Weekend at Henry's

In the 1989 movie "Weekend at Bernie's," a pair of young executives create the illusion that their dead boss is still alive to keep a party going. That's not too far from the premise of this weekend's Treasury bailout of Fannie Mae and Freddie Mac, the mortgage giants that have become financial zombies.

Treasury Secretary Henry Paulson wants to prop up the walking dead so the world keeps buying their mortgage-backed securities. His action may calm jittery credit markets, and it may get the companies through the current mortgage crisis -- albeit at enormous cost to American taxpayers. The tragedy is that he and Congress didn't act 18 months ago -- when the cost would have been far less -- and that he still isn't killing the Fannie and Freddie business model that has done so much damage. These corpses could still return to haunt us again.

Fannie Mae was created in the 1930's and was a government agency until 1968 when it was privatized in order to remove it from the federal budget and to hide the cost of the losses from taxpayers. Freddie Mac was created in 1970 to disguise the machinations of Fannie Mae.