A NEW LIFE FOR FANNIE AND FREDDIE
By "federalizing" Fannie Mae and Freddie Mac, Treasury Secretary Henry Paulson wants to prop up the two mortgage giants -- albeit at great expense to taxpayers -- so the world keeps buying their mortgaged-backed securities (MBSs).

However, the biggest risk is that the companies could still emerge with their business model intact. That model is the perverse mix of private profit and public risk, which gave them an incentive to make irresponsible mortgage bets in the first place...

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Politicians Did This
THE Democrats will blame the Republicans. And the Republi cans will blame the Democrats. And this time, they will both be right. Each of the political parties shares responsibility for the troubles at Fannie Mae and Freddie Mac, two government-sponsored organizations that needed to be bailed out this weekend by - who else? - the taxpayers.
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