This phrase “carefully designed” popped up again and again throughout the conference, as one speaker after another denounced Fannie and Freddie in the strongest terms, only to follow this condemnation with a solemn warning that the government must not let the GSEs’ irresponsible behavior give a bad name to the service they were designed to provide, namely, a subsidy for moderate-to-low-income homebuyers made possible by the implicit government backing the GSEs enjoyed. Speaker after speaker stressed that some more “carefully designed” government program must take the place of the GSEs in providing this subsidy — as if the government planners behind Fannie and Freddie had set out to create a sloppily designed mortgage subsidy.
Only a few participants in the conference had the temerity to note that the design flaw is intrinsic to the subsidy. AEI’s Alex Pollock was chosen to be the token conservative on a panel of industry special-pleaders such as PIMCO’s Bill Gross and liberal activists such as the Urban League’s Marc Morial. Pollock, to his credit, gave as good as he got. Pollock’s three-step plan for the future of housing finance? 1) Counter-cyclical lending standards, which would actually work to tighten credit risks as speculative bubbles started to form. 2) The reprivatization of mortgage securitization. Contrary to the claims of Bill Gross, the mortgage-bond trader who claimed that private investors would not step in to replace the GSEs in the secondary mortgage market, Pollock noted that the private sector was heavily involved in this market before the financial crisis and would probably return if there was money to be made. That means 3) No more GSEs.
Pollock found few takers for his plan, which was odd considering how many conference participants were eager to declare the GSEs already dead. Later, during one of the breakout sessions, it became clear that, while these specific GSEs are dead, the idea of government-guaranteed mortgage lending is going to be with us for a long time. Numerous participants from the private sector and academia voiced support for some sort of combined mega-GSE that would concentrate the government’s mortgage activities into one entity. The classic Washington game of reshuffling the bureaucracies has not worn out its usefulness as a solution for keeping useless agencies alive.
Friends of the young Bill Clinton and Barack Obama spoke of the special glow of promise they had about them, even back in their early twenties. Angels sat on their shoulders. History gave them a wink and said, “Hey, good lookin’, I’ll be back to pick you up later.” Robert O’Rourke? Not so much. He ... Read More
Rule No. 1 of tort law: The bad guy is the one with the most money to pay you. On December 14, 2012, Adam Lanza murdered 26 people, 20 of them schoolchildren ages six and seven. Lanza killed himself, too. Can’t sue him. Lanza had a history of mental illness — a long one. He’d been treated under the ... Read More
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Every element of the college admissions scandal, a.k.a “Operation Varsity Blues,” is fascinating. There are the players: the Yale dad who, implicated in a securities-fraud case, tipped the feds off to the caper; a shady high-school counselor turned admissions consultant; the 36-year-old Harvard grad who ... Read More
Making the click-through worthwhile: some tough questions for Democrats and whether they’re ever willing to tell the progressive grassroots something that they don’t want to hear, Beto O’Rourke’s fundraising mojo doesn’t skip a beat from 2018, some horrific news from Facebook, and Amy Klobuchar tells us ... Read More
President Trump has been doing a lot of tweeting today -- against TV programs, companies, and other things that have incurred his displeasure. These tweets make for interesting reading. One of them is this: So it was indeed (just proven in court papers) “last in his class” (Annapolis) John McCain that sent ... Read More
Nebraska GOP senator Ben Sasse has been lambasted by many of his Trump-skeptical fans in the conservative movement for voting Thursday to uphold the national emergency declared by President Trump. A month ago, Sasse issued a statement, saying: We absolutely have a crisis at the border, but as a ... Read More
On February 12, Joaquin Guzman Loera, a.k.a. “El Chapo,” was convicted of multiple crimes related to running the Sinaloa drug cartel, Mexico’s largest. Thirteen days before his conviction, authorities seized enough of the synthetic opioid called fentanyl for 100 million lethal doses. It was hidden in a ... Read More
The well-meaning David Brooks urges us to prevent suicide in his most recent New York Times column. The crisis is certainly real. From "How to Fight Suicide:": You’ve probably seen the recent statistics about the suicide epidemic — that suicide rates over all have risen by over 30 percent this century; ... Read More