Monday, September 08, 2008

Three Things to Remember About the Takeover

Keep in mind:
  1. Freddie Mac and Fannie Mae were never real private sector firms with the normal accompanying incentives, they are politically designed animals from Washington (Freddie in 1970's by Congress, Fannie in 1938 by FDR).
  2. The problem is the transparency of asset value. The government does not have any better handle on this than does anyone else, and I cannot see how nationalization changes that.
  3. Housing prices are the rare zero-sum game, and are not to be concerned about. Despite what our handsomest policy makers say, home ownership is not a right, and selling at a price higher than you originally paid is definitely not right.
As always comments are open.

Check in with Arnold Kling often at EconLog.

1 comment:

Admiral said...

In my mind, it's impossible to argue with your points. What's shocking me is how the markets around the world are rallying at the moment. Is this really the state of education in the world?

Faith lives!! In the state. :)