Recent events have entrenched Fannie and Freddie still deeper into the fabric of U.S. policy and politics, cementing them as de facto federal agencies in ways we think quite difficult ever to dislodge de jure. This may be as some might like, but this new form of limbo means that the GSEs will do political will and achieve policy objectives in a structure premised on an effective guarantee that will only count if it isn’t really essential.
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