As the media keep Goldman Sachs and Wall Street in their blame crosshairs for the financial crisis, government-sponsored entities (GSE’s) Fannie Mae and Freddie Mac have quietly snuck by without much criticism.
While a [1]June 14 Bloomberg.com story reporting that the estimated cost of fixing the two mortgage giants is $160 billion but could grow to be up to $1 trillion, none of the mainstream media outlets picked up the story.
Authors Lorraine Woellert and John Gittelsohn further reported that Fannie and Freddie have already drawn $145 billion from an unlimited government line of credit, and that their bailout costs more than AIG, General Motors or Citigroup: “‘It’s the mother of all bailouts,’ said Edward Pinto, a former chief credit officer at Fannie Mae, who is now a consultant to the mortgage-finance industry.”
Furthermore, the story revealed that in 2008, more than $500 billion of the loans held or guaranteed by the two GSE’s were in subprime mortgages, and $1.98 trillion of their total guaranteed loans were made in states with the highest foreclosure rates.
Naturally, the media continued their trend of [2]not covering any of the GSEs. In April, BMI reported that from March 28 thru April 28, [3]ABC, NBC and CBS’s coverage of Goldman Sachs outweighed their coverage of GSEs 37 to 1. Additionally, none of the networks reported that Fannie Mae’s problems were [4]19 times bigger than Enron’s or challenged the [5]GSEs blank check from the government.
While the media have continually [6]blamed capitalism for the 2008 economic meltdown and [7]championed increased government regulation as a solution, they’ve never pointed their finger at the two government-sponsored organizations that have caused the most damage and taken the most money out of the American taxpayers’ pockets.
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