Can’t Have Your Cake and Eat it Too

The Freddie Mac and Fannie Mae fiasco has pretty well dominated real estate news this week. That these venerable institutions would fall was evidently no secret to those who knew the inner workings. Robert Higgs over at the Independent Institute has an interesting take on it, well worth reading in my opinion. A slightly different angle on it is expounded by Russ Roberts over at Cafe Hayek. For those concerned with buying and selling real estate the long term effects of this bail out are still unknown. The short term effect has been to cause lenders to reduce interest rates. This is probably because they feel confident that the vast mass of American taxpayers will be willing to shore up and straighten out the unworkable mess that Fannie and Freddy have become. Of course this is the same government that created the mess in the first place stepping in to make all things right, so a modicum of caution is enjoined on those rejoicing lest overwhelming dismay ensue.