Where Have All the Capitalists Gone

I thought big Ben Bernanke was a capitalist but it appears I may have been wrong.

"Government likely has a role to play in supporting mortgage securitization, at least during periods of high financial stress"

Why? Since when did our entire economy become dependent on securitized mortgages. In my opinion never.

"From a public policy perspective, a greater concern with fully privatized [firms] is whether mortgage securitization would continue under highly stressed financial conditions," he said. "As I have noted, almost no mortgage securitization is occurring today in the absence of a government guarantee."

Wait, so in a situation like this banks would actually have to hold the loans that they made? Oh no!!! Then they might even have to make sure the borrower was credit worthy.

"As the Federal Reserve has argued for many years, the enormous [Fannie and Freddie] portfolios pose risks to financial stability," he warned.

Let me get this straight, you want a massive government agency to oversee and back all trillions of dollars of mortgages but the size of the current government agencies doing just that is a threat to stability.
Perhaps if the government had kept its nose out of the mortgage business all along several private smaller versions of Fannie and Freddie would have cropped up to fill that need in the economy. Politicians must think that because they cant see the "invisible hand" it must not exist.