Bankruptcy

Excellent Series on Fannie and Freddie

By mcbride

Yesterday, NPR ran an excellent story concerning the rise and fall of Fannie Mae and Freddie Mac.  These entities have a long storied history and their impact has been huge, both in terms of their influence over the federal government as well as their role in the largest housing debacle in history.  The story is a part of a series of stories.  One looks forward to reading/hearing all of them.  Here is a quote:

“But this view probably wasn’t true, according to Dwight Jaffee, an economist at UC Berkeley who has spent his career studying the U.S. housing market.

‘All of the money and all of the tax benefits and all of the Fannie and Freddie costs … have come to zero in terms of having any observable effects on our home ownership rates,’ Jaffee says. ‘Our rates are the same as countries that have never put a penny of government resources into it.’

So how could Fannie and Freddie have taken a government subsidy and, according to Jaffee, produced no benefits?

‘The shareholders of Fannie and Freddie and the employees of Fannie and Freddie pocketed every penny of the subsidy,’ Jaffee says.”

Here is a link to what I gether is a print version of one day’s story: http://www.npr.org/blogs/money/2011/03/29/134863603/kill-them-bury-them-the-rise-of-fannie-and-freddie

Michael

Full post as published by Texas Lawyer Blog on March 29, 2011 (boomark / email).