Hey, did anyone notice, we are on a bubble binge?

George W. Bush opened wide the government’s coffers to give alms to Big Business, and reaffirmed his populist credentials, by throwing a few hundred-dollars checks at Joe Sixpack.

Now Obama is opening wide the government coffers to give alms, ostensibly to those left underwater when the housing-bubble burst, but ultimately, to bail out investors, who gambled big and lost.

Reaching deep into the bag holding our tax dollars, the Obama Administration moves the portfolio limits on Fannie Mae and Freddie Mac up by $50 billion each, and the Treasury doubles its preferred stock purchase agreements with the companies to $200 billion each.

The rule preventing the now government-controlled giants from owning or guaranteeing mortgages exceeding 80% of the property’s value, is going out of the window, for already guaranteed loans. This is to allow people who made bad purchasing decisions, to refinance at lower rates, using the tax dollars of those who didn’t make such bad decisions.

Uncle Sam will also pay banks up to $1,000 and investors $1,500, to modify bad loans, and will even pay $5,000 to each “bad” borrower, if they become good, like the rest of us, and make their payments over 5 years.

All great news, if:

(a) you bought a house that you really couldn’t afford, but don’t want to give it up;
(b) you are an investor, who took high risks chasing high returns, but now hope the taxpayers will offset the losses; or
(c) you packaged “innovative” investment vehicles, which were both “safe” and offered high returns, and made out like a bandit, but now hope the liabilities will end up with Uncle Sam.

For the rest of us, it just sucks.

But back to bubbles: If we all agree, that we had a housing bubble, doesn’t it seem obvious, that housing prices might be too high? And they will have to come down, to a level at which we, the “market,” feel that prices are “fair?”

Doesn’t anyone notice, that this package is the equivalent of blowing air into a broken bubble? Except that the air is very expensive, and it’s our tax dollars.