Right wingers who concentrate on economics policy hate FDR and The New Deal. Organizations like Heritage and the American Enterprise Institute were created to 'roll back the new deal'. It's not covert, they talk about it all the time. Glenn Beck recently said that FDR was evil and so was The New Deal.
So what the hell does any of that have to do with what's going on right now? Well, as it turns out, a lot. Since one of The New Deal cornerstones, Fannie Mae, could be going under. Though I doubt even the Bush administration is crazy enough to let that happen.
Fannie Mae was created to give low interest loans to lower income families so they could afford housing. In the 20s, low income meant, well, everybody. And low interest mean six percent for thirty years fixed. That type of thing. Before that, a regular Joe couldn't buy a house. Fannie Mae created home ownership in America. Fannie Mae created the suburbs. Fannie Mae created what we call the American dream; a house, a car, two kids and a dog.
Today Fannie Mae, and it's brother, Freddie Mac, secure $5 trillion dollars of housing loans. They are still the cornerstone of the American dream. If you bought a house recently and you didn't buy it in cash, chances are you are on a Fannie or Freddie loan, even if you didn't buy it from them.
If Fannie and Freddie go under and you don't own a house, chances are you never will. If they go under and you are still paying off your loan, well, it's tough to know what's going to happen there. If you are lucky enough to own your house, that's great, but so many of your neighbors may foreclose that you might be living in a suburban wasteland anyway.
I'm sorry if I come off as the doom and gloomer here but this is really bad. Fannie and Freddie need to be bailed out at all cost. As for the righties, hopefully coming this close to the nightmare scenario where The New Deal policies are completely eradicated should teach them how wrong they have been.
Posted by jherr at July 13, 2008 07:30 AMActually if the current system where willingness-to-take-a-clearly-suicidal-loan trumps cash-in-the-bank went away, I would have a house. And most people would be much better off.
And you should say something about reform. Without it, the GSEs are another way for your "righties" to syphon an infinite amount of $$$ out of the taxpayers. I assume you are familiar with the current phrase "privatized gains, socialized losses"?
http://www.nakedcapitalism.com/2008/07/us-most-deceitful-form-of-socialism.html
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