Oh Dear

Sen. Collins talks to WCSH on the bailout:

Senator Susan Collins...[agrees] that some sort of bailout in the wake of the "meltdown" on Wall Street is necessary.

"The SEC regulations that apply to publicly traded corporations should be extended to Freddie Mac and Fannie Mae," says Collins. "They are at the heart of this financial meltdown because they either own or back eighty percent of the mortgages in this country. In addition, they should be required to the same capital requirements that apply to commercial banks. We need more regulation of mortgage brokers."

This is flat-out, factually wrong. Is Collins completely misinformed about what's going on here?

Fannie Mae and Freddie Mac have already been bailed out--at a cost of about $25 billion. And at least so far, that action has been rather successful.

What's currently on the table is a new bailout, thirty times as large, for institutions that hold mortgage-backed securities.

As far as I know, those securities were neither packaged nor sold by Fannie Mae or Freddie Mac.

But say they were: The bottom line is, Freddie and Fannie have already been dealt with. It's all well and good to impose tighter restrictions on those entities going forward. But doing that does nothing to solve our current dilemma.

It does nothing to stem the crisis that's threatening the financial system and the economy right now.

So talking about Fannie and Freddie today is like walking up to the microphones on September 12, 2001 and vowing to step up efforts to catch the U.S.S Cole perpetrators. And then sitting back down.

Bottom line: The junior senator has still yet to voice an opinion that has any bearing on the difficult, dangerous circumstances in which we find ourselves.

But worse than that: Collins appears to be seriously out of her depth on this issue. She seems to have no idea what she's talking about. Either that or she's dodging a candid discussion under the guise of being misinformed.

Either way, it's a positively disastrous response to a grave situation.

Talk about a meltdown.