The $350 billion bailout

It doesn't get as much attention as it should, but the biggest federal bailout recipient in recent years wasn't a car company or a bank or any other private-sector institution.

It was government-run mortgage giants Fannie Mae and Freddie Mac.

So far, American taxpayers have shelled out more than $150 billion to rescue Fannie and Freddie. But the real spending on the Fannie and Freddie bailout has only just begun.

It is expected that the institutions will get up to $200 billion more from taxpayers over the next two or three years -- bringing their total bailout potentially to $350 billion!

That isn't to say that other bailouts, such as those of car manufacturers or banks, were wise or even constitutional. They weren't. Government bailouts keep badly performing companies from facing the consequences of their actions, instead putting the burden of their failure on taxpayers who had no say in how the companies were run. That only encourages more bad performance.

But it is interesting nonetheless that the largest recipients of government bailouts were not private companies but government entities Fannie Mae and Freddie Mac.

And it is appalling that Fannie and Freddie now have been caught engaging in apparently frivolous spending at a convention.

The inspector general of the Federal Housing Finance Agency reviewed the mortgage giants' spending -- totaling $600,000 -- at an October banking convention at a pricey hotel in Chicago. About 90 Fannie and Freddie employees attended.

The watchdog determined that half of the spending was "of questionable value." It included things such as expensive business meals and so-called platinum- or gold-level "sponsorships."

Do you feel encouraged -- or troubled -- about the fact that government entities that already have received so many of your tax dollars now are squandering money on expensive conferences and the like?

Doesn't that suggest that the bailouts didn't lead the mortgage giants to alter their failed practices and behavior?

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