the beginning of time

Paul Krugman writes:

I wish people wouldn’t say that Fannie and Freddie have been “nationalized.” I mean, it’s basically accurate, but it conveys the wrong impression.

The fact is that Fannie Mae was originally a government agency; it was privatized in 1968, not for any good economic reason, but to move its debt off the federal balance sheet (and Freddie was created 2 years later as a competitor.) Private ownership of Fannie and Freddie never made any real sense, and was always a crisis waiting to happen.

So what we’re really seeing now is deprivatization.

As an economist, Krugman should know that for most non-historians history began sometime in the 1950s and 1960s, depending on what events led to things becoming the way they are now (or just recently were). Therefore, for purposes of discussing Freddie Mac and Fannie Mae, history began in 1968.

Advertisements

Comments are closed.

%d bloggers like this: