Here’s the central thesis of the far right about Fannie Mae and Freddie Mac. It is taken from the web site: The Neville Awards
(as in Neville Chamberlain), which gives “awards” to Democrats for
their cowardice and other mortal and venal sins. This particular
article claims that the damnably clever Democrats, while the Republicans
controlled the Presidency, House, Senate, Supreme Court, and all the
regulatory agencies, pulled off a deliberate plan to destroy the economy
in order to elect Obama. “Obama, Fannie Mae & Freddie Mac – How the
Democrats Brought Down the Economy in Time to Elect Obama.”
The author summarized his thesis in two sentences. “Fan and Fred and the Problem of Narrative-The GSEs don’t fit the left’s story about how greedy bankers caused the financial crisis. That’s why they haven’t been reformed.”
Actually, Fannie and Freddie are perfect fits for the accurate narrative of what caused this financial crisis (and the Enron-era crisis and the S&L debacle) – epidemics of “accounting control fraud.” The right has simply forgotten that Fannie and Freddie were controlled by “greedy bankers.” Fannie and Freddie were privately owned and privately managed. George Akerlof and Paul Romer explained their fraud scheme in their famous 1993 article (“Looting, the Economic Underworld of Bankruptcy for Profit”). Crucially, they explained that accounting control fraud is a “sure thing.” It will make the controlling officers wealthy and it will do so promptly.
Read more: http://neweconomicperspectives.org/2012/10/the-central-fact-that-folks-dont-get-about-fannie-and-freddies-role-in-the-crisis.html
The author summarized his thesis in two sentences. “Fan and Fred and the Problem of Narrative-The GSEs don’t fit the left’s story about how greedy bankers caused the financial crisis. That’s why they haven’t been reformed.”
Actually, Fannie and Freddie are perfect fits for the accurate narrative of what caused this financial crisis (and the Enron-era crisis and the S&L debacle) – epidemics of “accounting control fraud.” The right has simply forgotten that Fannie and Freddie were controlled by “greedy bankers.” Fannie and Freddie were privately owned and privately managed. George Akerlof and Paul Romer explained their fraud scheme in their famous 1993 article (“Looting, the Economic Underworld of Bankruptcy for Profit”). Crucially, they explained that accounting control fraud is a “sure thing.” It will make the controlling officers wealthy and it will do so promptly.
Read more: http://neweconomicperspectives.org/2012/10/the-central-fact-that-folks-dont-get-about-fannie-and-freddies-role-in-the-crisis.html
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