How the Left Wing Created the Credit Crisis. Yes, Indeed!
James Grant is a knowledgeable student of the credit system, but today he goes off the rails, blaming the left wing for the credit crisis. Here is the most striking passage:
“By and by, the lefties carried the day. They got their government-controlled money (the Federal Reserve opened for business in 1914), and their government-directed credit (Fannie Mae and the Federal Home Loan Banks were creatures of Great Depression No. 2; Freddie Mac came along in 1970). In 1971, they got their pure paper dollar. So today, the Fed can print all the dollars it deems expedient and the unwell federal mortgage giants, Fannie Mae and Freddie Mac, combine for $1.5 trillion in on-balance sheet mortgage assets and dominate the business of mortgage origination (in the fourth quarter of last year, private lenders garnered all of a 19% market share).”
Grant, James. 2008. “Why No Outrage?” Wall Street Journal (19 July): p. W 1.
Would a publically owned agency have behaved the same way, lowering standards to increase share costs?