September 10th, 2008

On Freddie and Fannie.

What's lost in all the handwringing over Freddie Mac and Fannie Mae was that from the start they were entities created for the express political purpose of manipulating the housing market. They exist in order to promote what later became called "the ownership society", as a way to fight socialism. Putting more people into houses as owners means more people who have a stake in the defense of private property and of capitalism. Arguably, this was quite effective.

However, it cost money. Now, the bill is coming due. Who pays the bill--and how they pay it--those are the real issues, not why and how the money was spent. They spent the money fighting socialism.

It's therefore rather ironic that rather than see Freddie and Fannie fail, a self-described conservative government has decided ideology be damned. The government must take these outfits over lest they collapse and take down the housing market and the credit market with them, rather than let the market sort everything out, as their ideology would have it.

Of course they're trying very hard to obfuscate all this, rather than have people ask the awkward question of why the fight against socialism, and those who gained from it, should be bailed out by socialism.

Do I think we should prevent a collapse? Yes. Spending some money to engineer a graceful outcome and avoid a chaotic crash is worthwhile. Do I think the taxpayer should be the one to pay for that graceful outcome? No.

We'll see who ends up paying the bill.

Frequent flyer miles.

I need to do something with all these miles--something over 275,000 of them, unfortunately scattered over four different airline programs--before the airlines finish inflating them into worthlessness.

Maybe I'll take a couple of long trips. Or maybe I'll find something salable I can convert them into.