The big banks have at least superficially paid back the money the government gave them; General Motors and Chrysler are out of bankruptcy; but Fannie and Freddie are still in conservatorship. Even more significant, most of the mortgage market in this country is now supported by government agencies, more so that it was before the financial crisis. The former governor of the Bank of England, Mervyn King, told me this: “Most countries have socialized health care and a free market for mortgages. You in the United States do exactly the opposite.”
Americans of all political stripes have long supported the idea that residents deserve to own a home. This is reflected in government policy, as Bethany McLean argues, where politicians suggest they want Fannie Mae and Freddie Mac out of the mortgage business yet let them become a more and more integral part of the process.
It would be interesting to know how the money poured into the GSEs might be used elsewhere to support other things Americans like to have.