The author gets into the meat and potatoes of these two giant mortgage lenders failings and offers a four part plan that the tax payer needs to demand in return for our bailout. This would include new management and limiting the executive compensation.
Center for Economic and Policy Research: Statement on the Bailout of Fannie Mae and Freddie Mac
The collapse of the housing bubble, however, has created extraordinary circumstances where even prime mortgages are going bad at very high rates. As many mortgages in former bubble markets sink further underwater, Fannie and Freddie now own or guarantee mortgages on homes that will lose in the neighborhood of 50 percent of their value.
The failure of the economists and managers at these institutions to recognize the housing bubble earlier has proven enormously costly to the United States and the world economy. The conditions of any bailout should protect the public from further losses by holding management accountable for their irresponsibility, reining in executive pay and creating reasonable standards for future lending.
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