to effect any significant changes of policy to Fannie Mae and Freddie Mac, and they lack the flexibility to lay off people, trim expenses, close out unprofitable operations, and control risks that private enterprise would have. In this case, spending millions of dollars on lobbyists is not an exercise of the right to petition, but a conflict of interest. I agree that receivership is the only recourse left to cut their losses and salvage what is left."
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