With all the fingers being pointed in the collapse of Fannie Mae and Freddie Mac, it is worthwhile to step back and really look at what happened.  I won’t delve into what details I do know, but I will direct you to this article.  It is an excellent rundown of the politics.

For my part, I will point out that Wall Street is really not so different from Las Vegas.  But now, with all the bailouts flying, it seems as long as you are connected, you can’t lose.  It’s a travesty.

It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.

Indeed.  We all know that in order to achieve success, we must take risks.  Inherent in risk is the chance of failure.  Investors weigh the risks against the potential gains and decide how much they can withstand.  Taxpayers made no such decision here.  We did not decide to loan money and insure investments that were doomed from the beginning.  We did not make the choice to take on this risk, and we certainly have not shared in the profits.

Socialism, whether imposed on the successful or used to prop up the failure, always leads to the same place.  Bailing out the gamblers is no different than the Robin Hood tax schemes.  If you are punished for success and rescued from bad judgment, there is no motivation to become successful or use good judgment.

By the way, read all the way to the end of the linked article.  This mess could have been prevented.