Mises Institute Senior Fellow was featured last month at the AEI’s symposium on Fannie Mae and Freddie Mac. Alex speaks throughout the panel discussion, which can be viewed here.
AEI’s even summary:
On March 23, AEI’s Howard Husock hosted experts to examine the role of Fannie Mae and Freddie Mac—enterprises that guarantee roughly 70 percent of US mortgages and are central to housing finance. Panelists emphasized that this uniquely American system concentrates risk within government-controlled entities, exposing markets to political influence and contributing to distortions in housing prices. Speakers traced the evolution of the government-sponsored enterprises (GSEs) from hybrid public-private institutions to entities effectively controlled by the federal government under conservatorship since the 2008 financial crisis. A central concern is the GSEs’ implicit federal guarantee—unconditional and practically free—allowing public risk to generate private or quasi-private gains.
The panel outlined three main paths forward: full government ownership, privatization with explicit payment for guarantees and stronger capital requirements, or continued conservatorship under the Federal Housing Finance Agency. Panelists broadly favored a smaller, more disciplined model—treating the GSEs more like large banks—and agreed on the need to shrink their footprint by limiting the size of purchasable mortgages, an incremental reform within regulatory authority. They added that technological improvements to mortgage processes may enhance efficiency. Still, in the absence of sustained political pressure, conservatorship may persist, leaving fundamental structural issues unresolved.
