The year 2008 was full of nasty surprises. One of the biggest was the government takeover of twin mortgage giants Federal National Mortgage Association (FNMA, or Fannie Mae) and Federal Housing Lending Mortgage Corporation (FHLMC, or Freddie Mac).
From the Daily Herald:
Speaking Tuesday in Arizona, President Obama endorsed the bipartisan efforts of [Senator Bob Corker (R-TN) and Senator Mark Warner (D-VA)] to wind down Fannie Mae and Freddie Mac as a first step in making certain that the nation does not suffer again through a housing finance crisis.
One of the things that has been galling is watching various officials tasked to protect the public from financial services miscreants is to have them prattle meaningless statistics about how the number of actions of various sorts that they’ve taken is up relative to the previous incumbents. That’s tantamount to a MASH unit tallying up what a great job they did in improving the vaccination rate while not even looking at a huge rise in the mortality rate and questioning whether their response was adequate.
Fannie Mae, the huge housing finance company, says that for the second straight quarter it did not need more federal bailout money for that period.WASHINGTON — Buoyed by rising home prices, Fannie Mae reported a second-quarter profit of $5.1 billion and said that for the second straight quarter it did not need more federal bailout money for that period.
I was sympathetic to John McCain's plan to eliminate Fannie Mae and Freddie Mac, but Annie Lowrey made a pretty compelling case that it was a terrible idea. But it was a terrible idea for a weird reason: It got rid of a bad idea too fast.