Blame Game

Who "Lost" Fannie Mae & Freddie Mac?

When China fell to the Communists after WW II in the 1940's, it triggered a full-scale national "soul-searching" about where to place the blame (the Democrats lost). Now that the Treasury has taken over Fannie Mae and Freddie Mac, we're in the early stages of assigning blame for a mess that could ultimately cost taxpayers hundreds of billions.

There's a lot at stake, not just for the housing market but the entire U.S. -- if not world -- economy.

Now that the U.S. effectively controls Fannie Mae and Freddie Mac, it must decide what to do with them. In turn, that depends on understanding how things went so wrong.

Only once you get the diagnosis right is it possible to make the right (public policy) prescription . . .