government bailout

I want to wave my wand and put impeccable Suze Orman in the film ‘Trading Places’

It was Kenny Rogers who sang, “You have to know when to hold’em, know when to fold’em.” Last week, I described some of John McCain’s moves throughout his career as those of a gambler. The choice of Sarah Palin ranks as one of those audacious and risky moves—and it has paid off to the extent that McCain has successfully re-energized the Republican base. The Palin effect may be subsiding but, without her, McCain would likely have been in a more difficult position. We saw the gambler’s instinct emerging again yesterday when he suspended his campaign and requested a postponement of the first candidates’ debate. The gambler is normally one who calculates his risks and acts in a strategic manner to increase his gain and reduce his losses. Instinct is important to the gambler, but knowledge of the game is absolutely essential. Is McCain really gambling in this case, or is he just being tactical, impulsive, and, to some degree, desperate?

Okay, hear me out. I understand that if the U.S. government hadn’t stepped in and taken over Fannie Mae and Freddie Mac (I still can’t get over those names), then the mortgage giants would have exploded. Given that they back about half of America’s $12-trillion or so in home mortgages, that would be a very bad thing. But here’s the thing: By stepping in a bailing Fannie and Freddie out, the government didn’t solve the problem, they just diluted it.