Government in the Financial Crisis

Great line/comment from Russ Roberts (Cafe Hayek) on the Financial Crisis:

"....they were all GSE’s, all government sponsored enterprises: Fannie and Freddie and Bear and Citi and Goldman and Lehman and on and on. They all had an implicit guarantee from the government that allowed them to borrow at low rates (often from each other), rates that were well below market because of the implicit guarantee. And they were able to borrow at low rates even though they were highly leveraged which made them vulnerable to defaulting on their debt. Despite that vulnerability, they were still able to borrow at low rates. When things fell apart, almost all the creditors, lenders, and bondholders got all their money back, 100 cents on the dollar. The only exception was Lehman. The rest were all taken care of despite funding really bad bets."

AM:

It still baffles me how these two aspects of the financial crisis, which were basically failed government policies, are consistently ignored in many analyses of the crisis. I recently rewatched the Oscar winning documentary Inside Job. Although I enjoyed it, it doesn't even mention this part of the story. Of course, these type of Hollywood documentaries are usually better as entertainment than analysis.