Fannie Mae and Freddie Mac didn’t in any sense “cause” the financial panic. They did, however, end up costing the taxpayer a nice chunk of change. Jordan Fabian reports that Chris Dodd agrees they should be reformed and says he only left them out of his big regulatory bill because he thought it would be biting off more than he could chew. He promises a second bill dealing with this will come later.
Annie Lowrey offers as helpful context a Treasury Department memo framing seven questions they’re interested in input about. For my part, as best I can tell the legitimate purpose behind Fannie and Freddie was to subsidize homeownership, but it doesn’t actually make policy sense to subsidize homeownership. You’re looking at a fundamentally bad idea that’s also implemented in a bad way.