So far, Sanders’s hypocrisy is similar to that of much of OWS on the government-sponsored enterprises. “I wish they would occupy Fannie and Freddie,” said CNBC reporter Michelle Caruso-Cabrera on HBO’s Real Time with Bill Maher.
In New York and Washington, D.C., the occupiers have been everywhere from the Brooklyn Bridge to the Smithsonian Air and Space Museum. But there have been few if any signs, let alone tents, in front of the palatial-like headquarters of Fannie in D.C. or at Freddie’s sprawling office in the tony suburb of McLean, Va. When it comes to the hundreds of billions Fannie and Freddie still owe to U.S. taxpayers, as opposed to the TARP money largely paid back by the Wall Street financial firms, there is a drum beat of deafening silence from OWS.
This is despite voluminous new data showing that Fannie and Freddie led, rather than followed, in the creation of reckless mortgages and mortgage instruments. In their new book, Reckless Endangerment
, New York Times
financial columnist Gretchen Morgenson and market analyst Joshua Rosner write that Fannie “led both the private and public sectors down a path that led directly to the financial crisis of 2008.”
In the Times, Morgenson has written that Fannie and Freddie were the “biggest and most steadfast collaborators” of the notorious Countrywide Financial. Fannie “assiduously . . . pursued Mr. Mozilo and 14 of his lieutenants to make sure the company continued to shovel loans its way,” according to Morgenson. In 2004, Countrywide “sold 26 percent of the loans Fannie bought,” she reported.
At the end of their book, liberals Morgenson and Rosnernote note with dismay, as have many conservative critics, that the Dodd-Frank financial “reform” doesn’t lay a glove on Fannie and Freddie. Sooner or later, OWS will have to address two financial elephants in Zuccotti Park. If they don’t, they might as well be occupying a cloud.
— John Berlau is director of the Center for Investors and Entrepreneurs at the Competitive Enterprise Institute. He blogs at OpenMarket.org.