Here's a way to make sure it doesn't happen again: don't let it happen this time.
Get on the phone to your congresspeople NOW, and don't stop pestering them until they pass law barring the fed from nationalize the GSEs. Fannie and Freddie do have some ability to put back fraudulent securities, so let them do so and make the banks take their medicine.
We're already in a housing depression. Prices will to go back to normal (~3x incomes) regardless of who we bail out. Nationalizing this crap is another misstep that will lead to a long and painful depression, partly because the borrowing costs for the US government have the potential to go through the roof. The government and taxpayers need to save themselves right now, or things could (will?) get much worse.
If the government protects itself and keeps it's own borrowing costs low, then there is a framework to supply new banks with credit. If not, well...
The amount of desire for market reforms is inversely proportional to how well the public's portfolio is doing.
Noone wanted market reforms when their Enron stock was up 300% or when they owned a sizeable chunk of pets.com.
Hopefully this time we'll start to see some reforms that make sense.
Also of note: I don't think the legislative branch has any call on whether these shit companies get nationalized... it's up to the Treasury (exec branch) and the Fed (off on its own).
But is our financial system worth saving?
Here's a way to make sure it doesn't happen again: don't let it happen this time.
Get on the phone to your congresspeople NOW, and don't stop pestering them until they pass law barring the fed from nationalize the GSEs. Fannie and Freddie do have some ability to put back fraudulent securities, so let them do so and make the banks take their medicine.
We're already in a housing depression. Prices will to go back to normal (~3x incomes) regardless of who we bail out. Nationalizing this crap is another misstep that will lead to a long and painful depression, partly because the borrowing costs for the US government have the potential to go through the roof. The government and taxpayers need to save themselves right now, or things could (will?) get much worse.
If the government protects itself and keeps it's own borrowing costs low, then there is a framework to supply new banks with credit. If not, well...