Wednesday, August 06, 2008

Freddie & Fannie: Off With Their Heads

Cato usually gets it right, and William Poole has done it again.

He tells the story of Freddie and Fannie like it is in this latest article appearing recently in the New York Times. His recommendation: Get rid of 'em.

Alice
[Thanks to VictorianWeb.org for the image.]

He's right: Freddie and Fannie have been government entities from the start, even though they were "privatized." The federal guarantee simply went underground for those years.

Just the other day, private investors of Freddie and Fannie "convinced" Congress to admit that the guarantee was valid and made them sign on the dotted line--with your and my "pen" (read "money"), of course.

So this is the denouement of my recent blog post. Therein, I described an example, among many, of government intervention run amuck, where good intentions have dire consequences--a frequent occurrence where government is involved.

In this case, Freddie and Fannie have, in essence, been nationalized.

Who said the US was not a socialist country?

Here's another viewpoint by Gerald P. O'Driscoll, Jr., also of Cato.

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