Fannie Mae and Freddie Mac Need To Go

That’s what Paul Volker says in this interview. I don’t always find myself in agreement with Mr. Volker, but he’s surely got it right in his assessment of Fannie and Freddie. An excerpt:

“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.”

Mr. Volker’s ideas seem to be pretty popular with the president and Congress. Maybe this one will catch on.