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daemonburrito's Journal: Treasury Dept Puts Fannie and Freddie into "Conservatorship" 4

Journal by daemonburrito

To my Libertarian friends:

After 28 years of laissez-faire orthodoxy, I think the results are in.

Btw, we could have implemented a Canadian-style health care system with the money that it's going to take to bail out the financial marketeers. In addition, having a healthy (and richer) population and businesses with health care off of their books would have boosted productivity (possibly even making up for or exceeding the cost to the Treasury) and kept more manufacturing in the United States.

It's time to put down your copy of Capitalism and Freedom, stop calling anyone with empathy a "collectivist", and take a long hard look at the state of the world (including the giant counterexample that is China).

I promise not to rub your noses in it (much).

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Treasury Dept Puts Fannie and Freddie into "Conservatorship"

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  • "Laissez-faire orthodoxy" would have required letting Freddie and Fannie (and Bear Stearns and...) bite the dust. And letting them know that we'd let them bite the dust, which probably would have prevented this bullshit in the first place.

    This would have required starting back before the Savings and Loan crisis, so that the banks would have their taste of failure the first time around and known that we meant business.

    • It may interest you to know that "sub-prime" used to mean a loan that would not meet the standards of Fannie and Freddie [wikipedia.org]. For most of their lifetimes, both as New Deal government agencies and as corporations after LBJ, they worked very well; both as a social program (increasing wealth among the lower and middle class) and as a stabilizing influence on the financial industry.

      That was the case until quite recently. Fannie and Freddie became political tools, and perhaps an ideological experiment in the "owners

      • by Qzukk (229616)

        While I knew that "sub-prime" were the crap loans, I wasn't aware that Fannie and Freddie were the ones who originally set that standard, thanks.

        For sure, there were some that actually believed that this could last forever; that their ideology had arrived.

        I don't think there was a single person in charge who didn't believe that the feds would throw them the most expensive lifeline available when they "waded into the sub-prime morass", mostly thanks to the S&L meltdown.

        As for how long this will last, it

        • I don't think there was a single person in charge who didn't believe that the feds would throw them the most expensive lifeline available [...]

          The true believer's view is slightly more nuanced. This is part of the reason I brought up Friedman; I think that part of the appeal of his philosophy is that making money can never be immoral, by its nature.

          The appeal of Rand is similar; the ethos takes what once was a burden to the conscience and makes it a virtue, and vice-versa.

          I know that some of those in charge

A method of solution is perfect if we can forsee from the start, and even prove, that following that method we shall attain our aim. -- Leibnitz

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