In Case There's Any Doubt
I've been saying for a while that the mortgage crisis occurred because government distorted the market. In case there's any doubt, here's some stats about the magnitude of its involvement:
Government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac hold $5.4 Trillion of the $12.0 Trillion worth of U.S. mortgages.
Fannie and Freddie originated or funded 90% of subprime mortgages.
Source: Investor's Business Daily http://www.ibdeditorials.com/IBDArticles.aspx?id=322782906144146
3 Comments:
Actually, that simplifies things a lot. It means we can solve much of the crisis by winding up Fannie and Freddie, if we choose to do so.
Unfortunately, Barney Frank says that winding up Fannie and Freddie is a non-starter. You and I, at least, can take credit for trying to prevent Barney from ever having got into a position of power - you may recall that in his first Congressional election we addressed envelopes for one of his opponents!
I remember that well. Back when I was at the nexus of power... and didn't know it.
In any case, there's always another election, one can always hope.
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