Dwight M. Jaffee, professor of finance and real estate at the University of California, Berkeley, points out in The Wall Street Journal that “Today 90% of the $14 trillion in outstanding residential mortgages is controlled by the Federal Housing Administration (FHA), the Department of Veterans Affairs, or Fannie Mae and Freddie Mac – with the latter two under government conservatorship.”
Ninety percent? Wait a minute… Doesn’t every dizzy big-government leftist from Barack Obama to Paul Krugman tell us that “deregulation” of the housing sector caused our economic difficulties? The fact is that the housing finance market is one of the most regulated, not least regulated, sectors of the entire economy. Thanks to Professor Jaffee, we are reminded of the sheer scale of that regulation, as well as the left’s efforts that fed the housing bubble.
CFIF on Twitter
CFIF on YouTube