On Obama's proposal to wind down Fannie Mae and Freddic Mac...

For all the talk (particularly those pushed by GOP and Tea Party idiots like Sarah Palin), I must admit that I'm pleasantly surprised by the latest Obama proposal on what to do with Fannie Mae and Freddic Mac, given their role in accentuating the mortgage crisis since 2008.

I have always found the idea of Fannie/Freddie odd. Of all the talks on how "capitalistic" America, Fannie/Freddic are anything but. I have to put the word capitalistic in quotes, because I don't find it capitalistic at all. Afterall, if the federal government is provide quasi-underwriting guarantee of 9 in 10 mortgages written in this country, the government is effectively and essentially underwriting everything in the mortgage market. Sure, without Fannie/Freddie, we might never have 30-year fixed mortgage (which is unheard of and is an envy in other countries in the world). But the conflict of interests in these two quasi-government entities are too huge to ignore. They were made a private entity, yet they have government guarantee; hence, when the risks are effectively transferred to the government (taxpayers), what is there to prevent Fannie/Freddie to make poor (more like very bad) decisions to chase the market, without concerns of risk factors?

It's long overdue that something has to be done about the situation. But no one politician from any party has the guts to come out and say, the government should not be in this business, because no one wants to tell their voters and constituents that the government does not promote property ownership. No one is willing to tell the idiotic voters that, if they can't afford to afford conventional mortgage payment, they should not own a home, because home ownership is not a birthright; it's something that has to be earned. If anyone can't afford it, go and be a renter. As simple as that.

So, for Obama to now come out with a proposal to effectively say that, there are cases there ownership does not make sense to some people and they should stay as renters. And that, the taxpayer guarantee to the mortgage market is unsustainable and untenable, it's a breath of fresh air. It's only then, that we acknowledge the gist of the problem, that we can begin the process of fixing what is so broken in the system in America.

Sure, mortgage rate may well go up, mortgage underwriting rules are going to get tightened, downpayment is going to go up too. But such should have always been the norm, which had gone out of the window because the markets were so out of whack under the Greenspan fed. I'd rather pay the price now, and have the country be on a healthier path of existence, than to kick all these problems down the road, and let the future generations (my kids' generations) to handle it.

Now, if only the Obama's own Dem constituents like the unions would just shut up, and do something useful, for a change. So too will we have to see if the GOP will turn around and be the obstructionist to block the Obama proposal to wind down Fannie/Freddie in 5-7 years, for the sake of being obstructionists.