The WSJ covers the Administration’s plans to return Freddie Mac and Fannie Mae to private ownership, while retaining their government guarantee.
The principles announced Thursday represent a major reversal from what leaders of both parties over the past decade promised—to abolish the companies, which guarantee roughly half the U.S. mortgage market. The approach, which doesn’t require approval by Congress, would mark an important win for investors who have been betting politicians wouldn’t follow through on those promises.
Exactly. Back in 2008, government officials claimed to understand that privatized profits and socialized risks was a bad model. The main thing this plan accomplishes is to reward the speculators who bet that the government officials would forget that it is a bad model.
The Administration did throw a sop to me, so to speak:
Treasury also said FHFA should reassess whether the companies’ purchases of cash-out refinancings and loans for investment and vacation properties align with the firms’ core mission.
You could get them out of that business without returning them to private ownership. In fact, private owners were will lobby much harder to continue to provide loans that do nothing to promote saving through home ownership.
‘This time is different’
A huge success for the Russia Hoax is that Trump has no political capital to fight off the rich speculators, as well as having little personal interest in it. Having been a successful speculator investor in the past, that’s understandable.
It’s good to call attention to this failure of the Conservative-Libertarian (not! ??) Reps who are unwilling to fight against the socialization of risk when it comes to promises of “more access to house loans”.
I, too, longtime Lib, now lib-Rep, feel the culture wars are far far more important than marginal econ changes that the Reps seem unable to fight in PR wars so as to promote more home ownership. Too many Reps prefer, like the Chinese Politburo folks & the Clintons, to use gov’t positions so as to get personally more wealthy.