Thursday, July 24, 2008

Good PR? 

Fannie Mae and Freddie Mac live charmed lives. Most other corporations in the US would be allowed to stew in their failures, but not these two quasi-governmental businesses. They have the politicians where they want them -- in their corporate pockets. This is ultimately harmful to the two companies because they now believe that they can't fail no matter what they do. The government will bail them out. There is no punishment for risky behavior, and there is no regulation in the marketplace. Politicans may regret this bail-out eventually. Right now, one can admire the public relations power that these two companies have over Congress. Other corporations, such as General Motors, must be envious.


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