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deregulation
Privatizing Freddie and Fannie Is Another Trump Scheme to Make the Rich Richer
The basic story here is that in order to give donors in the financial industry still more money, Trump is planning to privatize a perfectly well-functioning public system for securitizing mortgages.
Aug 13, 2025
In Washington no bad idea stays dead long. Therefore it should not be surprising that U.S. President Donald Trump is planning to move forward with plans to privatize Fannie Mae and Freddie Mac, the mortgage giants that have been in government conservatorship for almost two decades.
As with many of the moves undertaken by Trump, it is not clear what problem this is meant to solve. For the period they have been in conservatorship, Fannie and Freddie have been securitizing mortgages at a low cost and have not faced any substantial management problems.
There is of course one problem that privatizing Fannie and Freddie would solve. This is yet one more way that the financial industry can run up some profits and high pay for top executives at the expense of the rest of us.
The Congressional Budget Office calculated that having private institutions, rather than Fannie and Freddie in their current form, would add roughly 20 basis points, 0.2% to the cost of securitizing mortgages. With around $1 trillion in mortgages being securitized each year, that comes to $2 billion annually. That is not huge in the context of the federal budget (0.03%), but it is four times the annual appropriation for the Corporation for Public Broadcasting that got Trump so upset.
Trump is giving a green light to his finance buddies to find every more creative ways to rip off businesses and ordinary people.
And in the case of privatizing Fannie and Freddie, we literally get nothing for it except a less efficient mechanism for securitizing mortgages. This is similar to the plans for privatizing Social Security. We have an extremely efficient public system, but many people in the Trump administration see the opportunity to make trillions of dollars in fees by turning it into a private system.
As with a privatized Social Security system, we would also be exposing ourselves to needless risk by privatizing Fannie and Freddie. The basic problem is that we would be allowing a private corporation to operate with a government guarantee against losses. This guarantee gives a private securitizer an enormous incentive to securitize bad mortgages in order to increase volume and make more profits. That was the story of the housing bubble and the subsequent collapse and financial crisis in 2008-09.
If a private securitizer is carefully regulated, it can limit the risk of reckless lending. But does anyone believe that the Trump administration is going to have careful regulation of the financial industry?
The basic story here is that in order to give donors in the financial industry still more money, Trump is planning to privatize a perfectly well-functioning public system for securitizing mortgages. This move will almost certainly increase the cost of mortgages for homebuyers, the only question is by how much. And it raises the risk for future financial crises and government bailouts.
Making the financial sector less efficient in order to hand money to contributors is very much front and center in the Trump administration. This is the same story with his decision to promote crypto currency, which is making Trump and his friends tens of billions of dollars; as opposed to letting the Federal Reserve Board issue a digital currency, which would save us tens of billions in bank and credit card fees.
The evisceration of the Consumer Financial Protection Bureau follows the same pattern. Trump is giving a green light to his finance buddies to find every more creative ways to rip off businesses and ordinary people.
That’s how we should understand the drive to privatize Fannie and Freddie. How could anyone oppose it?
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Trump and His GOP Risk Making Depressions Great Again
Today, every one of the fuse lines that set off past explosions is once again being laid by a Republican president and party that have abandoned any pretense of economic stewardship or patriotism.
Aug 01, 2025
Republicans may be fixing to crash the economy again—Republican presidents oversaw 10 of the last 11 recessions and the Republican Great Depression—and they’re doing it to satisfy the greed of the billionaires they serve.
Today, for example, is the day that some of U.S. President Donald Trump‘s worst tariffs are supposed to go into effect, and many folks on Wall Street are deciding where they want to hide when the ceiling starts falling in. The horrible jobs report just released hours ago highlights not only how bad things were in July, but they had to “revise downward by 285,000 jobs” previous reports; it looks like Trump’s people have been cooking the books.
The Financial Times is on it; they published an article this week titled, “The US Economy Is More Fragile Than It Appears.” It’s author, Tej Parikh, points out that our housing market is in trouble and starting to look like it did around the time of the Bush Housing Crash in 2008, that spending patterns are changing in alarming ways (my phrase, not his), and that both the labor and stock markets are vulnerable. The article is frankly alarming.
And former labor secretary Robert Reich titled his brilliant newsletter yesterday: “Be Warned: The Financial Bubble Will Soon Burst.” The former Clinton cabinet member writes:
The financial economy—stocks, bonds, and their derivatives—is in for a big reality check, and I think it will happen soon.
America has stared into this abyss before; three times, in fact. In the 1770s, a brutal financial crisis driven by colonial overextension, monopolistic control by the British East India Company, and political corruption helped spark the American Revolution. In the 1850s, it was wildcat banking, land speculation, and a collapse in trust that helped produce the Panic of 1857 and push the nation toward civil war. And in 1929, Republican deregulation, tax cuts for the rich, financial speculation, and an all-out assault on labor exploded into the Republican Great Depression.
Today, every one of the fuse lines that set off those explosions is once again being laid by a Republican president and party that have abandoned any pretense of economic stewardship or patriotism.
They are actively destabilizing the pillars of our economy, undermining our democracy, and gutting the social contract that held us together for nearly a century. And unless we act—forcefully, quickly, and collectively—we may soon experience a collapse that makes 2008 look like a speed bump.
The risk of a modern economic depression is not academic or merely theoretical. It’s also not fearmongering. It is real, it is avoidable, and it is being amplified by a political movement that openly disdains regulation, despises democracy, and seeks to roll back every gain the American middle class has made since FDR dragged this country out of the last Republican-created catastrophe.
We are now living under a Republican president whose party has:
- Repeatedly held the full faith and credit of the United States hostage in debt ceiling standoffs designed to force cruel cuts to programs that serve ordinary people;
- Demanded the Fed lower interest rates in a way that could push the nation into an inflationary spiral even as wages stagnate and housing becomes unaffordable for the bottom 90%;
- Pushed for the end of regulations on banks, fossil fuel companies, tech monopolies, and Wall Street speculators, even as their recklessness increases systemic risk;
- Championed massive tax cuts for billionaires and multinational corporations, ballooning the deficit while cutting benefits and raising taxes on working people;
- Enabled trade wars and supply chain disruptions while cutting support for green manufacturing and public investment;
- Promoted and made billions from crypto; and
- Perhaps most grotesquely, embraced open authoritarianism and white nationalism, eroding the rule of law and the very stability on which economic confidence depends.
Every one of these moves destabilizes the foundation of modern prosperity. And every one of them echoes the warning signs of past collapses. The mechanisms of economic catastrophe are not mysterious. We’ve seen them before.
Start with sovereign debt and fiscal dysfunction.
In 2023 and 2024, House Republicans repeatedly brought us to the brink of default just to slash food aid, gut Medicaid, and kill green jobs. Now, in 2025, they’re salivating over a new “Balanced Budget Amendment” that would make countercyclical investment during recessions illegal. That’s economic suicide.
When demand collapses, the government must spend to stabilize the system. That’s Econ 101. But the GOP wants a permanent austerity straitjacket. Why? Because billionaires don’t suffer in recessions: They buy everything at a discount and radically increase their own wealth when things rebound. For the morbidly rich, Republican recessions and depressions are “buying opportunities”: It’s class war, plain and simple.
Then there’s financial speculation and asset bubbles.
We’re once again living in an era of rampant unregulated financial engineering:- Crypto Ponzi schemes.
- AI stock frenzies.
- Private equity gutting essential companies and loading them with debt.
- Trillions of dollars sloshing around the system chasing yield, while regulators like the Securities and Exchange Commission and Federal Trade Commission are neutered by courts stacked with right-wing ideologues.
Remember what happened in 1929? The same “let the market police itself” ideology brought the whole thing crashing down. The difference now is that the contagion would be global and could even be instantaneous.
Trade shocks and de-dollarization are looming risks, too.
Trump’s tariffs hurt American farmers and manufacturers. His talk of a new 10% universal tariff could ignite a global trade war and could push countries like China, Brazil, or Saudi Arabia to finally abandon the dollar as the reserve currency.
If that happens—if Treasury bonds stop being the world’s safe haven—we’re looking at a collapse in our ability to finance debt, a surge in interest rates, a crash in the housing market, and mass layoffs. And the Republicans? They cheer it on. They think chaos is good politics.
And then there are tariffs.
There’s a reason the Founders of this country and Framers of the Constitution gave the power to enact tariffs exclusively to Congress. They knew that nobody would build a factory here unless they knew that a tariff defending their manufacturing would be in place for the decades it would take to recover their investment costs.
When tariffs are simply slapped here and there willy-nilly by a single man and can be easily repealed by the next president, no competent business manager would take them seriously: The only thing tariffs do, under these circumstances, is damage the economy. Meanwhile, Trump’s tariffs so far are going to cost the average American family $2,400 this year.
And, from Donald Trump’s point of view, they force foreign leaders to come grovel in front of him, which absolutely delights him. He brags about it, once noting that, “They are kissing my ass.” This is not trade policy; he’s just doing this for his ego.
And what about public confidence and how the loss of it could cause a depression?
You can’t have a functioning economy without trust in government, in institutions, in money itself. But the GOP has made destroying trust its central project.
They lie about elections. They undermine the courts. They spread conspiracy theories. They smear career civil servants. They openly praise authoritarianism.
When half the population no longer believes in the legitimacy of its own government, and when the other half sees that government captured by billionaires and zealots, economic confidence evaporates.
People stop spending. They stop investing. They retreat into cash and hoarding. That’s how depressions spiral out of control.
Now layer on climate instability and its ability to wreck an economy and you have a real mess.
The GOP’s climate denialism is not just immoral, it’s economically suicidal. Hurricanes, wildfires, floods, and heatwaves are destroying billions in assets every year.
Insurance markets are collapsing in California, Florida, and Louisiana. Agricultural yields are falling. Water shortages are hitting the Southwest. Floods are wiping out the Midwest and the South while wildfires torch the West. But Republicans keep slashing climate research, killing green energy subsidies, and banning environmental and social governance investment strategies. They are literally outlawing the future.
It’s a five-alarm fire, and the Republican arsonists are demanding more gasoline.
There is, however, a way out. We’ve done it before.
They’ve created the conditions for collapse, and they’ll blame immigrants, Democrats, or queer kids when it happens.
After the last Republican-created depression, then-President Franklin D. Roosevelt rejected the dogma of austerity and implemented the most ambitious suite of Keynesian policies in world history. He put people to work. He regulated the banks. He taxed the rich. He unionized the workforce. He broke up monopolies. He guaranteed Social Security, unemployment insurance, and the right to organize.
That system—Keynesian demand-side economics—created the greatest middle class the world has ever seen. It lifted millions out of poverty, stabilized capitalism, and gave rise to the postwar economic boom. It literally created the modern American middle class.
But starting in 1981, Reagan and the GOP declared war on that system. They gutted antitrust enforcement. They slashed top tax rates. They crushed unions. They deregulated finance. They privatized public goods. They shifted the burden of funding government from the rich to the working class. And then they blamed the victims of their policies for the resulting inequality and instability.
Now they’re going for the kill shot.
Trump and his Republican Party are not just misguided; they are dangerous. Their policies are not just bad; they are existential threats to economic stability. They’ve created the conditions for collapse, and they’ll blame immigrants, Democrats, or queer kids when it happens.
We can’t let them. We have to take our country back, economically, politically, morally.
That means rejecting trickle-down nonsense and restoring Keynesian demand-side policies. It means breaking up monopolies and rebuilding a regulatory state that works. It means bringing back progressive taxation and closing loopholes for billionaires. It means massive investment in clean energy, public health, education, and infrastructure. It means rebuilding trust in democracy by reversing Citizens United, defending voting rights, rooting out corruption, and calling out fascism where we see it.
This must be at the core of the platform Democrats run on this fall and during next year’s midterms.
The risk of a depression is real. But the solution is in our hands. We just have to stop letting the Republican Party light the matches.
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How Forever Chemicals 'Poisoned the World'
A new book tells the history of how U.S. corporations sold the country on toxic chemicals, while lying about the harm they posed.
Jul 27, 2025
Every child is born pre-polluted—polluted with dangerous, human-made chemicals.
So writes Mariah Blake in the preface to her important book, They Poisoned the World: Life and Death in the Age of Forever Chemicals. The United States is the place where she writes that every child is born pre-polluted, but I think merely because she's writing about the United States, not because it isn't also true of everywhere else on Earth. In fact, Blake quotes Rachel Carson as having written in 1962 that every human everywhere is subjected to dangerous chemicals from the moment of conception.
But U.S. corporations—chiefly Dupont and 3M—are the source of the problem. Well, them and the U.S. government or lack thereof. Forever chemicals, like standing armies, carpet bombings, nuclear weapons, income taxes, and so many of the things we hold dear, come from World War II, upon the end of which, as Blake notes, poison gases became pesticides, explosives became fertilizers, and military plastics became consumer goods. It's just possible that the respectable consumerism kicked off in the 1950s was a lot more reckless and damaging than any 1960s counterculture.
The origins of plastics—and of forever chemicals—goes back to research by DuPont prior to and during WWII. And the government's coverup of the dangers was part of the Manhattan Project—as was the public-relations campaign around the benefits of fluoride. The original sites that proximity to which could put cancer-causing forever chemicals into your body were Manhattan Project sites, and the Atomic Energy Commission covered up the dangers at the time, as did corporate profiteers, which have run denial and misinformation campaigns ever since. Before the first no-stick frying pan landed on the first shelf of the first U.S. store, Dupont was strategizing to minimize its financial risk for the harm and suffering expected to result. The tobacco and fossil fuel liars learned from the plastics liars, but were not as good at it.
I applaud Mariah Blake for telling moving, personal stories, and framing them in the broadest context.
Two big players drove the demand for fluorochemicals in the 1960s and 70s, as the dangers became more widely known, Blake writes. One was the U.S. Navy, which worked with 3M to develop PFOA-containing fire-fighting foam that Blake writes would be deployed at military bases across the country. (More accurate would be across the world.) The other was a former DuPont engineer named Bill Gore who had worked on military uses of Teflon but would go on to create Gore-Tex.
Blake's book does a tremendous job shaped around the familiar outline of interspersing particular personal stories with broader history. Her primary focus is on individuals in Hoosick Falls, New York, who become victims and activists, though stories from Parkersburg, West Virginia (perhaps known from the film Dark Waters) and North Bennington, Vermont, and elsewhere are also included. The corporate poisoners in Hoosick include Honeywell, which some readers will be aware is a major weapons maker. These stories are crushingly tragic with far too much detail to be statistics. But the statistics are also in the book. In 2016, over 5 million people in 19 U.S. states and several U.S. territories were informed their drinking water had unsafe levels of chemicals. I can hardly begin to imagine reading each of their stories, stories of death, suffering, birth defects, mothers giving birth in U.S. hospitals—like mothers near U.S. bases in Iraq—expecting birth defects; stories of choices being made between job security and challenging the poisoning of water by corporations that had known what would happen before they did it and had done it anyway.
Also chronicled here is the history of military and corporate control of environmental regulation, if it even merited that name prior to the sprees of deregulation indulged in since the era of the Teflon President Ronald Reagan (may his nickname evolve to mean deadly poisoner rather than impunity). Blake takes the history back to my neighbor enslaver Thomas Jefferson who gave DuPont government contracts for gunpowder long before Dupont's WWI merchandising of death, or (not mentioned in the book) its funding of fascist groups in the U.S., or its investment in both sides of WWII including GM's production of Nazi trucks and IG Farben's production of poison gas for concentration camps. The "regulation" history includes the Dupont-led establishment of the principle that all new chemicals are safe until proven otherwise. This, Blake notes, is why the vast majority of over 80,000 chemicals circulating in the United States (and presumably indifferent to borders) have never been tested for safety by the U.S. government.
Forever chemicals come from ground water, smokestacks, landfills, wastewater treatment plants, sewage sludge spread on farmland, firefighting foam, poisoned fish eaten by humans, and all variety of consumer goods. The particular ones that are subject to countless lawsuits are being replaced by new ones, less known and possibly more dangerous, but legal by virtue of not having been made illegal. They saturate the world before anyone begins studying them. Congress changed the absurd legal practice of approving all new chemicals in 2016, just in time for Trump 1.0 to illegally change it back.
I applaud Mariah Blake for telling moving, personal stories, and framing them in the broadest context. I quibble with a single sentence in the book, the one claiming that the bombing of Nagasaki "ended the war" which is a falsehood marketed by some of the very same people who told the world forever chemicals were good for us.
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