by Richard Morrison
July 17, 2008

Washington, D.C., July 16, 2008—With the recent collapse of IndyMac bank in California and billions in losses at Fannie Mae and Freddie Mac piling on top of the existing subprime mortgage meltdown, financial managers are understandably jittery. The more opportunistic of them are now jockeying for more government money, subsidies and loan guarantees to prop up their failing investment decisions. Many of these “solutions,” however, and exactly want helped precipitate this crisis in the first place.

The policy experts of the Competitive Enterprise Institute have been tracking the credit crunch as it has spread to mortgage lenders, hedge funds, investment banks and government sponsored financial enterprises. They’ve also been weighing in on the proposed solutions, most of which have called for more rules and government power rather than elimination of the perverse incentives which helped cause the problems in the first place. CEI has long proposed phasing out government support for Fannie Mae and Freddie Mac.

Recent Publications

John Berlau on OpenMarket.org (7/14/08):

Hans Bader on OpenMarket.org (7/14/08): “Bigger Than Enron: Bailout for Fraud-Ridden Fannie Mae”

Hans Bader on OpenMarket.org (7/12/08):

“Massive Bank Failure While Congress Pays off Special Interests”

John Berlau and Eli Lehrer OnPoint (4/10/08):

“A Flawed Blueprint: A Free Market Analysis of the Treasury Department’s Financial Regulation Proposal”

Press release (4/3/08):

“Senators Investigate the Credit ‘Crisis’: Bear Stearns – JPMorgan Chase Deal under a Microscope”

Press release (3/31/08):

“CEI Opposes Broad New Powers for Federal Reserve: Praises Streamlining Effort Among Agencies”

Eli Lehrer and Matthew Glans OnPoint (1/6/08):

The Subprime Crisis in Historical Perspective

CEI study (1/9/07):

“The Liberal Congress Went to Market: A Bipartisan Policy Agenda for the 110th Congress”

Older Material

Fred L. Smith congressional testimony (6/15/00):

“On The Future Of The GSEs: Fannie Mae and Freddie Mac”

CEI is a non-profit, non-partisan public policy group dedicated to the principles of free enterprise and limited government. For more information about CEI, please visit our website at www.cei.org.