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Thornton Hall

The Revolution Will Be Kuhnian.

Liberal Argument For Frannie

As legislation regarding the fate of Freddie Mac and Fannie Mae ("Frannie") bounces around in Congress, the liberal blogosphere has gone into action with a variety of arguments against the GSEs and government encouragement of home ownership generally.

The argument that the existence of non-conforming 30 year jumbo mortgages--loans not backed by Frannie because the total loan amount is too large--shows that the standard 30 year mortgage would exist absent government backing has always struck me as obviously specious. Banks might be very willing to make a 30 year loan on a 10 million dollar house but not on a $100k one.

Mike Konczal goes through this point and others making the liberal case for Frannie

Symptom: self-harming behavior. Cause: AMA.

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