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Bigger Than Enron: Bailout for Fraud-Ridden Fannie Mae

Started by cordblomquist · 10 months ago

Following in the wake of Friday’s massive bank failure, and the Senate’s passage of an economically destructive and pork-filled mortgage bailout bill that will further destabilize housing markets, the federal government is now moving to bail out the mortgage giants Fannie ... Continue reading »

2 comments

  • HansBader

    11 months ago

    The Supreme Court's 1995 Lebron decision is, alas, probably insufficient to judicially classify Fannie Mae as governmental. Like many quasi-governmental corporations that enrich themselves at taxpayer expense, it probably does not meet the exacting criteria for being RECOGNIZED as governmental by that decision, even though it might as well be from the vantage point of hapless taxpayers forced to bail it out.

    Much of its board is not appointed by the federal government (unlike, say, the Public Company Accounting Oversight Board, whose members are entirely picked by the federal SEC commissioners).

    And it does not have broad regulatory powers, the way that the PCAOB, which can impose multimillion dollar fines, does.

    It doesn't satisfy each of the Lebron factors for qualifying as a governmental entity, the way that the PCAOB and Amtrak, classic examples of governmental agencies, obviously do.

    Lebron illustrates that being labeled as "private" by Congress, or being chartered as a "private" institution, is not enough to make a governmental agency "private" for purposes of the Constitution (much less truly private in fact).

    But many corporations that are subsidized by the taxpayers and have an incestuous relationship with government officials nevertheless are not deemed governmental entities, even after the Lebron decision.
    reply
  • Rod

    10 months ago

    Many corporations, whether government, private or a murky mixture of the two, would not be so dependent on the Fed for bailouts from their greed and incompetence if the taxpayers simply refused to pay Federal income taxes. And the taxpayers would be better served because what would be their Fed tax money could actually be used for better local education, micro-loans etc. Besides, we know there is no law that says US citizens MUST pay federal income tax. If you refuse to give them money...if many refused...who would it hurt but the greedy bastards destroying the US. Remember, the US Fed is largely, as is the case in many other countries, controlled by the Bank of International Settlements in Switzerland. Check it out. Some people would say the country would fall apart if no federal income tax was collected. Oh yeah? Look at the country now!
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