Republican Home-­Owning

Robert Hockett

Community Development Publications and Reports, 2018, 29 pages

Abstract: Ten years after failing and being rescued by our federal government, our nation’s principal secondary market makers in home mortgage loans – Fannie Mae and Freddie Mac – remain in federal receivership. The proximate reason for this is that neither Republicans nor Democrats in Congress have been able to find consensus – interparty or intraparty consensus – on what should be done with our home mortgage GSEs post-crisis. The deeper reason is that public – that is to say, citizen – ownership of secondary market makers in home loans is in a certain sense ‘natural’ in any republic, such as our own, where both middle class standing and that standing’s primary indicator – home-owning – are deeply ingrained in the citizenry’s self-ascribed national identity. This truth is yet more compelling when home prices, as they are bound to do anywhere homes are the primary middle class asset, become what I call 'systemically significant' -- that is, when they become pervasive determinants both of other prices and of broader macroeconomic wellbeing. I conclude that the only sustainable future for Fannie and Freddie, not to say for the American middle class and our other GSEs (including our student loan GSEs), is to be found in their past. Fannie and Freddie should be forthrightly made citizen-owned once again as Fannie was through our home markets’ healthiest decades.

Keywords: household debt; family finances; household financial stability (search for similar items in EconPapers)
Date: 2018
Note: The St. Louis Fed Center for Household Financial Stability and the Private Debt Project hosted three "Tipping Points" Household Debt Research Symposia, 2016-2018. All three sessions were centered on the question of "tipping points" in regard to debt: How and when does household debt move from being wealth-building and productive for households and the economy to being wealth-depleting and destructive for both?; Conference Materials: https://fraser.stlouisfed.org/title/tipping-points-iii-debt-financed-homeownership-evolution-impact-future-9374/session-list-685757; Conference Executive Summary: https://fraser.stlouisfed.org/title/tipping-points-iii-debt-financed-homeownership-evolution-impact-future-9374/executive-summary-685758; Tipping Points Conference Series: https://fraser.stlouisfed.org/series/tipping-points-conference-series-9375
References: Add references at CitEc
Citations:

Downloads: (external link)
https://fraser.stlouisfed.org/title/tipping-points ... -home--owning-685765 Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:l00101:103219

Access Statistics for this article

More articles in Community Development Publications and Reports from Federal Reserve Bank of St. Louis Contact information at EDIRC.
Bibliographic data for series maintained by Scott St. Louis ().