Posted by PrestoPundit on 07/20/2008

I’m guessing you’re not surprised the answer is Congress.

“Unlike many well-capitalized savings and loans and commercial
banks,” Alan Greenspan warned in 2004, “Fannie and Freddie have chosen
not to manage that risk by holding greater capital.” Why would they, if
Uncle Sam is underwriting them? Fannie and Freddie kept Congress from
limiting their expansion and from tightening their capital
requirements. Instead, Fannie and Freddie have been recklessly
undercapitalized at debt-to-equity ratios of 20-1 or more, when Bank of
America and J. P. Morgan are at roughly 4-1.

When a
market loss of confidence plunged Fannie and Freddie toward the abyss,
Treasury Secretary Henry Paulson made the implicit federal guarantee

I’m guessing you aren’t surprised either that a Henry Paulson has a long history of being in bed with Fannie Mae officials, and in fact Paulson’s enormous compensation package at Goldman Sachs was made possible thanks to a former top Fannie Mae official.

Every time these people take money out of the economy either through taxing you or through devaluing your money, make no mistake, they are also making sure to stuff huge piles of cash in their own pockets and that of their friends.  And the great thing about it is that it’s all legal, because they’ve made sure to buy the politicians who appoint the bureaucrats, write the laws, and pick the Fed Reserve members.  It’s a fixed game, and you and I are the suckers paying the bill.


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