Help is on the way.

November 28, 2008

The Washington Post today praises President-Elect Obama’s selection of Larry Summers to be head of the National Economic Council based on Summers’ criticisms of Fannie Mae and Freddie Mac. Summers accurately noted that the gains of these “government-sponsored enterprises” were privatized while their losses were socialized. The Post goes on to say, “Mr. Summers is clearly right that the hybrid public-private model no longer makes sense – a point that his future boss, President-elect Barack Obama has also embraced.

Ummm, “no longer” makes sense? When did that model make sense – right up to the second before it inevitably put the taxpayers on the hook for $5,000,000,000,000?

I’m happy that the “public-private model” of Fannie and Freddie is coming under attack. I hope that all such public-private models get the same scrutiny – before we find out that they, too, “no longer” make sense.


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