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Olbermann and Obama on Freddie Mac/Fannie Mae

An instant classic.  We have: 1.  Olbermann overestimating the cost of the bailout to the American taxpayer by about $4.8 trillion; 2. Obama going after the high salaries of Freddie and Fannie executives without mentioning his veep-vetter was highly paid Fannie executive Jim Johnson; 3. Obama talking about how this is a Republican and Democratic problem without mentioning how the top recipients of lobbying cash from the industry are Democrats.

That’s what happens when you submit to puff-ball interviews on MSDNC.  Here’s the excerpt:

OLBERMANN:  And there are extraordinarily large developments in terms of that economy.  Especially in the last couple of days, especially about Fannie Mae and Freddie Mac.  They were created as a kind of gentle encouragement by government to more home ownership, to make it more possible.

There is nothing gentle about it, it is now fully taxpayer funded subsidization of home interest rates and home ownership.  Should this be the way it is?  Is this a permanent solution or did we just add $5 trillion to the national debt?  What do we do now about this?

OBAMA:  Well, I don’t think it’s going to be $5 trillion.  That’s the amount of debt that Fannie Mae and Freddie Mac are holding.  But a lot of those are good mortgages.  People are paying them.  We are going to see some losses.  Taxpayers are going to take a hit.  How big it is, we don’t yet know.

And I have to be fair on this one.  Republicans and Democrats I think in Congress did not pay enough attention to the structural problem with Fannie Mae and Freddie Mac which was, they are quasi public, quasi private institutions.  They are making big profits and their CEOs are taking in big bonuses when times are good.  But there is this implicit federal guarantee when times are bad.

And that was a structural problem that needs to be fixed.

But the problem of not regulating the financial markets effectively generally, not seeing that the subprime mortgage crisis was leading to a mess, not updating some of our financial regulations since the 1930s, that’s been, I think, an example of the neglect on the part of the Bush administration over the last eight years whose view is basically anything goes and the government just has to stay out of the way.  That has ironically hurt the market and one of the things we have got to rediscover is a little bit of well-applied regulation and transparency and accountability actually helps the market, helps the economy grow.  And that’s what I want to restore when I’m president.

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