If you've been following the Republican debates, you probably have become acutely aware of two things. First, that references to Ronald Reagan have become considerably more precarious things then they once were, and second, that Fannie Mae and Freddie Mac are the root of all evil. Who was the moron that decided that we should encourage
more people to own homes? What socialist, anti-Republican twit would come up with such a thing?
Let us hearken back to yesteryear, or in this case, 2008, when I hear tell people were still hearkening back to 2004:
Remember the ownership society? President George W. Bush championed the concept when he was running for re-election in 2004, envisioning a world in which every American family owned a house and a stock portfolio, and government stayed out of the way of the American Dream. [...]
Such a country would be more stable, Bush argued, and more prosperous. "America is a stronger country every single time a family moves into a home of their own," he said in October 2004. To achieve his vision, Bush pushed new policies encouraging homeownership, like the "zero-down-payment initiative," which was much as it sounds—a government-sponsored program that allowed people to get mortgages without a down payment. More exotic mortgages followed, including ones with no monthly payments for the first two years. Other mortgages required no documentation other than the say-so of the borrower. Absurd though these all were, they paled in comparison to the financial innovations that grew out of the mortgages—derivatives built on other derivatives, packaged and repackaged until no one could identify what they contained and how much they were, in fact, worth.
As interesting as these historical texts are, we have to remember that they are from the before-times, when conservatism meant ... well, the same things as now, really, but nobody is allowed to point that out. Let's just agree that Fannie and Freddie were rogue agents—the very names sound suspicious, a little too American not to be a pair of Soviet-era spies, if you ask me—and that we have learned the prime lesson here, which is not that banks should not reduce the entire American real estate market to a set of ever-more-complicated, ever-more-dangerous gambling bets among themselves, but that people really ought not own homes anymore. That was a mistake.
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