Tonight I watched Brian Lamb on C-Span interview Peter Wallison from the American Enterprise Institute about the failure of Fannie Mae and Freddy Mac. Basically this is a story of greed and corruption. Fannie Mae was created by the Johnson Administration in 1968 as a Government Sponsored Enterprise. (That is a bad sign, as far as I'm concerned, since LBJ was fundamentally corrupt.)Originally it was a government agency, but Johnson wanted to get its debt off of the governments books so he set it up as a public corporation backed by the government. This was about the same time that he started including Social Security in the Federal Budget so he could use the excess FICA payments to reduce the size of the Federal deficit. Freddy Mac was created a few years later so that Fannie Mae wouldn't be a monopoly. The government gets the right to appoint 5 of the 15 members of the board of directors of the two organizations. Over the years a culture of corruption developed as Fannie Mae and Freddy Mac morphed into political organizations that backed home mortgages.. Fannie Mae hired a lot of friends of congressmen, and people leaving office were appointed to the board, etc. Congress used Fannie Mae and Freddy Mac to funnel money to their friends without having to make federal appropriations to them. The amount of money paid to former administration people was outrageous. For example Jaime Gorelick, the Clinton Administration Deputy Attorney General who put the wall between intelligence agencies and law enforcement to stop investigation of illegal foreign campaign contributions to Clinton, was paid $26 million between 1998 and 2003. (A nice payoff for protecting Clinton's flank.)President Bush never liked Fannie Mae and Freddy Mac and refused to appoint people to be on the their boards. But, Republicans in Congress thwarted his efforts to reform the organizations. (Both political parties are responsible for the corruption of the two organizations.) McCain has said he would try to reform them; maybe he will be able to if elected but it is doubtful that he can succeed, even now that they have basically failed. (There is no chance that the Democrats will do anything as long as Barney Frank is in office, even if Obama is elected.). What is needed is wholesale defeat of people in Congress, and also discharge of the current crop of Congressional Aides and Staffers.