Paulson's pluck

摘要

Hank Paulson has earned himself a place in the record books as the Republican treasury secretary who engineered the biggest nationalisation in modern American history. It may be called a "conservatorship", but the seizure of Fannie Mae and Freddie Mac is, in effect, a government takeover. Whether this boldness improves the outlook for America's economy depends on the answer to two big questions. First, will government control of Fannie and Freddie help solve America's housing mess? Second, would stability in the housing market be enough to turn around the economy?rnThe answer to the first question is a qualified yes. It is hard to overstate Fan-nie's and Freddie's importance in the housing market, both as holders or guarantors of half of America's mortgages, and as lenders who have stepped in as private finance has collapsed. Over the past year they increased their lending by about $600 billion, or 12%, and this year they have financed four out of five mortgages. Without this cushion America's housing bust would be far worse.