Corporate Welfare

Your Tax Money, Being Spent on Encouraging Lobbyists to Pressure Lawmakers to Support the Ideas Produced by Your Tax Money, etc.


So, in the Bailout's latest thought balloon, the Treasury Department is preparing to buy up scores of billions of mortgage-backed securities from the government-owned Fannie Mae and Freddie Mac, on the condition that (in the Washington Post's words) "mortgage lenders would have to set exceptionally low interest rates, for instance, no more than 4.5 percent for traditional, 30-year fixed-rate loans." Treasury might pay for this credit-loosening exercise by selling a big new batch of 30-year bonds. While you try to wrap your head around that particular Mobius strip, here's a passage I found interesting:

A source said Treasury officials suggested at the meeting that the Realtors start a grass-roots campaign to press the mortgage rate plan with lawmakers.

Treasury officials described the situation as fluid and said the plan was still being finalized, according to people in contact with the department. The officials expressed concerns yesterday that premature disclosure of the plan could prompt Americans to put off buying homes and hold out for a better rate, sources added.

Lots to chew on just in that passage, let alone the whole article and the idea behind it.

Mike Flynn's anatomy of the financial breakdown here, and for those non-subscribers out there, you really ought to pick up the January issue of reason for a big package on the bailout, the role of regulation (both the "de" and "re" varieties), and suggestions for better government policies to address the the recession.