Fannie, Freddie Woes Predicted Long Ago

Government finance scholar Allen Schick, long of Brookings and the University of Maryland, is the employee of the day at the Department of IToldYouSo.

See page 3 of this old scanned-in Tax Foundation newsletter to see the prescient, plain-English piece he wrote in 1989 about the alarming debt of Fannie Mae, Freddie Mac and other so-called government-sponsored enterprises.

It’ll be no surprise to Prof. Schick to be reading almost 20 years later today’s articles about the debt-related woes of those unsound institutions:

Bloomberg: “Fannie, Freddie `Insolvent’ After Losses, Poole Says”

MarketWatch: “Fannie, Freddie shares slump for third day; Freddie Mac falls 23% as capital fears persist”

BusinessWeek: “Fannie, Freddie Resume Their Free Fall”

We can only hope that Congress and the Administration ignore the bailout pleas of the special-interest crowd, exemplified as usual by the Realtors’ chief economist Lawrence Yun: “Just given the size of the two companies, surely the government would not stand aside.”