Government-Sponsored Enron Billion-Dollar Scandal Not Ready for Prime Time

Free Market Project ^ | 4/4/2005 | Dan Gainor

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It’s a familiar story. An enormous company reveals its “accounting problems.” The problems are found to be far worse than anyone realized. The CEO is forced to resign. Other high-ranking executives follow. The stock price begins to drop. Billions of dollars might be lost. The politically savvy CEO even has direct connections to a presidential administration.

If the word “Enron” has formed in your mind, you’d be close, but wrong. Welcome to Fannie Mae, the nation’s second-largest financial company. Only Fannie Mae, officially known as the Federal National Mortgage Association, isn’t like any standard Wall Street business. It was founded by Congress to increase the amount of capital available for the secondary mortgage market. Fannie Mae is a Government Sponsored Entity (GSE) and enjoys a congressional charter, limited oversight, and a strongly implied government commitment to cover any losses.

This billion-dollar scandal has highlighted questionable practices by the lender and the response from America’s broadcast media has been almost complete silence.

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I saw something about this in The Washington Times and its amazing. What's that Washington expression? "A billion here, a billion there. Sooner or later your talking about real money."

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"A billion here, a billion there. Sooner or later your talking about real money."

I think it was everett dirkson, republican senator from IL in the 50's said this.

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Thanks, it's even more true now.