Unless you’ve been living on the moon for the past 2 years you’ve heard Obama, Pelosi and team blame the housing crisis (and just about everything else from the Kennedy assassination to the extinction of the dinosaurs) on Wall Street. Indeed the financial engine that drives our economy is complicit. There’s no debating this point. But do you ever get the feeling it’s not the entire story?

In 1999 Fannie Mae and its cousin Freddie Mac were under tremendous pressure. On one hand shareholders wanted to see what they always want to see – profit growth. On the other hand the Clinton Administration wanted to see home loans expanded to low and moderate income people. Risk-based capital be damned!

The result was an easing of credit requirements on loans Fannie and Freddie would purchase from banks and other lenders. The honorable New York Times (and we mean that in much the same way Marc Antony refers to Brutus as an “honourable man”) trumpeted these newly lax credit standards here.

In the decade that passed since this unprecedented credit expansion the list of financial institutions that were (or still are) on life support reads like a who’s who of American finance: Countrywide, Bank of America, Citi, Wachovia, Lehman Brothers, WaMu, Bear Stearns, AIG and so on. The ones that seemingly escape the limelight (and the ones that, not coincidentally, are quasi-government agencies) are Fannie and Freddie.

For the July-September quarter of 2010 Freddie posted a narrower than expected loss – a scant $4.1 billion. During the same quarter of 2009 Freddie’s loss was $6.7 billion.

To date Freddie and Fannie have received $133 billion from taxpayers with estimates that the total will rise to $259 billion making this the costliest bailout in US history. What’s more the financial overhaul signed by President Obama in July was noticeably silent about a clean up or restructuring of these mortgage behemoths.

Where’s the outrage? Where’s the anger? Why aren’t we hearing about where the real blame lies? Is the political situation so desperate that anti-business rhetoric and rage against private enterprise is necessary to hold onto your jobs? Fat lot of good that did if yesterday’s elections are any indication.

Thank you “leadership” for once again reminding us that government functions best when it acts like a referee at a sporting event – when we don’t realize you’re there!