A duopsony built around rent-seeking
By Edward J. Pinto, Resident Fellow, American Enterprise Institute, and Norbert Michel, Director, Center for Data Analysis at The Heritage Foundation.
A recent Senate Banking Committee hearing explored “The Status of the Housing Finance System After Nine Years of Conservatorship.” The title pretty much says it all — Congress has done nothing substantive on housing finance reform in almost a full decade.
Given the spectacular failure of Fannie Mae and Freddie Mac that led to the 2008 financial crisis, the fact that these Government-Sponsored Enterprises (GSEs) remain in government conservatorship might seem surprising. After all, during the crisis, Fannie Mae and Freddie Mac transformed from political untouchables in housing finance to pariahs.
*This piece originally appeared on AEIdeas. To read click here.