Fannie Mae is not the hero America wants. But she is the hero America needs. So we use her. And blame her. And go on using her. Because she can take it.
Fannie Mae was used by the US Government, the big banks, all US homeowners, all US taxpayers and investors as well as investors around the globe to wash themselves clean. Sinners and saints dumped all their toxic assets on Fannie. All were saved–she has washed them clean.
Several administrations, legions of lawyers, and generations of government workers continue to have a job, receive a paycheck, and drift towards or into happy and celebrated retirement. Bush, Obama, Paulson, Geithner, Lew, Raines, Mudd, DeMarco, Watts–black and white, male and female, Presidents, CEOs, Board members with little to do but sign off on the way things are, Secretaries and secretaries, custodians, accountants, fancy-mouthed lawyers and other smartnicks and all those past and present who profit by leaving things at Fannie Mae and Treasury and the Federal Housing Finance Agency just as they are. Even the scoundrels have been washed clean and allowed to drift peacefully and profitably away from the scene. To paraphrase President Reagan: “I’d say they used her like a bunch of drunken sailors but that would be an insult to drunken sailors.” Having satisfied their needs they can walk away and keep quiet as others make fun of her behind her back. The dirtiest of the bunch like Mr. Treasury, who want to leave the door open just in case, can sit back and let others loudly and publically proclaim Fannie Mae a whore while quietly sneaking back on occasion for a Net Profit Sweep–the financial equivalent of a booty call.
Inertia sets in and protects the ones who have gotten away with it. And are getting away with it. And will get away with it. Everyone knows what happened but they keep their dirtly little secret. It becomes in everyone’s interest to look the other way–I’ve got a job, I’ve got a paycheck, I’m safely retired, I didn’t create this mess and I’m not responsible for it and why should I rock the boat anyway? It never has to be said but they all know to keep their mouths shut if they know what’s good for ’em.
Everyone wins. Well, almost everyone.
Cops and courts are rarely bothered by the criminals. Those who commit a crime and their beneficiaries don’t feel the need to make the courts aware that they have succeeded and are doing just fine. It’s the raped, and the burglarized, and the wronged and the disadvantaged and the weak who bother the court.
The Honorable Margaret M. Sweeney acknowledged as much when she said: “…obviously, no one at the Justice Department is calling me.” (Court of Federal Claims 28 January 2015)
The theatre of the courtroom compels Judge Sweeney to be nice when what she might like to do is crack the Justice Department’s lawyers over the head with their own Bibles.
No doubt she will get no phone calls from the US Treasury. Treasury is gonna be just fine. Mr. Treasury is now back circulating among respectable society looking for his next victim to savage so later he can be seen publically riding to the rescue. The fire-starting-hero-fireman has to start the fire in secret. The fancy boys at Treasury have figured how to be both villain and hero in broad daylight and with the cameras rolling and everyone watching.
Fannie Mae won’t call. She gathered her torn clothes, rushed home and cleaned herself, threw away the rape kit from the hospital, and has decided to say nothing knowing no one would believe her anyway. She asked for it they would say.
Grandma and Grandpa shareholder probably won’t call either. Fortunately they don’t know how to email. They spent a lifetime working and paying taxes and paying on a home and having a family and raising children and playing by the rules and buying shares of Fannie Mae to pass on so their children and grandchildren could have a shot at a better life. They’re in Florida now or tucked away all over the country living quietly busy slobbering and eating catfood to make ends meet and drifting into dementia. They should not be much of a bother. Millions of Americans with Fannie Mae shares tucked neatly into their 401Ks and pensions likely won’t call–they are unaware the US Government has invented a fancy way to leave the company operating in full view while at the same time draining it of all its value. Millions and millions of the American public are unaware. While they are busy doing the heavy lifting–working, paying taxes, making payments on homes, and raising children–they have necessarily delegated the responsibility of governing to government trusting in fair and ethical and decent behavior. They have been told their tax dollars were used to “rescue Fannie Mae” but they are unaware of the US Treasury’s clever but brutish means to beat Fannie Mae into needing rescue and then balance its books on the backs of a smaller group of fellow taxpayers and shareholders.
Fannie Mae saved the day. We can ignore her now. And while Americans are working, and a quiet and house-bound grandpa sits in his own mess because he can’t walk to the bathroom, and US soldiers around the globe “take the hill,” we can take comfort knowing Mr. Lew and the rest of the usual suspects aren’t too terribly put out. Sleep well, Jack. I know you will.