[1]by NW Spotlight
The Obama Treasury’s expropriation of mortgage behemoths Fannie Mae and Freddie Mac [2] is complete, and it is a highly profitable enterprise for the coffers of big government.
According to a Reuters report [3], the Obama Administration is projecting that it will make $180 billion over the next 10 years in profits. The taxpayers bailed out these institutions during the financial crisis to the tune of $187.5 billion, but they’ve already paid back over $200 billion to the government. So, in terms of the taxpayer bailout, it’s been fully paid back. What is the next $180 billion going to fund? More government, of course.
This is particularly offensive because some private investors were lured into Fannie and Freddie with misinformation from these same government officials. Then, the government wiped out their share values by declaring that 100% of the profits would go to “taxpayers.” Which begs two questions:
(1) How many of you out there think the government is going to return Fannie and Freddie profits to taxpayers? Are taxpayers going to get a dividend check? If by “taxpayers” they mean federal bureaucrats and crony capitalists (a new revenue stream for Solyndra!), then we might agree.
(2) Why would a private investor willingly invest in something they knew would return zero dividends? Answer: They wouldn’t. Which is why this “bait and switch” on investors is news.
Sen. Pat Toomey thinks something smells here too [4]. Look for the government defenders of this money grab to position the conflict as one between “hedge funds and the taxpayers.” But, the taxpayers were paid back in full for the bailout. This is now about government taking investor shares to protect its golden goose.