They needed a buyer for their garbage loans. The USG provided that buyer, the ultimate "greater fool", in the form of the government-sponsored enterprises, Fannie and Freddie. Without that backstop, the mortgage-lending cowboys would have crashed long before they actually did and without the far-reaching consequences.
A healthy market would have kept the cowboys in check. But a healthy market was contrary to Progressive policy.
“They needed a buyer for their garbage loans. The USG provided that buyer, the ultimate “greater fool”, in the form of the government-sponsored enterprises, Fannie and Freddie. Without that backstop, the mortgage-lending cowboys would have crashed long before they actually did and without the far-reaching consequences. “
You don’t know what you are talking about. Fanny and Freddie dealt in low yield conforming loans and they were having their lunch eaten by private sector rivals who bundled and sold high yield paper throughout the financial world. Fanny and Freddy actually lost market share during the bubble.
And you evidently are blissfully unaware that Fanny and Freddy were both listed on the stock exchange. They had been spun off from the government back in 1970. There was no legal requirement for the American taxpayer to backstop their businesses. That great free market President Dubya decided to socialize the losses of these two investor owned GSEs.