Fannie and Freddie Are Just Government Agencies. They’re Likely to Stay that Way.
Last Week, the US Supreme Court confirmed that Fannie Mae and Freddie Mac are essentially government-owned corporations, and are likely to stay that way.
The Court didn’t say this in so many words, but the ruling (namely, Collins v. Yellen) helps to end the fiction that Fannie and Freddie are private organizations only temporarily in a state of “conservatorship” under the control of the US government.
The ruling itself is seemingly extremely mundane. The Court ruled that the chief executive of the Federal Housing and Finance Agency (FHFA)—the government agency that effectively owns Fannie and Freddie—was for all practical purposes a government appointee like any other executive from a government agency. Moreover, the Court refused to intervene to end the federal government’s practice of “sweeping” funds from Fannie and Freddie and placing those funds in the US Treasury.
In effect, the rulings confirm what more cynical and savvy observers have long known: that Fannie and Freddie have always been quasi-government organizations, and are now full-on government bodies following the bailout and takeover of the two corporations which occurred in September 2008.
In other words, in practice, Fannie and Freddie are no more “private” entities than is Pemex, Mexico’s state-owned petroleum company.
As Lew Rockwell noted at the time of the government’s takeover in 2008:
This past week, the government announced that it would take Freddie Mac and
Article from Mises Wire