Fannie and Freddie: Ron Paul called it in 2003

The whole ugly mess that has slowly revealed itself over the last week regarding GSE’s Fannie Mae and Freddie Mac were carefully foretold by Ron Paul in 2003:

The connection between the GSEs and the government helps isolate the GSE management from market discipline. This isolation from market discipline is the root cause of the recent reports of mismanagement occurring at Fannie and Freddie. After all, if Fannie and Freddie were not underwritten by the federal government, investors would demand Fannie and Freddie provide assurance that they follow accepted management and accounting practices.

While Dr. Paul wasn’t the first or the only one sounding the alarm on Fannie and Freddie, it sure is nice to know that there is someone in Congress that is sharp enough and honest enough to see a train wreck in the making.