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Arnold Kling had me cracking up a few days ago:

  In the House, Mr. Frank, the chairman of the House Financial Services Committee, criticized the administration’s attempt to shrink the companies. He staunchly defended the companies’ ability to channel some of their profits from conventional mortgage financing to subsidize the construction of affordable rental housing and lower borrowing costs for low-income home buyers.

I’m sure that Congressman Frank is aware that we have an agency, called the Federal Housing Administration (FHA), that serves the function of providing subsidized loans to borrowers who cannot obtain mortgages in the private market. We have other programs that subsidize the construction of homes.

In the United States, we have a huge inventory of unoccupied homes. We have trillions of dollars of mortgage debt. We need government-sponsored enterprises to encourage more homebuilding and more debt about as much as we need a government enterprise to stimulate teenagers to want more sex.

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