Fannie Mae and Freddie Mac
I welcome any knowledge you can offer on the following subject. I’ll admit that I don’t know too much about these public-private companies, but I do know one thing: it is stupid. The outdated policies that govern these two companies became a bubble too big to pop.
The FDR administration created Fannie Mae, in order to stimulate the housing market during the great depression. Essentially, it would use federal money to finance local banks providing home mortgages. It operated like a national savings and loan, thus the name, “secondary housing market.” After thirty years, the government decided to privatize Fannie Mae, with the financial backings of the Treasury. The monopoly got so big, that the government created Freddie Mac to essentially do the same thing, from what I understand.
The thing about these two companies is that they are the only companies in the Fortune 500 that aren’t bound by the governing laws of the SEC. This means that they don’t have to report any financial crisis that they predict to the shareholders. Allegations of accounting deception and fraud have been surround these companies for a while now.
It’s ridiculous. It’s like the government will slap them on the wrist, while slapping us in the face with these bailouts. Come on!
And amidst this crisis that has apparently been going on for a while now, I would like to mention something I just learned about. Obama, in his short stint in the U.S. Senate(and I mean 130 days short), has received the second most lobbying and financial contributions to a politician in the two companies’ history with $126,349 (the most was Dodd). He states most of of the money came from individual employees, but most doesn’t mean all. McCain does have some stocks and bonds in the company, but no contributions that I found out about. This are reported by the Center for Responsive Politics.
Correct me if I am wrong. To me, this means that if these companies have been going through a financial crisis, why would Obama accept money from these companies? Once again, even if he claims MOST came from individual employees, doesn’t that mean some came from the companies? Why is a candidate accepting contributions from a semi-public company anyway? Would he have known that the government would bail them out when he accepted contributions? Is this ethical? I could be completely wrong in my assumptions, but then again…
These companies are responsible for 4.8 million dollars in congressional contributions. The majority are democrats, but it is still on both sides. We need some deregulation and to privatize them. I don’t want to pay to lobby candidates, so why I am bailing them out?
