Thoughts on Fannie Mae and Freddie Mac

A few readers have e-mailed me wondering what my take on the current situation is. I guess because everyone else in the economics blogosphere has weighed in (see here, here, here, here, here, here, here, here, etc. etc. etc.)

I will leave the ongoing coverage of the issue to my friend and colleague Justin Pritchard, the About.com Banking Guide.

I do have one observation, though, after reading far too many newspaper editorials and blog entries by economists:

Economists are seeing exactly what they want to see in the current situation.

• Right-leaning economists are seeing this failure as being due to excessive and bad government regulation.
• Left-leaning economists are seeing this as a market failure.
• Right-leaning economists are seeing this as stemming from governments using lending as a form of wealth transfer from rich to poor.
• Left-leaning economists are seeing the upcoming bailouts as a form of corporate welfare.
• Environmental economists are talking about pollution from coal-fired powerplants in Tennessee.

People holding the view that macroeconomics is nothing but political ideology masquerading as a science must be feeling pretty smug today.