As I hopefully made clear in the post where I discussed Hugh S. Johnson, Time Magazine’s Man of the Year for 1933, point man for the New Deal, and admirer of Fascism, our government has had people in high office for many decades who held free markets in contempt, and thought they knew better how to do EVERYTHING.
The role of Fannie Mae–a New Deal agency–in the meltdown of 2008 has not been made as obvious to all concerned as it ought to have been, but it has not been fully ignored either. The short version is that when it failed, its backing of something on the order of a trillion dollars worth of mortgage-backed securities became suspect, the Credit Ratings Agencies downgraded their ratings, and sales dried up, forcing massive cashflow problems for very, very, very large banks, like Lehman Brothers.
What has been little remarked upon is that the government holds most of the mortgages in this country. The number is something like 80%. Ponder that. The Federal Government, either through direct ownership (you write a monthly check to Fannie Mae or Freddie Mac), or through final backing of securities consisting of packaged mortgages, has the title to 80% of the homes built in America. I am not talking public housing. I am not talking urban renewal projects. I am talking ordinary homes, “owned” by ordinary people. That is phenomenally important. We are using our own tax dollars to buy ourselves homes, and in the process ceding ownership to one monolithic entity, the Federal Government. This is a MASSIVE transfer of power, even if the consequencs of this are not obvious, yet.
Keynes was a Fascist. Mussollini himself said so, and presumably if anyone knew what Fascist economics looked like, the founder of Fascism did. Certainly, Keynes mentor–George Bernard Shaw–looked at Mussollini’s Italy, Hitler’s Germany, and Lenin’s Soviet Union with the same enthusiasm.
In “The End of Laissez-Faire”, which was not a well-thought out body of thought, but rather an erudite expression of the most cartoonish thinking, Keynes makes a case for what he called “semi-autonomous” bodies, which support the power of the State, but not in an obvious way. He used the example of the Bank of England, and if memory serves the London Port Authority. What he wanted were agencies ultimately accountable to no one, which could be subverted in a political direction he desired. Some years you make progress in the government; in other years, you have people doing things in the dark that nobody can see. Somewhere, every year, you are moving your plan for autocracy forward.
It is within this context that the patent Fannie Mae filed for a system to turn off power remotely to any home in the nation must be viewed. This is not the best link, but it will do for now.
What were they doing? They were thinking ahead to when the government actually flexed its muscle, and under the guise of preventing global warming exercised the right to determine how much power people could use, directly. They literally want a line into your home, such that they can kill your power whenever they choose to.
We are told the lie that the role of Fannie Mae is increasing home ownership. What has in fact happened is that, yes, people were approved for homes who would not otherwise have qualified. Those people, being unqualified, have in very large numbers defaulted on mortgages that never should have been written in the first place, at ENORMOUS cost to American taxpayers.
To be clear, what happened was that local banks wrote mortgages they NEVER would have kept for themselves, but which they wrote simply because Fannnie Mae buys everything. Even though everything they did put the American taxpayers on the hook, nothing they did was regulated, at the insistence of Democrats, with Barney Frank and Chris Dodd being the most egregious defenders of this terrible system.
I will note as well in conclusion that the man who wrote the book “A New Deal” was an open admirer of Soviet Communism. He went there, liked what he saw, and wrote “why should they have all the fun”. By fun, he seems to have had in mind mass murder:
Best of all, the new regime would have the clearest idea of what an economic system was for. The sixteen methods of becoming wealthy would be proscribed—by firing squad if necessary—ceasing to plague and disrupt the orderly process of production and distribution. Money would no longer be an end, but would be thrust back where it belongs as a labor-saving means. The whole vicious pecuniary complex would collapse as it has in Russia. Money making as a career would no more occur to a respectable young man than burglary, forgery or embezzlement. “Everyone,” says Keynes, “will work for the community and, if he does his duty, the community will uphold him.” Money making and money accumulating cannot enter into the life calculations of a rational man in Russia. A society of which this is even partially true is a tremendous innovation
We underestimate the extent to which our order has ALREADY been subverted at our peril.