Fannie and Freddie Dwarf the Rest

When the government put Fannie Mae and Freddie Mac into conservatorship in September, it committed to provide up to $100 billion in equity capital for each company. The companies have drawn down or said they need to draw down $55-60 billion in government equity.

The first thing to note is this amount of government equity investment is greater than the amount is has invested in any other financial institution (so far, $45 billion is the maximum in the case of Citigroup, although the new bailout plan being discussed may raise this amounts). Yet it hasn't received the publicity or scandal-mongering that is associated with TARP recipients.

Why? Because it is a creature of government and its poor financial policies were spurred on and even mandated in some cases by the government in general, and the Democrats in particular - including many of the Democrats who now wield power in Washington (Barney Frank and Chris Dodd are leaders of the pack in this regard). So the left-leaning media doesn't turn up the attack machine on Fannie Mae and Freddie Mac as it does for private companies such as Bank of America or Citigroup.

But Federal Reserve policies, and government promotion of the housing market led by Fannie Mae and Freddie Mac, are the fundamental cause of our economic crisis today (as discussed here). We can't lose sight of that, and the staggering losses at Fannie and Freddie only reconfirm that fact.