Fannie and Freddie and Obama and Joe, Oh My!

“For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac… and the sheer magnitude of these companies and the role they play in the housing market… If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.”
John McCain arguing for passage of the Federal Housing Enterprise Regulatory Reform Act (S. 190) which he co-sponsored in 2005. 

Once upon a time, about 15 years ago in a magical place called America, a body called congress, led by self-important people called Democrats, bullied private banks into creating two government-sponsored monsters named Fannie Mae and Freddie Mac.  Under the pretext of feeling sorry for the poor, they accused banks of redlining (deliberately witholding loans from risky applicants) and shamed them into creating something new called the sub-prime market, devoted to giving mortgages to people who had little or no credit. They called this act “compassion.” 

As years went by, the banks, to remain solvent, started bundling these loans and selling them to other lending institutions.  Just to make sure that banks would continue to make the risky loans, a funny-looking attorney general named Janet Reno used the full power of her office in the Clinton Administration to intimidate those who were hesitant to pursue the Democrat agenda.  After all, votes were at stake! 

Eventually, a man named President Bush and another man named Senator McCain both realized that these risky loans were not a good way of doing business and that it could lead to financial disaster.  In 1991 and then again, a few years later, they tried to call attention to the bad things that were being done at Freddie Mac and Fannie Mae, (which are now privatized) and implement changes, but the heads of these agencies prevailed upon their Democrat friends in congress to block legislation that would have brought about acceptable business practices.  (How nice for them! They were making millions of dollars personally, and passing campaign contributions and loan “opportunities” along to their friends).  Democrats in both houses of congress called President Bush a racist for opposing their “compassion,” and refused to consider any reform efforts by Senator McCain.

Eventually, of course, people to whom the loans were made found that they couldn’t afford their ballooning payments and they began using credit cards to pay for necessities.  Oh dear.  That didn’t work, so they took out home equity loans.  Uh oh, that didn’t help either.  So they tried to sell their houses, hoping the bloated price would cover all their debts.  But the pesky market just wouldn’t cooperate!  The cost of housing started to tumble because there were too many houses for sale and not enough people to buy them (a normal free-market correction that stabilizes prices).  People who were hoping that the sale of their home would bail them out of their troubles found themselves holding a mortgage they could not pay.  The good employees at Freddie Mac and Fannie Mae realized what was happening, but they falsified records to make it appear that they were operating in the black.  It’s kind of like when you break a toy and leave it for some unsuspecting boy or girl to come along and find. 

Now, it’s true that the American public was going to suffer the consequences of these actions, but fear not!  Congressmen like Henry Waxman, Chris Dodd, John Conyers, Barney Frank, and Barack Obama were all handsomely rewarded for their loyalty to their friends at Freddie Mac and Fannie Mae.  So do not feel badly for them, boys and girls!  They will not be hurt at all from the fall of these two giant institutions.

What happened to all those people who, having willingly signed for mortgages that they could not afford, defaulted on their loans?  Why, Fannie Mae and Freddie Mac will not be left holding the bag.  It is the lowly taxpayer – you and I – who will end up bailing them out.  Or, as Senator Joe Biden calls it, “being patriotic.”

Liberals, who think they have a monopoly on the attributes of “caring” and “compassion,” should have jumped at the chance to save their country from the coming storm.  But so deeply embedded at the money trough were Democrats, that they supported their cronies in Fannie Mae and Freddie Mac instead, ignoring the pain that would eventually be felt by the American public. 

You see, for liberals, social justice means that everyone is “entitled” to “things.”  If one person has more than another, liberals get all prissy and begin enacting laws designed to force workers into sharing their toys with children who didn’t earn them.  This, to liberals, is what compassion looks like. 

But what happens if the people who do the working decide one day that they’re tired of supporting everyone else in the kingdom?  What if they decide that they’ll just stamp their foot and refuse to continue working and working and working for less and less and less? 

I’ll tell you what happens, boys and girls:  People who own businesses close them when there is no profit or incentive to keep them open.  And when a business closes, it means the people who worked there are out of a job.  If people don’t have jobs, they can’t afford to spend their money on things like restaurants or birthday presents or new cars, so the businesses that sell these things have to close because there are no customers.  Also, it is impossible for people without paychecks to have savings accounts, so banks have less money to loan to people who want to start businesses and create jobs.  Well.  You can see how this goes.  Just like a merry-go-round, it keeps spinning and spinning until everyone gets so dizzy they don’t know which way is up and which way is down. 

So there, dear readers, is our tale about how one thing always leads to another.  We don’t know yet exactly how it will end but we do know this: whenever this story is told in the land of the liberal Democrats, they must always change the names and put masks on the faces so people won’t realize who the real culprits are.  In fact, they wish this whole story would just go away and not get told by anyone. 

But now it’s too late, because you already know.   Well, sweet dreams boys and girls.  

If you can.