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Remind me later.

Million Dollar Bonu$e$ at Fannie Mae

But there is a scene I remember pretty well. In the spring of 2001, when I was working as a member of the editorial board at The Wall Street Journal, Franklin Raines, then CEO of Fannie Mae, dropped by for lunch. A number of the editorial writers came to hear his spiel. We all had sandwiches and sodas and Pepperidge Farm cookies in one of the Journal's conference rooms. Among the editorialists on hand was Susan Lee, now one of my fellow columnists at Forbes.com , but back then at the Journal.

Raines told us about his great work to provide affordable housing. We listened, and then Susan and I objected that his scheme put taxpayers on the hook. Raines said it would not cost the taxpayers a dime. We argued that there was an implied taxpayer guarantee. Credit here goes to Susan, who took the lead in this discussion, and followed up with stellar reporting (more on that here) on the horrors lurking inside Fannie.

What sticks with me in particular, though, is the final scene of that long-ago lunch. The conversation got heated enough so that we continued arguing after Raines rose from the table to go. He was touting his achievements at Fannie Mae; we were fretting that his promises were too good to be true. Susan and I walked out of the conference room together, and watched Raines walk down the hall to the closet where he'd left his coat. We watched him fish out of that closet one of the most gorgeously well-tailored raincoats I'd ever seen. He put on that ultimate designer-job of a raincoat and walked out the door, and as he went, I asked Susan, "How much do you think that raincoat cost." The gist of her reply (I do not remember her exact words) was: Plenty, and we're going to pay for it.

And as the scandals broke about Fannie Mae, I thought about that raincoat. As subprime has cratered, as the markets have slid and the politicians have bailed-out, as the costs have soared and the moral hazard has multiplied and the government has ballooned, I have been thinking about that fancy raincoat that Franklin Raines wore almost eight years ago to that lunch. For me, it has become the emblem of those who live well off grand social-engineering schemes that end up bilking ordinary hard-working Americans -- Americans who pay their taxes, pay their mortgages or meet the rent, and who once looked forward to more of the genuine prosperity and opportunity that the free-market policies of Reaganomics so richly delivered.

On grounds of that haunting memory of that luxurious raincoat, I would like to be excused for an evening from the obligation to ponder rationally the current circumstances of Fannie Mae. If it must continue to function at all, I would find some visceral satisfaction in seeing it relocated to a quonset hut in an industrial park, with no bonuses, no closets, and no more raincoats.