Washington Post
By Binyamin Appelbaum
Tuesday, September 9, 2008
The government-chartered companies had relied on banks to raise money and that the government should have protected those investments. Ben Berry, chief executive of Gateway Financial, also noted that the ability of any bank to raise money by offering preferred shares was now compromised by the precedent that the government had established.
The class connection is that by reading the Federalist 10 and 51, I learned that they support the government being in control of the country. That they have the power, and that it is essential for a thriving community. In this situation Fannie Mae and Freddie Mac were created by the federal government to increase the supply and reduce the cost of mortgage loans. The companies used that to borrow money at a low cost the involvement of the government gave the banks a false sense of security. And when the stocks dropped the banks instantly lost a whole lot of money that the government would not really help out.
What I think is that we do need a government to help keep the country under control. But thats why the people with that position but make every sacrifice they can for the people and their happiness.
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