A main enabler of mortgage lending excesses now needs you to front it some cash.

Blawgletter just read a NYT article about the feds’ plan for avoiding a bailout of mortgage lending giants Freddie Mac and Fannie Mae.  The plan?  To bail them out.

The government seems to think that obtaining authority to rescue these private institutions will stave off the necessity of actually tossing them a life preserver full of taxpayer billions.  Right.

We enjoy irony every bit as much as the next whiner, but the spectacle of financial wizards taking on super powers to save lenders from their horrifically dumb decisions strikes us as sublimely delicious.  Don’t these same people hector us about the moral hazard of guaranteeing outcomes — at least when the beneficiaries chiefly include the working poor?  And don’t they also denounce govment regulation as the evil distorter of free market forces?

Too big to fail doesn’t move us.  Let ’em crash and burn, we say.  Take ’em over and run ’em as actual government agencies instead of pretend ones.  The pain will come sudden and sharp.  But at least it’ll force the wizards to deal honestly with problems they helped create and hasten effective oversight of our feckless, reckless, and amoral financial markets.