Freddie Mac Demands More (and More)
If members of Congress are looking for a book to read over their summer break, perhaps they should pick up the children’s book “If You Give a Mouse a Cookie.” It’s the story of how, given a cookie, the mouse will innocently demand more and more things, causing chaos
On August 9, the AP reported that the mouse – Freddie Mac – requested an additional $1.8 billion in federal aid after losing $6 billion during the second quarter. The latest request pushed the total bailout cost for Freddie Mac and Fannie Mae to $148.2 billion dollars.
Keeping with the media’s standard operating procedure, not until the very last paragraph did the report mention how the heralded Dodd-Frank financial reform bill failed to address the two government-sponsored entities (GSE’s).
The AP report, like other media reports, failed to mention that the total cost of the Freddie/Fannie bailout is now 8.5 times the cost of the auto bailout. And in fact, the Freddie/Fannie collapse was 19 times the size of Enron yet the media remained mum on their implosion.
Over the past two years, the Business and Media Institute has kept tabs on the media’s woeful coverage of the GSE’s. The media neglected a report that the total bailout cost for the GSE’s could reach $1 trillion, never mentioned the government’s blank check to the GSE’s, and covered Goldman Sachs over the GSE’s 37 to 1.
With rare exceptions, the media have gone as far as championing the GSE’s, even claiming the mortgage market would be in “worse shape” without the GSE’s help.
With the media turning a blind eye and lawmakers ignoring Republican pleas for reform, Fannie and Freddie will continue asking the government for money, and like the mouse in the children’s story, without proper restraints they’ll ask for more and more.
