I'm old enough to have once thought that America needed business, free markets, and protection from government. Slowly this notion has changed since the "free market" has concentrated vast obscene wealth in the hands of a few. The few that got all of this wealth, as we keep finding out daily, did so by cheating, manipulation, stock options, and lots lots more. Even now we have completely incompetent CEOs getting millions in pay checks. My point? I'm now looking for an environment where there is more government oversight, regulation, and ... well, I'm now for real public floggingS of Wall Street executives and movie moguls. It won't fix the oil crisis or global warming, but watching a really good beating would make me sleep better at night. :-)

Here is a brief review of the history of the Federal National Mortgage Association from Wikipedia: Fannie Mae was founded as a government agency in 1938 as part of Franklin Delano Roosevelt's New Deal to provide liquidity to the mortgage market. For the next 30 years, Fannie Mae held a virtual monopoly on the secondary mortgage market in the United States. In 1968, to remove the activity of Fannie Mae from the annual balance sheet of the federal budget, it was converted into a private corporation.

But, it is still a government-sponsored enterprise (GSE) chartered by the United States Congress and is aligned with national policies to support expanded access to housing and increased opportunities for homeownership. The way this enterprise has worked to make money is by creating a secondary market in these loans through securitization so that the primary market debt issues can be bought and—most importantly—traded by investors.

From just this much information, I think I can see the problem:

Here is a giant institution, originally created for the public good and paid for by the taxes of hard working folks, that was then converted into a private corporation. Now, given the fact that this corporation was built into a virtual monopoly in the market on the backs of the taxpayers; and given a line of credit with the federal government that enables it to raise funds more cheaply than its competitors; and runs one of the most influential and effective lobbying arms in Washington, which has been successful in promoting government policies which directly contributes to its growth; would it not stand to reason that this thing would become a magnet for the greediest and most corrupt.

So, was it a surprise in 2004 when regulators found accounting irregularities and earnings manipulation that helped enrich the company's senior executives and presented an a false portrait of Fannie Mae's financial well-being to the public? (Sound anything like Enron?)

But how does this add up? Just this spring, Franklin D. Raines, former chief executive of Fannie Mae, and formerly President Clinton’s budget director, agreed to pay $24.7 million, including a $2 million fine for his role in the 2004 accounting scandal. But the regulators said the fraud had put hundreds of millions in bonuses into the pockets of top company executives from 1998 to 2004 according to the New York Times.

Think any of these guys were busted down to flipping burgers or sweeping out the parking garage?

Wait. Aren't we the homeowners with all the terrible debt? If we bail out the lenders who loaned us the money to buy our homes aren't we in effect financing ourselves?

America proved again that Free Market is for Cheaters and Crooks ! First Stear Bearns,now Indymac,FreddieMac and FanniMae.Why they don't Bailout every Restaurant or any kind of businesses, which are more essential to society than these SCAMPBACKS.And what about the 300 Billions that the Congress just voted for the CHEATERS Home Lenders and Home buyers,without income proof !!!