The GSEs, that is. Not the cars. Our friend Amity Shlaes explains the fundamental problem with Freddy and Fanny.
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As early as the 1980s academics and segments of financial regulatory community began calling for complete privatization of Fannie and Freddie, arguing that they were receiving an implicit subsidy from taxpayers. F&F always managed to deflect attempts to do so by arguing (incorrectly as numerous studies showed) that they were essential for a healthy housing sector. For a good history see Lawrence White's paper. http://www.cato.org/pub_display.php?pub_id=2467
Posted by: Jim Gatti | July 16, 2008 at 03:06 PM