Heads they win, tails we lose

In past blogs, we have documented the ruthless reaction of rural electrical and telephone CO*OPs to Representative Jim Cooper's simple call for transparency. Joe Stiglitz (Nobel Laureate) asks for similar transparency at Fannie and Freddie as the US government is about to embark on another private-public partnership, in which the private sector takes the profits and the public sector bears the risk:

1. First, it should be fully transparent, with taxpayers knowing the risks they have assumed and how much has been given to the shareholders and bondholders being bailed out.
2. Second, there should be full accountability. Those who are responsible for the mistakes – management, shareholders and bondholders – should all bear the consequences. Taxpayers should not be asked to pony up a penny while shareholders are being protected.
3. Finally, taxpayers should be com­pensated for the risks they face. The greater the risks, the greater the compensation.

UPDATE: Senator McCain expresses similar views:

“Americans should be outraged at the latest sweetheart deal in Washington,” writes McCain. “Congress will put U.S. taxpayers on the hook for potentially hundreds of billions of dollars to bail out Fannie Mae and Freddie Mac. It’s a tribute to what these two institutions — which most Americans have never heard of — have bought with more than $170-million worth of lobbyists in the past decade.”