Joseph Stiglitz's argument that market failure in the mortgage market justifies Fannie and Freddie ignores that the GSEs would have their own incentives to push the regulatory envelope; moreover, the failure to supply 30-year fixed-rate mortgages is not a true market failure like overfishing a commons, but merely a failure to produce the kind of mortgages Stiglitz prefers.

causalpending

Speaker

Arnold Kling

Evidence Quote

it's really stretching the term market failure to say that there's some market failure in the mortgage market because you don't get the kind of mortgages that stable tomorrow

Source

Arnold Kling on the Unseen World of Banking, Mortgages, and Government 07/5/2010EconTalk
Created: 6/13/2026, 7:04:06 PM

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