Here are a couple of paragraphs from The New York Times that oughta raise your eyebrows well off your face…
It could become one of the most expensive financial bailouts in American history, though it will not involve any immediate taxpayer loans or investments.
The Treasury secretary, Henry M. Paulson Jr., who engineered the plan, would not say how much capital the government might eventually have to provide, or what the ultimate cost to taxpayers might be. Two months ago, the Congressional Budget Office gave a rough estimate of $25 billion. One senior government official, speaking on the condition of anonymity, signaled on Sunday that even that figure was optimistic.
Mr. Paulson said Sunday that it was important to rescue the mortgage giants because a failure of either company would cause turmoil in financial markets in the United States and around the world.
This is one of the things that's wrong with our economy and it's been wrong for some time, even before the Bush administration ramped it up to disaster levels: If you or I make stupid business decisions, we suffer the consequences. But if big companies make stupid business decisions, the government steps in and bails them out with our money. And the CEOs and execs who made those decisions get to keep their six-figure salaries.
Many years ago, I attended a lecture by a man named Akio Morita, who may well have been the smartest person to ever be in the same room as me. (He was the co-founder of Sony.) He said — this is not an exact quote but it's close — "The thing that will eventually doom much of American business is that your executives pay no price for failure. You can become CEO of a corporation, do everything wrong, drive your company into the ground and then retire and buy several mansions with the money they will pay you for doing this."
Government bailouts are an even more pernicious form of this. We can't let those institutions fail…and the people who run them know it. Maybe we need to give those deregulation ideas another think, especially in cases where we have to cough up billions when companies are mismanaged.