You were never seduced by the promise of one of those mortgages that let you borrow up to 100 percent of the income you planned to be making in five years.
It doesn't matter. With the bailout of Fannie and Freddie you and every taxpayer are proud owners of your very own piece of the subprime mortgage catastrophe.
Why? Simply put, because the government is using your money to invest in these two teetering behemoths that together hold, as the media never tires of telling us, around half of all U.S. mortgages.
The argument for the bailout makes sense. It must, to get Senators McCain and Obama to agree. But now that it's happening, and my money is being used to fund it, I want my part of these two quasi-public entities that have always had the implicit guarantee of the federal government.
And you should have your part, too.
So my idea is for the government to open an account in the name of every taxpayer, and allocate half of all outstanding Fannie and Freddie shares based on how much tax you've paid, on average, over the last five years. The other half can stay with the current shareholders.
That seems fair and reasonable, since without your generous capital infusion, they'd be sitting on some pretty useless paper. And given that their shareholders benefited for years and years from the weird hybrid status that Fannie and Freddie had, and from the privileges that millions of lobbying dollars secured for them. (Over the last decade, Freddie alone paid $94.8 million for lobbying services).
Think of what I am proposing as your personal bailout account. The stock is pretty much worthless now, but worthless or not, it's mine and yours. If the housing market turns around, the value of your account will rise. We've all seen bankrupt companies go through a workout and end up stable and profitable.
What's more, these accounts are perfect little repositories should the government need to jump in and throw a life preserver filled with your cash to anyone else. There's a lot of talk that Detroit is going to need a bailout (another area where both Senator Obama and Senator McCain are in rare unanimity.)
If that should happen, simply follow my model and put half those shares into the Personal Bailout Account system.
Yeah, I know the arguments against this idea before they're even made. I know that my "ownership" in the government's stake is implicit in my citizenship. But if I'm going to contribute to saving someone from their stupidity and greed, if my cash is going to be exchanged for stock, I want to be able to look at that equity every single day. And I want the people who are running this new "conservatorship" to know that we're all looking at it every single day.
Hey, with that kind of attention to the granular, as opposed to the mush-it-all-together economics that sustained the subprime fantasy madness, we might never have had this problem in the first place.