If you’re not already of hearing and reading about Fannie Mae and Freddie Mac, Arnold Kling has the most insightful overview I’ve found.
I find it ironic that the most regulated industry in “the economy” is the source of so much grief. Of course, our political geniuses are calling for more and more regulation. If we do that, I hope we get a new batch of regulators. The current crew hasn’t done such a whiz bang job.
Back before we had so much financial regulation, we routinely had major setbacks such as the Panic of 1857. Headlines then were a lot like headlines now. But everything recovered, without the benefit of government intervention. Markets work, when allowed to. It wasn’t until the 1930’s that people looked to government to solve financial problems. Hoover and Roosevelt tried, leading to the longest economic downturn in American history. It seems like people are still looking to government. You’d think, after 75 years, we’d learn that we’re looking in the wrong place!
