The great bank robbery

So it looks like the plan over at OMB is to make Trump and his advisers even richer:

On Friday, Trump’s transition team announced his selection of Rep. Mick Mulvaney (R-S.C.) as the nominee to head the Office of Management and Budget. Earlier this year, Mulvaney introduced legislation blocking payments by the housing lenders Fannie Mae and Freddie Mac to funds that support low income housing unless both Fannie and Freddie are recapitalized and released.

This is exactly the policy desired by hedge fund billionaire John Paulson, head of Paulson & Co., among other large investors. He feted Trump for a fundraiser in June at a chic midtown French restaurant built into the Bloomberg building where he donated $250,000 to support the campaign. He then led Trump’s economic advisers for the remainder of the campaign and now sits on the transition team advising him on economic policy.

When the housing market tanked and the Great Recession of 2007-2009 began, the federal government took over Fannie Mae and Freddie Mac, both deeply underwater, sending their stock prices plummeting. The Obama administration has since insisted on keeping the housing lenders under government authority and has redirected their profits into government coffers.

During this time speculators like Paulson bought up stock at bargain basement prices and began lobbying the government to end federal control and oversight of the lenders and then recapitalize them and release them back to the private market. Such a policy would, undoubtedly, send the stock price soaring and those who had tens of millions worth of penny-stock would see billions in profit ― including Paulson. Trump had invested between $3 million and $15 million into Paulson’s funds, according to the president-elect’s most recent disclosure report filed in May.

Remember this motto from the Bush years? “Socialize losses, privatize profits.” Here we go again.

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