Wednesday, April 30, 2014

Politics, banks, and housing

Another fascinating account of how politics interacts with lobbying.  The GSE's are the government-sponsored enterprises set up in the 1930's to help finance home ownership.  They failed in the financial crisis and were taken over and recapitalized by the government (given public dollars to cover the losses and keep them going).  Now Congress is trying to decide what to do.  One one hand, the American Dream is tied up with home ownership.  So consumers have a big stake in making sure homeownership is affordable.  The banks want fees and profits.  And Congress is stymied.  Read the article.  It is short.

GSE Reform Dead for Now | naked capitalism

1 comment:

  1. "And Fannie and Freddie are profitable right now, so there’s no impetus to make changes." This quote really says it all. Our political system is not driven by the wishes of constituents but by those greenbacks. It is money that is inhibiting regulatory reforms across the board. You can throw a little lack of bipartisanship in there too, if you like.