Housing Socialism in America

Over the weekend, the federal government announced that it was taking over mortgage lenders Fannie Mae and Freddie Mac, meaning that “effectively, the federal government has now become the nation’s mortgage lender.”

In other words, mortgage lending has become a form of socialist enterprise in the United States.

Who's to blame?

Obviously, it's the conservatives have taken their eye off the advance of American socialism.

Obsessed with preventing "socialized medicine" in the form of the federal government mandates for private health insurance, conservatives didn't notice that socialism had advanced so far in the housing business.

Originally founded as government agencies, Fannie Mae and Freddie Mac had become semi-public businesses that "guaranteed" up to 80% of private housing loans by buying those loans up and reselling them on the market. Thus, the federal government was providing the same kind of guarantee in housing that Hillary Clinton and other health reformers wanted to provide for health insurance.

Where were Harry and Louise of the famous anti-HillaryCare ads when this happened. From a conservative point of view of keeping government out of the economy as much as possible, "socialized housing" had arrived.

With the federal government's takeover of Fannie Mae and Freddie Mac, the government's role in the housing market has advanced even further. Of course, there was no realistic choice. If private housing markets were going to function adequately, the federal government had to step in and directly guarantee private mortgage lending. Otherwise, a large percentage of houses wouldn't be built, builders would go unemployed, and building supply companies like Lowe's would not be able to remain in their current businesses.

That's why the sphere of "socialism" has been expanded in the housing market. The private markets need some sort of principle of "social management" in order to function adequate.

And that's why the sphere of "socialism" needs to expand in health care. American health care is enormously expensive and does a poor job of promoting health. The only way that things are going to improve is if the federal government finally takes a role in guaranteeing private health insurance and then begins to re-organize the relationship between government and private health markets in a way that better serves the common good.