No, but we’ve taken big steps in that direction. For example, the government owns a large insurance company (AIG). More importantly, it has nationalized 95% of the single largest component of the financial sector: home mortgages.
From “Recent Developments in Mortgage Finance“, John Krainer, Federal Reserve Bank of San Francisco Economic Letter, 26 October 2009. Federal Housing Administration loans are included here in the Ginnie Mae share.
The Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and Government National Mortgage Association, and Federal Housing Administration are all owned by the US government. The 12 Federal Home Loan Banks make loans only to financial institutions, hence are not included in this graph (they have not yet gone bust and nationalized, see this for details).The government will pump hundreds of billions into them to rebuild capital lost from defaulted mortgages, to keep the housing game going. This and other programs — like the First Time Homebuyer Tax Credit (almost certain to be extended in some form) — represent the government tossing our furniture into the fire. Anything to keep the rickety debt-ridden engine of American finance running.
Question for the day: if asked, would most Americans approve? Is this democracy in action, our representatives carrying out our wishes? Or will we see posters at the next tea parties “Keep the government’s hands off our mortgages?“
For more information from the FM site
To read other articles about these things, see the FM reference page on the right side menu bar. Of esp relevance to this topic:
- Posts about Financial crisis – what’s happening? how will this end? – Esp section 8 about solutions
- Good news about America, a collection of articles!
About nationalizing the financial sector:
- Slow steps to nationalizing the US financial sector, 7 April 2008
- The last opportunity for effective action before disaster strikes, 3 October 2008 — About the road not taken.
- A free lesson from Russia: how to manage a banking crisis, 6 February 2009
About the housing crisis:
- Diagnosing the eagle, chapter I — the housing bust, 6 December 2007
- A vital but widely misunderstood aspect of our financial crisis, 18 September 2008 — Too many homes.
- Destroying houses in order to boost home prices, 16 December 2008
- The housing crisis allows America to look in the mirror. What do we see?, 9 March 2009
- Another step to solving the housing crisis: downsize cities by destroying neighborhoods, 2 April 2009
About the bank bailout:
Slowly a few voices are raised about the pending theft of taxpayer money, 21 September 2008 The Paulson Plan will buy assets cheap, just as all good cons offer easy money to the marks, 30 September 2008 A reminder – the TARP program is just theft, 24 November 2008 A solution to our financial problems: steal wealth from other nations, 2 February 2009 Stand by for action – more theft of our money being planned in Washington, 4 February 2009 Update: yes, the Paulson Plan was just theft, 14 February 2009 Now is the time for America to get angry, 24 March 2009 America on its way from superpower to banana republic, 28 March 2009 The best way to rob us is to own a bank, 10 April 2009 Bush’s bailout plan is now Obama’s. His quiet eloquence guides the sheep into the pen, 30 March 2009 “The Greatest Swindle Ever Sold”, by Andy Kroll in The Nation, 28 May 2009 More about “Government Sachs” (they own America; we just live here), 31 July 2009
Originally published at Fabius Maximus and reproduced here with the author’s permission.