Bailing Out Statism

The key to understanding the saga of Fannie Mae and Freddie Mac -- the newly nationalized twin government-sponsored enterprises (GSEs) that dominate home financing -- is this: They were created -- intentionally -- to distort the housing and mortgage markets. That is, government planners were not content to let voluntary exchange and spontaneous market forces configure those industries unmolested. So -- holding the taxpayers hostage -- they intervened. Make no mistake: the collapse of Fannie and Freddie is government social engineering predictably gone bad.
The rest of this week's TGIF, "Bailing Out Statism," is at the Foundation for Economic Education website.