Swept under the rug

Opinion

$150 Billion and Counting -- Where Is the Mainstream Media Coverage of Fannie and Freddie?

What is $150 billion really worth? It’s enough to buy each and every NFL franchise about five times. Or it could pay the median household income more than 3 million times over in the United States. It could even pay for 500 days of the war in Afghanistan at $300 million a day.

But it doesn’t buy much media coverage when that $150 billion is misspent by our own government and paid for by the increasingly over-stretched taxpayers.

That’s been the sordid tale of mortgage giants Fannie Mae and Freddie Mac for years. And thanks to the left-loving gang on the network news, it doesn’t get any attention.

Much like the rest of the United States, Fannie and Freddie are in crisis – suffering a recent downgrade by Standard & Poor’s.

Who can blame S&P? The combination of these two inept operations has cost Americans more than $150 billion and the meter is still running faster than a running back on steroids.

In the second quarter, Fannie Mae lost another $2.8 billion, edging out the $2.1 billion lost by Freddie Mac in the battle of ineptitude. Together with the Federal Housing Authority, these are the rocks that provide the foundation for $5.5 trillion in housing loans.

White House strategies on housing have repeatedly failed and they claim they are “committed to winding down Fannie and Freddie,” as spokesman Matt Vogel told The Washington Post on August 16. -- In other words, they are claiming to embrace the conservative position about a decade too late.

Besides, that is one of those Washington claims that many of us would simply call...well...“lies.”

The Post said the effort would “be phased in over five to 10 years.” The same article quotes former director of Obama’s National Economic Council Larry Summers saying that the time period might be after a decade or so. That’s far enough in the future that it might as well be represented by the infinity sign in math – one of those things you are forever moving toward and never managing to reach. Washington-types call it "kicking the can down the road," but what they mean is that taxpayers get kicked in the can.

If Fannie and Freddie keep losing at their current astonishing rate – about $5 billion per quarter – that’s another $100-$200 billion in those 10 years. And lots more if the problem remains unfixed.

For all of that, morning and evening news shows on ABC, CBS and NBC have only talked about the business side of Fannie and Freddie 18 times in 2011. Four of those mentions were about the recent S&P downgrade. And only four of the other Fannie/Freddie mentions covered anything involving what the downgrade means to over-taxed taxpayers. Every one of those stories was on NBC, where at least the network told viewers that “the troubled mortgage giants have cost taxpayers $150 billion since 2008.” Heck, network reporters mentioned Enron nine times and that bankruptcy happened 10 years ago. But that was a private sector business, so I guess that's why it’s OK for journalists to demonize it.

Given that NBC was the only network to worry about taxpayers, it can be forgiven for the incredibly lame comment from “Today” real estate contributor Barbara Corcoran who cautioned that lower housing prices weren’t likely in the near future, saying “you certainly aren’t going to see cheaper money around the bend, especially with what’s going on with Fannie Mae.”

What’s going on, indeed. To know that, you’d have to be a dinosaur and actually read a newspaper. Network broadcasters have operated more like military censors than newsmen when it comes to government boondoggles at Fannie and Freddie, and the media problem has been going on for more than six years.

Go back to the early days of the new millennium and The Wall Street Journal was warning about sleazy activities at Fannie. An Oct. 4, 2004, Journal editorial referred to the crisis at Fannie Mae:

“For years, mortgage giant Fannie Mae has produced smoothly growing earnings. And for years, observers have wondered how Fannie could manage its inherently risky portfolio without a whiff of volatility. Now, thanks to Fannie's regulator, we know the answer. The company was cooking the books. Big time.”

This all evolved into years of accounting scandals, management changes, cozy dealings with Congress, corruption and ties to top leaders in Washington connected to President Bill Clinton and Mr. Transparency, Barack Obama.

What all that adds up to is a problem that many in Washington don’t want to address. It’s much easier to just sweep it under the rug. The compliant media does much of what the administration wants, so the networks pay little attention.

But there are still billions of reasons why journalists should focus on Fannie Mae and Freddie Mac. Back in 2008, the mortgage duo was worth nearly $11 billion. Almost all of that is now gone, along with the $150 billion they have cost taxpayers. We can’t change that fact. That money is lost forever. But the casual way the media handle continued losses of billions of dollars every quarter – that needs to change.