From the mailbag:
Hi Peter,
Another reason why Siglitz might not be the best Nobel Prize to rely on, for now, is that when he worked for Fannie Mae he flunked big time …
The reader includes a link to this 2002 study, “Implications of the New Fannie Mae and Freddie Mac Risk-Based Capital Standard,” which was co-authored by none other than Joseph Stiglitz. The study’s conclusion? “[T]he exposure of the government to the risk that the GSEs [that is, Fannie and Freddie] will become insolvent appears quite low.”