Despite assurances that the takeover of Fannie Mae and Freddie Mac would be temporary, the giant mortgage companies will most likely never fully return to private hands, lawmakers and company executives are beginning to quietly acknowledge.At least one can make an argument that nationalizing entities that were previously government owned entities is one thing, but given that taxpayer ownership of financial firms is becoming the norm rather than the exception, I am just not that surprised.
The possibility that these companies — which together touch over half of all mortgages in the United States — could remain under tight government control is shaping the broader debate over the future of the financial industry. The worry is that if the government cannot or will not extricate itself from Fannie and Freddie, it will face similar problems should it eventually nationalize some large banks.
For all those people arguing that we should nationalize some or all the banks, keep this little bit of news in your head. Once in, it is going to be hard to get out.