Update: It's official, we're on the hook for "tens of billions"
As I've mentioned before, as well as Herb Jackson, Representative Scott Garrett has been one of the most consistent critics of the government's backing of Fannie Mae and Freddie Mac. With the news that the government is planning on taking over the GSEs tomorrow, confirmed by Representative Barney Frank, it looks like Garrett will get to say the "I told you so" I'm sure he never wanted to say.
On the other hand, Frank has the problem of having to deal with the fact he stood on the House floor and said the legislation they passed back in July, making this bailout almost inevitable, probably wouldn't cost taxpayers a dime. Now it seems we'll be on the hook for at least $25 billion.
What I find most troubling is this decision is not based on all those reports telling us the companies had plenty of cash, but instead seems to be on all those hedgefund managers who would have lost millions if they couldn't short sell the stocks. Now we've got ourselves the largest bailout in American history.
And the greed goes on...