By Thomas Sowell, Brief, Patriot Post, Vol. 08 No. 40, 29 September 2008

“Much of that mess [in the financial markets] is due to the very people we are now turning to for solutions—members of Congress. Past Congresses created the hybrid financial institutions known as Fannie Mae and Freddie Mac, private institutions with government backing and political influence. About half of the mortgages in this country are backed by these two institutions. Such institutions—exempt from laws that apply to other financial institutions and backed by the implicit promise of government support with the taxpayers’ money—are an open invitation to risky behavior. When these risks blew up in their faces, Fannie Mae and Freddie Mac were taken over by the government, costing the taxpayers billions of dollars.

Both Fannie Mae and Freddie Mac have been generous in their contributions to politicians’ political campaigns, so it is perhaps not surprising that politicians have been generous to them. This is certainly part of ‘the mess in Washington’ that Barack Obama talks about. But don’t expect him to clean it up. Franklin Raines, who made mega-millions for himself while mismanaging Fannie Mae into a financial disaster, is one of Obama’s advisers.”