Why is the government trying to blame the market for the failure of their Fannie May and Freddie Mack programs

Question

http://www.lewrockwell.com/rockwell/fascist-creations-fdr.html

"Government-sponsored enterprises are not subject to market discipline like regular private sector companies. Their securities are listed as government securities, so their risk premiums were not dictated by the free market. They could leverage themselves at 50-, 75-, 100-1, pyramiding debt on a tiny foundation of equity. The financial markets have long believed that the GSEs would be bailed out no matter what. And so this put them in a completely different position from a company like Enron, which the markets watched closely. What's causing the current panic is that the markets have wised up and started evaluating these institutions by market standards."

"In other words, we are not talking about market failure. If you have a housetop you can shout that from, please do so, because the press and the government are going to make every effort to blame private borrowers and lenders for this calamity."

Answer 1

They're doing it because they can't just say "WE WERE WRONG". What would their voters think?

Better to pass the blame on to the free market, which had very LITTLE to do with it.

These government sponsored programs have demolished the housing industry, and no "injection" of funds is going to fix it! They've created a housing bubble with these NINJA (No income + No job = Approved) loans. There is an over-supply of houses and not enough people who can afford them! The only reasonable thing to happen now is for the housing market to crash. It's going to anyways?! What good does it do people to build more if the ones already there are sitting empty??!!

They're choosing to cover up their mistake by devaluing our dollar by a ridiculous amount. As if the average american citizen weren't struggling enough because of the puny job market and high gas prices,  we are going to pay more for food, gas and other basic necessities just to survive... Just because their little program didn't work.

It's all  cool with them though, because the investors, CEO's and bureaucrats will all be sitting pretty whilst blaming their failures on the free market.

Hey, I have a great idea,

Lets let them see what they can do with health-care and insurance!