Rescue mortgage-finance giants, but with accountability
 

Talk about trying to corral the horses after they've fled the barn.

The Treasury Department's plan, devised over a very feverish weekend of negotiations, to bail out the mortgage-finance giants Fannie Mae and Freddie Mac has the value of saving these institutions from a massive loss of public and investor confidence, which is their lifeblood.

But make no mistake, the already hard-pressed American taxpayer and consumer is riding to the rescue once again. This is a financial crisis that has unfolded because greed and irresponsibility in the banking sector ran amok, and government lacked the will or ability to stop it.

For a decade or more, ordinary Americans have been treated as suckers by lenders, with Wall Street happily along for the ride. The banks were eager to make loans or ship credit cards to people they knew were high-risk and squeeze them when payments came due. The credit and mortgage crisis is a classic American tale of the wealthy stepping on and over the little guy.

Congress must act on the bailout immediately, and include a set of tough regulations that will restore confidence in the housing market. Fannie and Freddie are indispensable — their portfolio totals more than $5 trillion, about half of all the money in the system. If there is no immediate repair, the housing sector is in danger of collapse and the economy in danger of depression.

But rounding up the horses is only part of the job. President Bush and Congress must determine, without fear or favor, how these failures occurred and how existing checks and balances in the system were forgotten, ignored or overridden.

The idea should be to close the loopholes, not engage in the kind of finger-pointing demonstrated in the IndyMac Bancorp case. Regulators blamed Sen. Chuck Schumer for releasing a letter that prompted a run on the bank.

Clearly, the bureaucrats would have preferred that the bank's precarious situation remain a secret to IndyMac's depositors. That's the attitude that created this crisis — don't tell the public anything other than what they owe and when it's due. That attitude must be altered if this fiscal calamity is not to be repeated.