The Moral Obligation of Fannie Mae

The Washington Post reports:

Buried in the 2,652-page report on Fannie Mae that was released Thursday was the transcript of a speech a Fannie Mae executive planned to make invoking the name of Franklin Raines, former chairman of the embattled mortgage giant.

Sam Rajappa, who at the time worked for Raines as the head of internal auditing, told his employees that under Raines they had a "moral obligation" to make money.

"Remember Frank has given us an opportunity to earn not just our salaries, benefits, raises ... but substantially over and above," for meeting financial targets, Rajappa planned to say in a February 2000 address to his underlings. "So it is our moral obligation to give well above 100 percent and, if we do this, we would have made tangible contributions to Frank's goals."

Public and private motives don't mix.That's why Fannie Mae can't achieve two polar opposite goals.The housing market would be a lot more affordable without Fannie Mae.