we had already agreed to this in theory adn as PIMCO announced last Thursday via Bill Gross that they would buy ZERO in any bank offerings until Paulson stepped up and put the Federal balance sheet on the line, we knew this was coming and the Congress and markets have been debating the moral hazard here for over a year now, so that may be what she was referring to IMO, we also stepped in in July..

from July 14th:

http://tinyurl.com/6dwfrl

....The Bush administration and the Federal Reserve announced an emergency rescue plan Sunday to bolster Fannie Mae and Freddie Mac, which hold or guarantee more than $5 trillion in mortgages -- almost half of the nation's total.

The plan would temporarily increase a long-standing Treasury line of credit that could be provided to either company. Treasury also said it would, if necessary, buy stock in the companies to make sure they have enough money to operate.

Of course, these are Democrats we're talking about so we'll see if they can take advantage.  They just decided not to put their GOP colleagues through an uncomfortable SCHIP vote because apparently it would be so divisive and partisan to make the GOP vote against giving poor kids health insurance two months before an election.  Here's an idea, if they really want to be post-partisan, why not schedule a flag burning vote where that SCHIP vote used to be.

My question would be, who are the stockholders?  Aren't they mostly large investors like pension funds - 401Ks, union pensions, state govement employees, teachers?

if taxes are 0%, you will raise $0

if taxes are 100% (total confiscation) you will raise about $0, because no one would do anything taxable, and/or they would hide all of their work to avoid paying taxes

for all rates in between 0 and 100, you will raise more money.

In fact, there is some rate at which the government will get maximum revenue.  If you graph it, where the X-axis represents the tax rate, and the Y-axis represents the amount of revenue collected, it will look like a Bell Curve.

This is all completely obvious and indisputable.  There are situations in which raising the tax rate can result in less revenue.  In fact, Hillary Clinton and Barack Obama debated this several months ago.  Hillary got the better of the exchange, and after the general election, Barack flip-flopped.  Now he says capital gains taxes should be kept low (20%, which is higher than Bush's 15%, which McCain wants to keep, but much lower than before Bush got his tax cuts passed--it used to be 40%).

of course the proposed reforms by Paulson were aimed at limiting their 'portfolio'; which really does function as a hedge fund, (and Jim Johnson former CEO who works for Obama vetting could tell him all about it), but they could have passed reforms they wrote themselves.....

200 billion off the cuff with more to follow

Cramer is very liberal leaning and IIRC from the Kudlow & Cramer days took the DEM side..

he calls them as he sees them and I agree with him

Dodd is doing a hearing and the last Democrat I think should be asking the questions is a man who took a VIP loan from Countrywide who helped lead this subprime bubble to the popping point....

The question for a long time was whether GSE's should be wholly private because of the implicit federal guaranty.  They were permitted to issue stock and to pay dividends.  So Fannie mae and Freddie Mac have been a hybrid for a longtime.  A true Republican would say eliminate the implicit guaranty and let them be totally private.  If they fail, let them fail.  Unfortunately. Freddie Mac and Fannie mae are much too big to allow to fail and  foreign governments have too much money in them to allow them to not protect principal.  So in a strained way, Palin was parroting a standard Republican mantra.  However, the time for that mantra has passed.  And so her comment was really quite silly.  The die is cast, the Rubicon has been crossed, the cows are out of the barn, etc.