Gosh, I thought the political coalition that supports inefficient light rail systems was formidable. But that coalition can’t hold a candle to the one that the W$J’s Paul Gigot says (non-gated version here) protected the dubious quasi-public structure of Freddie Mac and Fannie Mae:

The abiding lesson here is what happens when you combine private profit with government power. You create political monsters that are protected both by journalists on the left and pseudo-capitalists on Wall Street, by liberal Democrats and country-club Republicans. Even now, after all of their dishonesty and failure, Fannie and Freddie could emerge from this taxpayer rescue more powerful than ever. Campaigning to spare taxpayers from that result would represent genuine "change," not that either presidential candidate seems interested.

Meanwhile, Cato’s Gerald O’Donnell points out that the proposed bailout represents "casino capitalism" for taxpayers:

Treasury Secretary Henry Paulson’s bailout plan for mortgage giants Fannie Mae and Freddie Mac .  .  .  prompted Sen. Jim Bunning (R-Ky.) to remark that he thought he’d woken up in France. Yes, socialism is alive and well in America – thanks to a Republican Treasury secretary.

Absent from Paulson’s plan is any protection for taxpayers. They’ll fund the downside if losses mount at the two mortgage giants. But if Fannie and Freddie recover, stockholders and management gain. Call it "casino capitalism" – taxpayers bankrolling management high rollers.

The plan doesn’t ask stockholders or management to suffer for their financial indiscretions. The players who put their companies in jeopardy get to stay in charge – Paulson says he isn’t looking for "scapegoats." Someone should remind him that capitalism without failure is like religion without sin.