We had a housing collapse because of liberal housing rules and Fannie Mae and Freddie Mac securing bad loans? No problem! Time for more of the same, says Obama, who is acting without Congress’ aid.
You see, this is all part of the liberal mindset. When the government screws up a market, it’s never the government’s fault. No, no, no, those who don’t have a profit incentive are never wrong. It’s always those who have an incentive to make money who are wrong.
In fact, even though government officials don’t have any skin in the game, if something does go wrong, the reason it went wrong was because they didn’t meddle enough! (many legislators have been exempt from the laws they pass for some time now)
So, clearly, the solution here is to impose more things on the economy that no consumer wants to buy.
Or perhaps it is our fault as American citizens that we aren’t purchasing risky loans! I’m going to make a change for the better: while shopping this week, I’m going to buy some pizza, Oreos, and a few more subprime mortgage security shares. (from Freddie Mac and Fannie Mae of course)
Come on, folks, do your part for our country and buy more shares of risky loans!
Investment disclosure: Nephew Sam does not actually own, nor plans to purchase, any subprime mortgage shares, besides the number the federal government has already bought with taxpayer money.
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Check out this article on MSN.
“In the first quarter of 2010, Fannie and Freddie — plus Ginnie Mae, which had an explicit government guarantee even before the crisis — guaranteed 95% of all mortgage originations in the United States. In other words, in the first quarter, Fannie, Freddie and Ginnie were the mortgage industry.”
“What do we own? It’s not pretty. Fannie Mae owns or guarantees almost half of the $10 trillion in outstanding U.S. mortgages. But at the end of the first quarter, Fannie and Freddie reported $330 billion in nonperforming loans. And that portfolio is likely to get worse before it gets better.”
Yes, Fannie Mae and Freddie Mac were not directly government owned before 2008, but they were government sponsored agencies, (that is, they were started by the federal government, and regulated by the federal government), which in combination with strict loaning laws that required banks to give loans to poor people, led to the housing collapse. That is to say without federal interventionism Fannie Mae and Freddie Mac, which are majority stake holders in mortgages, would never have existed, and the subprime mortgages themselves would never have existed. It is the federal government’s and congress’ meddling that led to incentives and insurance for risky loans (Freddie Mac, Fannie Mae), as well as enforcement of bad lending to those who cannot afford loans (The Community Reinvestment Act of 1977)
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