Bailout Cost

Last week I was annoyed by this NYT article which attempts to minimize the cost of bailing out the banks. The article is annoying because the accounting is misleading, as the article itself later acknowledges some important costs are being ignored. For example Fannie Mae and Freddie Mac, the government mortgage companies, have been making lots of lousy loans in order to prop up the housing market. This is an indirect means of bailing out the banks and the resulting loan losses should be included in the bailout cost. Similarly for things like the home buyer tax credit. There is no reason for the NYT to be parroting administration propaganda about how little this fiasco is going to cost the taxpayers.