Fannie and Freddie bailout frustrates U.S. voters

By James B. Kelleher

CHICAGO (Reuters) - The Bush administration's bailout of U.S. mortgage giants Fannie Mae and Freddie Mac frustrated many voters who worried it would set a bad precedent and that well-paid executives would go scot-free.

"It reinforces my theory that if the world was run by retired waitresses, we'd all be in much better shape," said Melissa Reddington, 46, an event planner in Philadelphia.

"Nobody would be able to go home at night until their sidework was done, their stations were prepped for the next day and their money came out right. If you did those three basic things, 90 percent of everything else falls into line."

In the run-up to the U.S. presidential and congressional elections on November 4, Reddington echoed the opinion of others across the country who said the takeover came about "because worried bankers were calling worried bankers" and not because Washington finally sensed the pain of regular borrowers.

"I don't like that we've let it get to the point where we had to do this," said William Hawk, a 69-year-old retired medical product salesman in Clover, South Carolina. "We should have been doing it a long time ago."

Voters predicted company executives would not be held accountable while taxpayers paid as much as $200 billion to keep afloat the two private companies that provide funding for three quarters of all new home loans in the United States.

"They've caused all this damage and now they don't want to pay for it," Kappa Horn, owner of the Slim Goodies Diner in New Orleans, said of the directors.

BIG 3 AUTOMAKERS

Some worried the bailout would set a precedent that could be exploited by other ailing companies such as Detroit's Big Three automakers, which want $50 billion in low-cost loans from the government to develop fuel-efficient cars.

"Here our government is stepping in to bail out privately held companies," said Sharon Ward-Fore, a real estate agent in Oak Park, Illinois.

"Where does it end? Where is the line going to be drawn? They need to help the little people like me who haven't made any money in two years."

Neal Sundermann, 61, a commercial real estate broker and self-described staunch Republican attending an event in Lebanon, Ohio, for Republican presidential candidate John McCain, called the intervention "creeping socialism."

"I would hope that they would put severe restrictions on them (Fannie Mae and Freddie Mac) then downsize them and reprivatize them as soon as possible because I can see them becoming a huge new government agency," he said.

President George W. Bush said the action had been necessary because troubles at Fannie Mae and Freddie Mac, which have $1.6 trillion in debt outstanding, posed "an unacceptable risk to the broader financial system and our economy."

Treasury Secretary Henry Paulson said he could not estimate how big a burden the government's support for the two companies would be on the taxpayer.