Fannie and Freddie ask for $7 billion more

Robert Kuttner, distinguished senior fellow at the New York-based progressive think tank Demos, argues that if Fannie and Freddie are going to receive public money, then they should be public entities.

"Fannie Mae and Freddie Mac should go back to Fannie's pre-1969 role as a public corporation run entirely by the government," said Kuttner. He added, "They should not be in the business of facilitating complex financial slicing and dicing. Prior to 1969, Fannie Mae worked like a Swiss watch."

Kuttner also said that, as public institutions, Fannie and Freddie should be "force]s] for the drastic simplification of the mortgage industry."