The feds can bail out Fannie and Freddie, but who will bail out the feds?

City Journal reports:

As for the idea that better regulation of investment banks can cut this new risk for taxpayers: armies of Washington regulators have long overseen Fannie and Freddie. Those regulators didn’t stop the current meltdown. Instead, they contributed to it by making the government-coddled mortgage industry seem insulated from speculation. Fannie and Freddie artfully captured their regulators long ago, seducing them into allowing tiny capital margins and greater risk. Does anyone doubt that the investment banks, with immense wealth and sophistication, can do the same? Giving the Fannie and Freddie treatment to investment banks, along with the attendant government regulation, could make investment-bank risk-taking seem risk-free—just as it made homeownership seem bulletproof. Meanwhile, even riskier activity will escape such regulation, moving into new areas that financiers will enlarge or invent to escape regulators, until it, too, becomes “too big to fail.”