When Economic Policy Became Social Policy
21st August 2010
Watching the Treasury conference on housing finance earlier this week, I was struck by the gloomy thought that we will never get out of this housing mess until we are ready to face facts. Treasury Secretary Tim Geithner’s remark that the demise of Fannie Mae and Freddie Mac was caused by their pursuit of short-term profits was not a constructive contribution to the resolution of the major issues before us. In reality, Fannie and Freddie were doomed by a badly designed government housing policy, and government efforts to disguise its responsibility with a false narrative will only make a solution more difficult.