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This is by far the clearest response to the core of what Cuban is aiming at, and thanks for that. I am interested in drilling down deeper on your comment about

This is by far the clearest response to the core of what Cuban is aiming at, and thanks for that. I am interested in drilling down deeper on your comment about Fannie & Freddy. I don't view their failure as a criticism of the idea of loaning for the public good. I definitely view their failure as a lack of oversight combined with perverse incentive structures and a truly mind-boggling denial on the risk of loans. But what befell Fannie and Freddy also blew up Wall Street. So the deeper underlying question is if there are people out there who are better at assessing loans who the government could use as intermediaries for taking advantage of the low credit available to the gov? (yes that's predicated on this being feasible at all in the first place, which i don't take for granted)

wisty 15y ago
I'm also dubious about how Fannie and Freddie failed. There was a bubble (caused by what, low rates? guarantees? demographics? the credit bubble?), and it deflated. But the US government is not the only entity to screw up in this way. The UK housing bubble also burst. Japan had the same problem. And while the government was certainly involved, so was private industry and the general public. It doesn't prove "government = bad", that's just confirmation bias. What it does prove is that you (the government, industry, or general population) shouldn't pour too much money into areas that show all the signs of a credit bubble.
acslater00 15y ago
Obviously opinions can differ here, but what happened in 2007-2008 was in my view a lesson on what happens when you ignore the inherent risk of lending money to a private actor. Mortgage originators and a whole slew of investors ignored those risks in an effort to chase returns; Fannie and Freddie ignored those risks as a matter of charter. They both ended up in more-or-less the same spot.

wisty 15y ago

I'm also dubious about how Fannie and Freddie failed. There was a bubble (caused by what, low rates? guarantees? demographics? the credit bubble?), and it deflated. But the US government is not the only entity to screw up in this way. The UK housing bubble also burst. Japan had the same problem. And while the government was certainly involved, so was private industry and the general public. It doesn't prove "government = bad", that's just confirmation bias. What it does prove is that you (the government, industry, or general population) shouldn't pour too much money into areas that show all the signs of a credit bubble.

acslater00 15y ago

Obviously opinions can differ here, but what happened in 2007-2008 was in my view a lesson on what happens when you ignore the inherent risk of lending money to a private actor. Mortgage originators and a whole slew of investors ignored those risks in an effort to chase returns; Fannie and Freddie ignored those risks as a matter of charter. They both ended up in more-or-less the same spot.