Fannie Mae is the nation's biggest mortgage provider, with $1 trillion in assets

National Review, Oct 25, 2004

* Fannie Mae is the nation's biggest mortgage provider, with $1 trillion in assets. Anew report says that it has been cooking its books. The Department of Justice has opened a criminal investigation. Were Fannie Mae a normal company, enforcing the relevant laws would be enough. But Fannie Mae is a "public-private partnership." Translation: All kinds of government subsidies help it make a profit; if it ever fails, taxpayers will be on the hook.

It has become such a large player in housing markets that its failure would also disrupt those markets. For that reason, and to avoid the risk of a massive taxpayer bailout, Alan Greenspan has been recommending that Fannie be privatized. The revelation that its management has been more interested in enriching itself than in serving its supposed public purposes--and may have broken the law--is evidence that Greenspan is right.