Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Keep CounterPunch ad free. Support our annual fund drive today!

There’s No Place Like CounterPunch

There's no place like CounterPunch, it's just that simple. And as the radical space within the "alternative media"(whatever that means) landscape continues to shrink, sanctuaries such as CounterPunch become all the more crucial for our political, intellectual, and moral survival. Add to that the fact that CounterPunch won't inundate you with ads and corporate propaganda. So it should be clear why CounterPunch needs your support: so it can keep doing what it's been doing for nearly 25 years. As CP Editor, Jeffrey St. Clair, succinctly explained, "We lure you in, and then punch you in the kidneys." Pleasant and true though that may be, the hard-working CP staff is more than just a few grunts greasing the gears of the status quo.

So come on, be a pal, make a tax deductible donation to CounterPunch today to support our annual fund drive, if you have already donated we thank you! If you haven't, do it because you want to. Do it because you know what CounterPunch is worth. Do it because CounterPunch needs you. Every dollar is tax-deductible. (PayPal accepted)

Thank you,
Eric Draitser

Investors and Savers Need a Chance to Recover


On April 9th, shareholders of Fannie Mae and Freddie Mac from across the country converged upon Washington, D.C. to make their voices heard in the halls of Congress. And Tim Pagliara, an investment advisor who also owns shares of stock in Fannie and Freddie, launched the Investors Unite coalition. As the housing finance reform debate heats up on Capitol Hill it is vital that the voices of shareholders – which have, until now, been ignored – are heard so that a bad precedent not be set for disenfranchised investors.

Fannie Mae and Freddie Mac are government sponsored enterprises (GSEs), which buy mortgages on the secondary market, pool them, and resell them as mortgage backed securities. Their business helps support and finance the secondary mortgage market. In principle, this is supposed to help keep mortgage rates down and make products like the 30-year mortgage available to borrowers.

Since the 2008 bailout of Fannie Mae and Freddie Mac, and the beginning of their conservatorship, the stockholders of these two companies, of which I am one, have been stripped of their basic rights as shareholders.

Prior to the financial crisis, shareholders of these companies had legal rights to challenge management decisions through the courts and through proxy battles, or by offering shareholder resolutions. Many prudent investors purchased Fannie Mae and Freddie Mac common stock because these stocks were considered safe investments. In the spring and summer of 2008, knowledgeable, high-ranking government officials like the Federal Reserve Chairman Ben Bernanke, Treasury Secretary Hank Paulson, and the GSEs’ regulator James B. Lockhart, publically and explicitly claimed Fannie Mae and Freddie Mac were rock-solid companies to reassure their owners.

On September 7, 2008, when the U.S. Treasury and the Federal Housing Finance Agency (FHFA) established a conservatorship for Fannie Mae and Freddie Mac, common shareholders lost their voting rights, dividends on preferred and common stock were suspended, and annual shareholder meetings were canceled. Share values plunged to pennies, and countless small and institutional investors who viewed their investments in Fannie and Freddie as secure were financially devastated. Obviously they were deceived by top government officials.

At the time, the administration, the FHFA, the Treasury, and Congress all left shareholders with the impression that the conservatorship was a necessary, but temporary, measure to address the GSEs’ immediate liquidity concerns. The legal mandate of the conservatorship was – and is – to “conserve and preserve the assets” of the companies taken into conservatorship and “restore them to safe and sound condition.” But, at this point, neither goal is being advanced by the FHFA or the Treasury.

In 2012, as Fannie Mae and Freddie Mac were returning to profitability despite financial and operating restrictions on their activities, the U.S. Treasury unilaterally changed the terms of its investment in the GSEs to its own benefit. The Treasury replaced the already well-above-market 10 percent dividends that the GSEs were paying to a “sweep” taking all of the profits of the companies. The GSEs are now sending nearly all of their earnings to Treasury, cannot rebuild their capital, and their shareholders remain in a limbo where they are neither eliminated nor given an opportunity to recover.

The federal government helped stabilize AIG and Citigroup, both of which had investors who were allowed to benefit from the recovery of these companies. It should be no different when it comes to the GSEs’ shareholders, who, in addition, are very useful to the U.S. Treasury in keeping the GSEs’ liabilities off the government’s deficit.

Fannie Mae and Freddie Mac shareholders are not asking for a subsidy. Taxpayers should be paid back in full for their support of the GSEs during the financial crisis. And in fact, taxpayers have already recouped their investment. In March of this year, the two GSEs had finally paid more back to the federal government in dividends – $192 billion – than the $187.5 billion bailout they received.

But the abuse of Fannie and Freddie shareholders isn’t yet over. A number of proposals for housing finance reform have recently been advanced in Congress. Most notable is Senators Johnson’s and Crapo’s bill.

Taxpayers, consumers and shareholders should have serious reservations about this proposal for housing finance reform. It does not sufficiently protect taxpayers from being saddled with another bailout. It does not advance adequate support for affordable and low-income housing for underserved communities. It sets an objectionable precedent for shareholder rights and treatment in this country. Specific concerns about this bill can be found in a letter I wrote to Senators on the U.S. Senate Committee on Banking, Housing, and Urban Affairs.  To see the letter, visit

Unfortunately, the legislative proposals in the Senate and the House do not adequately anticipate the greed and power embedded on Wall Street in its incentive structure. And without laying out a strict regulatory structure, they seem to wrongfully assume that private capital will regulate itself. Do we really want to give even more power to the ‘Too Big to Fail’ banks that were principally responsible for this crisis to begin with?

The GSEs were certainly not blameless for transgressions similar to those larger ones committed by the Wall Street crowd prior to the financial crisis in 2008. But to eliminate the GSEs and unravel this intricate market further, Congress could be opening the door wide for runaway corporate exploitation. We aren’t arguing that the GSEs should be maintained as is; but instead urge they be regulated strongly to prevent their previous missteps and abuses.

Shareholders have begun to fight back by bringing lawsuits challenging Treasury’s “Third Amendment” dividend sweep. This is a good step – but this isn’t enough; shareholder voices need to be heard in Congress.

The news conference on April 9th, followed by meetings on the Hill, was a sign that investors – big and small, individual and institutional – are getting fired up and fighting back. Shareholders from 20 different states made the trip to D.C. to kick off this campaign. Investors at the event were holding signs that read “Where is Our Due Process?” and “Don’t Wipe Us Out!” One of the speakers, Haran Kumar, an IT professional from Georgia and investor in Fannie Mae, said of his investment “I believed it was a sound decision based on statements and laws that politicians had enacted. None of us are saying don’t reform the housing sector. We are saying do it appropriately, respecting the laws that you have enacted.” Mr. Kumar continued, “One of the big issues is we are not being heard. We are taxpayers too.”

I urge other Fannie Mae and Freddie Mac shareholders, individual and institutional, who have yet to come forward to join us and make their voices heard in the coming weeks and months.

Visit to learn more about what you can do to protect shareholder rights.

Ralph Nader is a consumer advocate, lawyer and author of Only the Super-Rich Can Save Us! He is a contributor to Hopeless: Barack Obama and the Politics of Illusion, published by AK Press. Hopeless is also available in a Kindle edition.

Ralph Nader is a consumer advocate, lawyer and author of Only the Super-Rich Can Save Us! 

More articles by:

2016 Fund Drive
Smart. Fierce. Uncompromised. Support CounterPunch Now!

  • cp-store
  • donate paypal

CounterPunch Magazine


October 25, 2016
David Swanson
Halloween Is Coming, Vladimir Putin Isn’t
Hiroyuki Hamada
Fear Laundering: an Elaborate Psychological Diversion and Bid for Power
Priti Gulati Cox
President Obama: Before the Empire Falls, Free Leonard Peltier and Mumia Abu-Jamal
Kathy Deacon
Plus ça Change: Regime Change 1917-1920
Robin Goodman
Appetite for Destruction: America’s War Against Itself
Richard Moser
On Power, Privilege, and Passage: a Letter to My Nephew
Rev. William Alberts
The Epicenter of the Moral Universe is Our Common Humanity, Not Religion
Dan Bacher
Inspector General says Reclamation Wasted $32.2 Million on Klamath irrigators
David Mattson
A Recipe for Killing: the “Trust Us” Argument of State Grizzly Bear Managers
Derek Royden
The Tragedy in Yemen
Ralph Nader
Breaking Through Power: It’s Easier Than We Think
Norman Pollack
Centrist Fascism: Lurching Forward
Guillermo R. Gil
Cell to Cell Communication: On How to Become Governor of Puerto Rico
Mateo Pimentel
You, Me, and the Trolley Make Three
Cathy Breen
“Today Is One of the Heaviest Days of My Life”
October 24, 2016
John Steppling
The Unwoke: Sleepwalking into the Nightmare
Oscar Ortega
Clinton’s Troubling Silence on the Dakota Access Pipeline
Patrick Cockburn
Aleppo vs. Mosul: Media Biases
John Grant
Humanizing Our Militarized Border
Franklin Lamb
US-led Sanctions Targeting Syria Risk Adjudication as War Crimes
Paul Bentley
There Must Be Some Way Out of Here: the Silence of Dylan
Norman Pollack
Militarism: The Elephant in the Room
Patrick Bosold
Dakota Access Oil Pipeline: Invite CEO to Lunch, Go to Jail
Paul Craig Roberts
Was Russia’s Hesitation in Syria a Strategic Mistake?
David Swanson
Of All the Opinions I’ve Heard on Syria
Weekend Edition
October 21, 2016
Friday - Sunday
John Wight
Hillary Clinton and the Brutal Murder of Gaddafi
Diana Johnstone
Hillary Clinton’s Strategic Ambition in a Nutshell
Jeffrey St. Clair
Roaming Charges: Trump’s Naked and Hillary’s Dead
John W. Whitehead
American Psycho: Sex, Lies and Politics Add Up to a Terrifying Election Season
Stephen Cooper
Hell on Earth in Alabama: Inside Holman Prison
Patrick Cockburn
13 Years of War: Mosul’s Frightening and Uncertain Future
Rob Urie
Name the Dangerous Candidate
Pepe Escobar
The Aleppo / Mosul Riddle
David Rosen
The War on Drugs is a Racket
Sami Siegelbaum
Once More, the Value of the Humanities
Cathy Breen
“Today Is One of the Heaviest Days of My Life”
Neve Gordon
Israel’s Boycott Hypocrisy
Mark Hand
Of Pipelines and Protest Pens: When the Press Loses Its Shield
Victor Wallis
On the Stealing of U.S. Elections
Brian Cloughley
Drumbeats of Anti-Russia Confrontation From Washington to London
Michael Hudson
The Return of the Repressed Critique of Rentiers: Veblen in the 21st century Rentier Capitalism
Howard Lisnoff
Still Licking Our Wounds and Hoping for Change
Brian Gruber
Iraq: There Is No State
Peter Lee
Trump: We Wish the Problem Was Fascism
Stanley L. Cohen
Equality and Justice for All, It Seems, But Palestinians