Housing failures

As Democrats patted themselves on the back last month for passing a "financial reform bill" -- in other words, imposing a vast new federal regulatory structure to monitor Wall Street -- their two prized creations to expand the housing market were again coming in for crash landings.

But never mind.

On Monday, government-controlled mortgage buyer Freddie Mac brought hat in hand to Congress asking for a $1.8 billion bailout. The entity lost $6 billion in the second quarter.

Meanwhile, last week Freddie Mac's "special" offspring, Fannie Mae, reported losses of $3.13 billion in the second quarter and is asking taxpayers for another $1.5 billion.

Recall that fewer than five years ago, Rep. Barney Frank, the Massachusetts Democrat who chairs the Financial Services Committee, was lauding the solvency of these two government enterprises, despite critics who noted they were taking on far too many dubious mortgages.

"These two entities--Fannie Mae and Freddie Mac--are not facing any kind of financial crisis," noted Rep. Frank, not to be mistaken with Jeanne Dixon. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

Fannie and Freddie are two entities born of Democratic social engineering. They buy up home mortgages from lenders and serve as vehicles for many members of Congress to "expand homeownership" by pressuring banks to offer credit to high-risk borrowers.

Problem is, the taxpayers are ultimately on the hook. The Associated Press calculates that -- including the latest losses -- taxpayers will have coughed up some $148.2 billion for these two entities to stay alive, about $63.1 billion of which is being used by Freddie Mac.

When the history of the 2008 financial meltdown is recorded, Fannie Mae and Freddie Mac -- operating at the behest of good liberals such as Rep. Frank -- will likely be front and center. Yet when Democrats cobble together a 2,000-page regulatory monstrosity to flex government's muscle over the evil financial private sector, they conveniently leave out these two quasi-public agencies at the middle of the tornado.

And the beat goes on.