Economics

Paul Volcker: "It's clear Fannie Mae and Freddie Mac need to go."

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SmartMoney just published an interesting interview with former Federal Reserve chairman and recent Obama economic adviser Paul Volcker. I wonder if the White House will take this piece of advice seriously:

Q. What's missing?

[Volcker]: People talk about Fannie Mae and Freddie Mac. That's a challenge for next year and year following. We are going to have to reconstruct the whole mortgage market and you can't do that overnight. The mortgage market now is almost a wholly owned subsidiary of the United States government. Almost all the mortgages made now are insured by the government, bought by the government, and the guys at Fannie Mae and Freddie Mac are the market.

Not much exists without the government running it. I don't think that's what we want. A lot of problems surround the whole mortgage market. It's clear Fannie Mae and Freddie Mac need to go. We don't need these hybrid institutions. You don't know whether they should be responsible to the government or to stockholders. It's an unfortunate invention.

Read the whole interview here. Back in March, Reason Foundation Director of Economic Research Anthony Randazzo explained why it's time to kick Fannie Mae and Freddie Mac out of the housing market.

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  1. All your mortgages are belong to us.

  2. FM&FM; have not received the credit due that they deserve for their contribution in destroying the economy.

    Many folks agree that the real estate bubble was the main crisis that set off the tanking of the economy, yet somehow FM&FM; remained immune from any of the consequences that other institutions were forced to deal with as a result of the bubble bursting.

    And we can thank Dodd and Frank for that. What’s even worse is that Dodd and Frank were primarily responsible for the oversight and support of FM&FM; during the bubbles expansion, yet they were then allowed to create the legislation that is there to supposedly correct what they allowed to get screwed up in the first place.

    Face. Palm.

    1. Could not agree more Tman! I guarantee that most people have no clue that FMx2 own their mortgages or even care if they do know. Much easier to demonize the twin bogie men of Wall Street & Banksters then to actually dismantle the institutions that enabled the madness.

      I’m glad Volcker is *finally* saying what needs to be said, but I’m afraid he’s a voice crying out in the wilderness.

  3. “We don’t need these hybrid institutions. You don’t know whether they should be responsible to the government or to stockholders. It’s an unfortunate invention.”

    One could say exactly the same thing about the Federal Reserve.

    1. The federal reserve has stockholders?

      1. Yes, the banks.

      2. Yes, the banks that operate in any particular federal reserve district and use federal reserve services( check clearing, FedWire, borrowing at the discount window, etc) must buy stock in their particular district federal reserve bank, in rough proportion to their size and the amount of services used. This is what it means to be a Federal Reserve member bank.

  4. “It’s clear Fannie Mae and Freddie Mac need to go.”

    They go when you pry them from my cold, dead butt-cheeks.

    1. Exactly. Fire Island Barney will no more part with Fannie and Freddie than he’ll part with that one extra dollar for non Senior Citizens.

    2. You really know how to hit me where it hurts.

    3. You better not post under someone else’s name. Some of the more prolific whiners here might get a little pissy.

  5. If you haven’t already, flip over to Google News and watch the spin on the economic growth numbers.

    Hook up a turbine and you got some serious GREEN energy.

  6. Kill them.
    KILL THEM!
    Kiiillll Themmm!!!

    1. Hey Hey! Hi Ho!
      Fannie Mae has got to go!

  7. Paul, you statist fuck. “We” (the government) don’t need to reconstruct anything. Just go the fuck away.

    1. Old fart has lost all credibility. He stands behind Barry and Timmay as a prop but has virtually no influence in setting policy. If he really cared about fixing things, he would resign and very publicly tear Barry, Larry, Timmay and Ben a new one.

      1. He’s always been a control freak and statist. He is just not always in line with what the Administration wants.

  8. You know, you read something refreshing like that from a former Fed chair, and it’s obvious Paul Volcker is fucking racist. Damn it, it’s everywhere.

    1. He wants control, not responsibility. I wouldn’t assume for a second that he means to move the market into the private sector. He just wants to move the responsibility back to the private sector. He still wants the power to control the process.

      1. How the fuck else are you suppose to provide Hope and Change if you don’t control it? You can only have Hope and Change by fiat for so long. Then you have to centrally plan it. I mean, “Yes we did” is a really kick ass bumper sticker but it’s starting lose its luster.

        1. I wonder what rearranging the letters in “hope and change” can produce?

          Chop, hang Deena.

          1. Well, there’s Cheapen Dang Ho. And Change Had Nope.

            Peach Gonad Hen.
            Cheap Henna God.
            Cad Hang Hep One.
            Hangman Echoed.
            Adman Hence Hog.
            Conman Hag Heed.

            And so on.

          2. “I wonder what rearranging the letters in “hope and change” can produce?”

            One chap hanged.

            Hang Chad. Pee on.

            Change had? Nope.

  9. Timothy Geithner looking at Fannie and Freddie –

    It’s OK. I can fix this. Quick, hand me another trillion.

    1. My old man has this ULTIMATE set of tools. I can fix this!!!

      1. Take care of THIS!

  10. Let’s see, we’ve nationalized mortgage banking, student loans, two of the three domestic car companies, health insurance (well, started to). Am I missing anything?

    But there’s no socialism to be seen here! Absolutely not! Just move along. And put that damn cell phone away.

    1. Energy is still in their sights.

    2. Next up is the offshore drilling industry. Mexico and China have never had a Deepwater Horizons type spill, you know.

    3. You left out the nationalization of Stupidity. Bah.

    4. GM and Chrysler weren’t nationalized, they were corporativized.

    5. When I read his comments, I thought, “Dang, Volcker gets it. I may disagree with him about a lot of things, but he gets it.” And when the former Fed chairman starts pointing out how much we’ve nationalized, it should get hard to ignore the elephant (or donkey) in the room.

    6. Seriously…where’s all of our socialist friends ’round these parts to tell us how it was a good idea to nationalise these segments of the economy?

  11. But people need houses! With white picket fences and home theaters! If not the Government, where will they get their subsidies? Why should the people have to live in a van down by the river?!?

  12. Not much exists without the government running it. I don’t think that’s what we want.

    I’m sure Volcker said that same thing in a meeting with Obama and Emmanuel present. Thus the reason Volcker’s been marginalized.

  13. Fannie and Freddie’s post-accounting scandal behavior was a big push over the cliff for the economy.

  14. How to fix the national debt: First, get 45 trillion dollars.

  15. This makes me miss joe. I wish he were here to tell us that the GSE’s didn’t actually make loans, they only bought bonds, and therefore had nothing to do with the housing bubble.

    1. Missing joe is like missing salmonella.

  16. “Not much exists without the government running it. I don’t think that’s what we want.”

    Actually Paul, that is exactly what the Obama administration wants. Christ, even after a year of this fucking disaster of an administration, people still refuse to admit how much of an out-of-control statist Obama is.

    1. I don’t think they care. They think he’s a good guy and kind of brilliant and is therefore doing the right things.

  17. Despite their tendency to defend the programs, aren’t F & F the sort of private-public corporation as government monstrosities that should in theory make Progressives wet the bed?

  18. Volcker must be crazy.

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