Remember way back in 2008, when the federal government had to rescue the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, both of which had ruined themselves by making too many mortgage loans during the inflation phase of the housing bubble? Remember how, way back in 2008, there were campaign promises that the lax lending would be restricted, in order to prevent a recurrence of the implosion?
Guess what. That’s right:
Seeking to stabilize the foundering housing market, President Obama is offering a plan to help as many as nine million families refinance their mortgages or avoid foreclosure, according to a summary released by the White House on Wednesday morning.
Included in the package is a move to ease some restrictions on Fannie Mae and Freddie Mac — which guarantee millions of home loans. Generally Fannie and Freddie cannot guarantee refinancing on mortgages valued at more than 80 percent of the home’s worth.
But the president’s plan would remove that restriction on mortgages the lending giants already own or guarantee. [The New York Times, February 18, 2009]
Dmitry Orlov is right: The USA’s ultra-decrepit overclass is completely out of real answers. All it can do is throw new capitalist boondoggles on top of the craters left by the collapse of the old ones.
And, as they do this, they are displaying a truly Orwellian capacity for forgetting yesterday’s ancient history.
Meanwhile, the cravenness and market-totalitarian stupidity of the Obama Administration, which starts right where the buck supposedly stops, is yet more solid proof that, as the great Noam Chomsky says, we live in a one-party state. There is the Business Party, which has two wings, called “Republicans” and “Democrats.”
Batten down the hatches, folks. The worst is yet to come, and the flood will be very deep…