Robert G. Wilmers correctly states that Congress has yet to reform the two most infamous players in the 2008 credit crisis, Fannie and Freddie Mac ("What About Fan and Fred Reform?," Opinion, May 3). While this is an excellent question, Wilmers does not note the larger pattern. Every business has reformed itself since 2008, with an eye on the prize: Government money.
With the promise of apparently-endless bail-out dollars, Fannie and Freddie have no incentive to reorganize. Though their revenues have long lingered in the red, taxpayer funds have buoyed these flailing giants to resemble successful companies.
Bail-out opponents have argued since the very first bail-out that government subsidies for failing business practices will only promote further failing practices. Forget Fannie and Freddie; why should General Motors focus on building better cars, when they have learned that their resources are far better invested in lobbying Congress for more cash?
Wilmer points to the American Dream of homeownership as Congress’s justification for bailing out these mortgage giants in the first place. But the Dream is not about homeownership alone.
Instead, the American Dream is the idea that we will reap what we sow in a just world, and investment today will return rewards tomorrow. The bail-outs undermined the Dream by teaching us that reward comes not from worthwhile investment, but rather from kissing the right ass.
As long as the government rewards bad behavior, companies will invest in bad behavior. Until government demands real return, we can expect no reform.