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 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 not covering any of the GSEs. In April, BMI reported that from March 28 thru April 28, 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 19 times bigger than Enron’s or challenged the GSEs blank check from the government.
While the media have continually blamed capitalism for the 2008 economic meltdown and 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.