A Bit of Homer Simpson Economics

Nationalization is a case of mistaking the cause of our problems for their cure.

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From today's Wall Street Journal:

The best outcome for the administration is that Fannie and Freddie manage to issue new stock and the balance-sheet fears subside. But if capital raises don't get done at the right size, the administration might have to do something drastic like take over Fannie and Freddie.

This list is starting to get pretty long. Nationalize Freddie and Fannie. Nationalize Citigroup. Nationalize General Motors and Ford. Nationalize the airlines. Nationalize health insurance. Nationalize energy. Nationalize homeowners.

This is starting to remind me of that great line from The Simpsons: "Beer, the cause of—and the solution to—all of life's problems." Government, the cause of—and the solution to—all of life's problems. What's really amazing here is that this sudden love of bigger and more intrusive government, at least by the media and Wall Street, comes at the same time both the White House and Congress are held in record low esteem.

Fannie Mae
Freddie Mac

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