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Fascist Housing: Making It Official

Written by Gary North on June 4, 2013

Housing policy in the United States has copied the fascist model for housing ever since 1934, when the FSLIC was set up: government-guaranteed savings and loans. This was part of the well-named National Housing Act. It subsidized middle-class housing by guaranteeing Federal Savings and Loans against “bank runs.”

The essence of economic fascism is simple: a government-business alliance. There were two versions: the European version and the American version. The European version put the government in charge, which the private sector paid for in lost freedom. The government ran the show. The private sector took the blame for shortages. The American version put the investors in charge, with the taxpayers on the hook for major losses.

Housing fascism keeps notching up in the United States. In 1937, it was extended to direct loans from the government for poor people, meaning the comparatively few poor people who were able to get to the front of the long line for subsidies. It was extended again in 1949. In the mid-1980s, the savings and loan bank runs pulled the trigger on the government’s loan guarantees. The taxpayers ponied up to bail out the busted S&Ls. Then came September 2008, when Treasury Secretary Hank Paulson unilaterally nationalized Fannie Mae and Freddie Mac on his own authority. He simply went in front of the TV cameras and announced it. He invented a new word for nationalization: “conservatorship.” Congress said nothing.

Now the Senate is putting together a bipartisan bill to make it official. The government will set up the Federal Mortgage Insurance Corporation, which sounds like it is part of the private sector. The financial media are aghast: there is no way to turn FMIC into a clever acronym, like Fannie Mae or Freddie Mac. Mickey Finn is close to the real meaning, but I don’t think it will catch on.”The Federal Mickey” is what it is, but that’s too close for comfort.

The details are not being released until the lobbyists have hammered out a compromise. It will guarantee the mortgage market. It will continue to guarantee trillions of dollars worth of packaged mortgages, which the Federal Reserve will continue to buy with newly created counterfeit money. This is what the voters want. This is what they will get.

This is fascism. It has been fascism ever since 1934. It removes the threat of free market negative feedback, thereby removing risk from both the lenders and the borrowers. It guarantees a new housing bubble. But American housing has been in a bubble since 1934. It is the basis of “the American dream.”

Fascism: it’s a wonderful life. “Merry Christmas, Mr. Potter. And Happy New Year, too.”

Continue Reading on www.bloomberg.com

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4 thoughts on “Fascist Housing: Making It Official

  1. "Ultimately, the problem with our markets today is that what we call "MONEY" has no real value so everybody and their mother have no problem playing multi billion dollar games with derivatives and stocks and bonds…everything. Even houses. People go to a bank and borrow this funny money that the bank creates out of thin air and VOILA you have a house. If money had REAL value loans would be hard to get because the bank would not part so easily with it and people would not want to give any of it away in the form of interest payments. it is phoney money that has fueled the boom of the last 40 years."–Bix Weir, Friday Road Trip, 5/23/2013

    Please read this until you understand it. It's the most concise explanation of what happens in a pure fiat (funny money) regime I've read. It's really, really hard to implement fascism with sound money. Sound money MUST be replaced by government script for the fascist model to work. Hence, our current system.

  2. A side result to "fascist housing" is that eventually we end up with undesirable people in our neighborhoods running them down. So basically it is said. You can put white trash in a brand new SUV and a brand new house, but they are still white trash.
    And come on guys quit being so feminine and weak. We all know these people and have them in our neighborhoods. They don't cut their grass, but if they do they scalp it and chop up the garbage with it. They have a car in the driveway with a flat tire, the house itself is dirty, they are loud and disrespectful of their neighbors assuming that everyone enjoys loud football parties, wet tee shirt parties and huge dogs that scat in everyone yards.

  3. Looks like they've decided to follow the CANADIAN MODEL 🙂

  4. ex ghetto nurse says:

    Living in three 'inner cities' the trash you mention is dwarfed by the vermin we've seen. Better to let the gov. go bankrupt financing homeboy's and home girl's roach motels. Far enough away from where those who self seg and vote with their feet, wallets and marketable skills.