One of the biggest lies told in Washington, D.C. is that fiscal and monetary policies are not designed to prop up the stock market. Rather, they are designed to support the economy, claim our leaders. Once again, utter balderdash. On Sunday, the White House and Federal Reserve moved to give the big mortgage firms, Fannie Mae and Freddic Mac, more capital. It was announced Sunday evening to reassure Asian markets, and U.S. markets when they opened Monday. When the Fed in March rescued Wall Street by subsidizing the salvation of gambling den Bear Stearns, it acted before the opening of Asian markets -- all the while insisting that it wasn't interested in propping up markets. In the new program, the Fed will open the discount window to Fannie and Freddie. That's not a bad idea. The federal government would like to lend to Fannie and Freddie: again, that's OK. But Treasury Secretary Henry Paulson, a former Wall Streeter, will seek Congressional permission for the government to buy stock in Fannie and Freddie. This is a blatant market manipulation move. Initially, the stock market rejoiced, but now it is backing off (10:15 a.m. July 14) with Freddie stock down more than 17 percent and the overall market trending downward. Fannie and Freddie own or guarantee more than $5 trillion in mortgages, but have only $95 billion in capital. It is time for Paulson to admit what he knows: neither may have enough reserves to ride out the housing debacle. If they had to liquidate their assets to repay liabilities, both would be insolvent. It's OK to bolster their reserves, but why try to prop up their stocks, and the stocks of the whole market? Has Paulson ever heard of a free market? He preaches it all the time. Propping up stocks is not the job of either the government or the central bank.