Today’s Wall Street Journal has an interesting editorial about Washington’s potential plan for your 401(k) assets.

So says Russ Roberts over at Cafe Hayek regarding the Freddie-Fannie bailout:

Following its knee-jerk, free-market, Milton Friedman obsessed ideology, the Bush Administration has seized control of Fannie Mae and Freddie Mac. 

Joke.  A bad one, really.  If anything, this is just the latest evidence that it doesn’t matter who’s President.  Is there anything this administration has done lately that reflects a free market philosophy?  Yet because the administration sometimes uses the rhetoric of economic freedom, it allows people to paint the administration’s policies as market-oriented. 

Another thought: 

One of the most depressing things about the current situation is that people will try and find different ways to “fix” the mortgage market when it was the very attempt to “fix” it that brought us to where we are today.  The government should get out of the mortgage market.  Let individual institutions arise that intermediate between home owners and sellers.  Let those that do it well thrive.  Let those that do it badly bear the costs and disappear.

It reminds me of social security.  We don’t have a retirement crisis.  We have a social security crisis.  We have a problem created by a set of government institutions.

Here’s My Take:  This mess has to be cleaned out.  Unfortunately it will take government to remedy the current disaster since government was instrumental in its creation.  When the dust settles, I agree that Freddie and Fannie should be chopped up and privatized.

Staying on the theme of political skepticism, how about implementing privatized retirement accounts?  Allowing Washington to manage the financial security of retirees is a path to financial ruin.  Just look at the recent study by the Consumer Bankruptcy Project showing that bankruptcies among Americans 75 and older have more than quadrupled since 1991.

You’ve heard me go on ad nauseam about real world financial safety but this is just another demonstration of the fact that investing in Washington policies never leads to prosperity for you.