Fannie and Freddie

It will come as a shock to nobody to discover that books about the causes and consequences of the Financial Crisis of 2007-2008 keep being published.  It will come as a shock to none of my students that I keep assigning such books.  (I like assigning books.)  The latest entry in the category “Assigned Books on the Financial Crisis” is:

Acharya, Richardson, Nieuweburgh and White, Guaranteed to Fail: Fannie Mae, Freddie Mac and the Debacle of Mortgage Finance

Sadly, I suspect very few of the students in the class to which I assigned this book will actually read all the way through it.  Or another way of putting it:  Not a good Christmas Gift.

I thought the book was decent enough—it is a great reference book.  If you want a number, it’s in this book.  Endless detail.  Endless.  Combine endless detail with 181 pages of text and you get one very dense book. 

The thesis:  Well, the subtitle gives it away.  Blaming Fannie and Freddie was very popular with conservatives in 2008.  I was terribly puzzled by the rush to blame these organizations.  Sure, they are really absurd organizations and they most definitely should be abolished, but that doesn’t mean they necessarily played a big role in causing the crisis.  Finally, we are getting the first research on the matter which begins to document the case that the organizations were a part of the problem.  (Note: a part of the problem—not the whole problem.)  It’s nice when there is evidence to support one’s theories, so those wanting to blame Fannie and Freddie can at last breathe easy.

My biggest surprise about this book came in a Tweet from one of my students:  she sent me this link.  Who knew that the authors of a technical thing like this book are cool enough to appear on the show epitomizing Cool Faux News?