GOP senator on mortgage bailout: ‘Socialism is alive and well in America’

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Republican Sen. Jim Bunning of Kentucky today slammed the Bush administration’s proposal to bail out Fannie Mae and Freddie Mac, declaring, ‘socialism is alive and well in America.’

‘When I picked up my newspaper yesterday, I thought I woke up in France,’ Bunning said in a statement today. ‘But no, it turns out socialism is alive and well in America. The Treasury secretary is asking for a blank check to buy as much Fannie and Freddie debt or equity as he wants. The Fed’s purchase of Bear Stearns’ assets was amateur socialism compared to this.’

In a news conference this morning, President Bush (pictured) defended the rescue plan for Fannie and Freddie, saying, ‘I don’t think it’s a bailout.’

‘If your question is, should the government bail out private enterprise, the answer is, no, it shouldn’t,’ Bush said. ‘And by the way, the decisions on Fannie Mae and Freddie Mac -- I hear some say ‘bailout’ -- I don’t think it’s a bailout. The shareholders still own the company. That’s why I said we want this to continue to be a shareholder-owned company.’

Relatedly: The Securities and Exchange Commission is taking emergency action to protect Fannie and Freddie in the stock market. Bloomberg News: ‘The U.S. Securities and Exchange Commission will take emergency action today to the limit the ability of traders to bet on a decline in the shares of Freddie Mac, Fannie Mae and brokerages, the agency’s chairman said.’

Analysis: Under the president’s proposal, the government could become a shareholder of Fannie and Freddie. That’s not what most Americans mean when they talk about a ‘shareholder-owned company.’ The government is taking extraordinary and unprecedented steps to protect and support Fannie Mae and Freddie Mac.

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