[Rockin Robbins]

Socialist perspectives on economic issues are always most amusing.

While technically private enterprises, FNMA and FHLMC are quasi-governmental agencies put together for one purpose. That purpose was the feeling that all are entitled to own a home whether they can afford it or not. In the 1990s great pressure was put on financial institutions to grant loans to the "less fortunate," who could not qualify for a loan under present guidelines. These two agencies were formed to purchase these bad loans from banks and thereby insulate them from the consequences of their coerced foolishness. In a way you could call it hush money. People do what they are paid to do* in any sort of society. Greed is irrelevent in this equation. The responsibility lies with who makes the money available and what they are paying for. The government (disguised as mild-mannered FNMA and FHLMC) paid the banks to make bad loans. We got lots of them!

As such entities often do, FNMA and FHLMC proceeded to eat up mortgages until they owned the vast majority of home loans in the country. At this point, they were so large that failure would be catastropic to the economy. When the housing bubble created by the easy money these agencies made available inevitably burst, the US Government had no choice but to reveal the true nature of these fake private corporations by taking over. That was the situation all along. It was just disguised.

What we are seeing is the predictable consequence of dishonestly applying socialist policies in a capitalist society. If we decide that it is in the national interest for the people who earn enough money to be forced to pay for houses of people who do not, then just pass a law, confiscate the money and do it. Setting up paper tigers and knocking them down for public amusement is beneath contempt.

*Rockin Robbinsism #5