Opinion pieces and speeches by EPI staff and associates.

[ THIS PIECE ORIGINALLY APPEARED IN CNBC GUEST BLOG ON JULY 11, 2008. ]

What Fannie and Freddie are telling us

By Jared Bernstein

When you’re in the middle of a maelstrom, it’s hard to step back for a teaching moment.

The prospect of Fannie Mae and Freddie Mac failing is almost too unsettling to contemplate. As one investor told the New York Times, “If people lose faith in Fannie and Freddie, then the whole system freezes up, and nobody can buy a house, and the entire housing market can crash.”

We’re talking about a pair of institutions that hold or guarantee more than half of the nation’s mortgages.

Read the rest of this piece here.

Jared Bernstein is senior economist at the Economic Policy Institute in Washington, D.C.

[ POSTED TO VIEWPOINTS ON JULY 11, 2008. ]