More from Nina Easton:
A message to all of you angry taxpayers this election season with your cross-hairs trained on the likes of Goldman Sachs and JP Morgan Chase: Did you notice that Fannie Mae just trundled up to the government bailout window for another $8.4 billion, days after Freddie Mac pulled down another $10.6 billion in taxpayer funds?
Probably not. The news was mostly buried in the business pages — and, besides, how can these nameless, faceless bureaucracies compete for your attention against the turned-out resplendence of profit-making, bonus-dropping CEO’s like Lloyd Blankfein and Jamie Dimon? (Especially when these faces of Wall Street greed are being scolded by beet-faced lawmakers purporting to represent the public interest.)
So let’s pause for a moment — six months before the mid-term election, as the White House and its allies skillfully stir your ire at Wall Street as a buffer against likely Democratic losses — to assess the true state of bailout island, that place that has (rightly) made you so feverishly mad.
You are especially angry over Congress’ fall, 2008 bipartisan vote to create the $700 billion TARP — popularly translated as a “Wall Street bailout” — and you’re ready to hold incumbents in both parties accountable. But as figures compiled by the nonpartisan journalistic investigator ProPublica show, those anti-Wall Street protestors who now routinely park themselves outside Senate office buildings should consider adding a few more signs to their collection.
The total taxpayer tab for Washington’s Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) — not part of the $700 billion TARP bailout — is now nearly $145 billion and losses at both institutions continue to mount, making the Congressional Budget Office prediction of a $389 billion loss by 2019 seem conservative.
Detroit’s General Motors, GMAC, and Chrysler are still chewing on $70.4 billion in TARP money.
AIG (AIG, Fortune 500), Wall Street’s biggest disaster, has blown through $47.5 billion of the $69.8 billion committed (a subject so sore with Treasury Secretary Tim Geithner you can practically see him pull his hair out every time it comes up). Citigroup (C, Fortune 500), meanwhile, still owes $25 billion of the $45 billion it borrowed.
……But Tea Party leaders are now mostly talking about those two big government culprits in the housing crisis — Fannie Mae and Freddie Mac — and they’re right to do so. “Innovative” and “flexible” lending standards enacted by the Clinton administration to help more Americans afford homes became the low- and no-standards enjoyed by speculators as well as people buying places they wouldn’t otherwise afford. And looser policies at quasi-governmental, profit-making firms Fannie Mae and Freddie Mac fed that appetite by buying up these mortgages.
By 2001, Fannie Mae was willing to buy mortgages with no money down. Between 2005 and 2007, 40% of its mortgage purchases qualified as subprime or Alt-A (loans made, often to speculators, without the usual underwriting standards), according to Peter Wallison, a leading Fannie/Freddie historian at the American Enterprise Institute. Tax policy encouraged homeowners to cash in on seemingly-ever-rising housing prices by using their imaginary “equity” to buy boats and cars and fancy electronics.
Government policy wasn’t the only problem: You can point to the Fed’s loose money policies and an influx of cash from China — and, certainly, Wall Street risk-takers, encouraged by bonus systems, took full advantage of all this rich opportunity while Washington’s regulators slept.
The ultimate targets for outrage should be each and every politician who pushed the Fannie Mae/Freddie Mac trainwreck through Congress and those who continue to feed the maws of this government glutton.
Obama and the rest of the Dem asswipes are spending our money on power grabs and socialist agendas that sets a new standard for hubris. Vladimir Lenin would be jealous.