Wednesday, September 10, 2008

A New Economics Fable

Maybe some of you have read Russ Robert's Fable of Free Trade and Protectionism. Well, he has posted a new fable at Cafe Hayek: The Fable of Fannie and Freddie.
Once upon a time, Fannie and Freddie were partners in a business. Well, it wasn’t exactly a business. It was almost a charity. Not quite. It was sort of a government agency. Or maybe it was all three together. When Fannie and Freddie talked to investors, they acted like a business. When they talked to the government regulators, they acted like a government agency.

And when they talked to the American people, they acted like a charity. A charity whose goal was to help more people own a home.

Who could be against that?

But it’s hard to be three things all at the same time [...]

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