A trial balloon, no WaPo:

Treasury Secretary Henry M. Paulson Jr.'s rescue plan for Fannie Mae and Freddie Mac almost certainly means the two mortgage financiers will cease to exist in their current form, igniting the battle over the future of these giant institutions.

Among top Treasury officials [among them Paulson, no doubt], there is increasing interest in structuring Fannie and Freddie like public utilities, according to sources familiar with Treasury's thinking. Under this model, the companies would be able to raise private money by issuing stock, but shareholder returns would be capped by regulators. This would be a new way of structuring the companies so they could maintain their public mission of supporting the mortgage markets without using public funding.

If the companies were eventually to be structured as public utilities, this would preserve the benefits of the hybrid model, which requires them to serve a public purpose without use of public funding. This would also eliminate a downside of this model by removing the possibility that shareholders receive the kind of windfall profits Fannie and Freddie posted during the housing boom [bubble]. Management would have less freedom. The companies also would have less incentive to pursue innovations that might yield greater [pre-collapse] profits.

Why not turn the oil companies into public utilities, too? It's hard to imagine a more "public mission" than providing heating fuel so people don't freeze, after all; or gasoline so people can work. And it's not like plenty of countries round the world don't already do this.

And while we're at it, let's figure out a way to criminalize "financial engineering", so the next bubble doesn't happen.

NOTE The Obama campaign's answer:

Jason Furman, Obama's economic policy director, warned that some of the GOP positions would do more harm than good. "This is a complex problem that doesn't lend itself to a simplistic ideological solution," he said. "The root of solving it is how to disentangle the public functions . . . from the things that the private sector can and should be doing."

True, but that's the kind of answer you hear from an administration -- or a campaign that's acting like it's already won. Come on, guys!

UPDATE Krugman on socialization.