Misuse of words by journalists lead to misunderstanding of the Fan-Fred situation by Maria Folsom
(libertarian)
Thursday, September 11, 2008
Fannie Mae and Freddie Mac have always been hybrids. They were created as chimeric creatures, offering public profit with private risk. They are about 70% "owned" by Big Government. So how can you "take over" something that you already own? And why would any journalist use that phrase?
Here's why. "Take over" implies change. It suggests that Big Government is here to save the day. It hints that Government never really "owned" Fannie and Freddie at all, and therefore is not responsible for Fan and Fred's financial collapse. Have no fear. Government will now "own" the unlucky twins and will come to our rescue.
This is not a picky point. Words matter. This "conservatorship" of Fan and Fred is anything but a take-over. Government created this monster and nourished it regularly. With this bailout, Government is merely consuming the remaining corpse of a dying beast. This bailout is neither a solution nor a take-over.
A true "take-over" would occur if some private bank offered to buy out the remains of the insolvent twins. (A bad decision, albeit, but just an example.) Only then could the words really imply some change or remedy.
Be not fooled by words that obscure the true situation. There is no Take-Over.
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do not represent the views of Nolan Chart, LLC or its affiliates.
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