This is a disingenuous reading on the meltdown of secondary mortgage markets in the US and its relationship to the global financial crisis of 2007–2008. Your argument makes it sound like secondary mortgage markets collapsed in the US because Democrats somehow short circuited free market mechanisms in housing markets at some point in the 1990s or 2000s in the interest of central planning of housing. This is a bizarre ideological reading on a much longer history of an institution largely structured by federal statutory and regulatory standards from its beginnings during the Great Depression. Fannie Mae didn’t start marketing mortgage backed securities in the 2000s or even in the 1990s — it had been doing so since 1968, when Congress spun off part of the entity into government owned Ginnie Mae (purchasing only FHA insured mortgages) and the rest of Fannie Mae was privatized and empowered to sell public shares like any other publicly traded private financial corporation. Over the course of Fannie Mae’s history, from its inception as a government administration in 1938 until the secondary mortgage market meltdown, home ownership rates in the US went from less than 44 percent to over 66 percent (Source: https://www.census.gov/hhes/www/housing/census/historic/owner.html), an increase largely attributable to the fact that a government-structured secondary mortgage market existed to inject liquidity into primary mortgage markets. To argue that the whole federal project of creating sources of liquidity to private mortgage lenders to dramatically increase home ownership rates in the US over this period was a categorical failure (or, for that matter, a good example of misguided socialist central planning as opposed to a judicious effort to ameliorate free market mechanisms to deliver a palpable improvement on home mortgage markets) is ludicrous. Moreover, to argue that blame for the secondary mortgage market collapse is attributable to Fannie Mae and Freddie Mac or, rather, to the fact that the mortgage backed securities that they were marketing carried an implicit federal guarantee extracts the development of secondary mortgage markets during the 2000s away from a larger history of financial market “reform” going back to the 1980s and culminating in the Gramm-Leach-Bliley Act of 1999, which permanently removed the Glass-Steagall firewall between commercial banks/primary mortgage issuers and investment banks/insurance companies. It would be misleading on my part to argue that a single act of legislation led to the collapse of secondary mortgage markets or that the implicit guarantee on mortgage backed securities issued by Fannie Mae and Freddie Mac did not play a role in this, but it is likewise misleading to characterize the activities of these entities as an irresponsible use of their “monopoly” power in secondary markets when, in the run-up to 2007, they weren’t operating as monopolies — post-Gramm-Leach-Bliley secondary mortgage markets were awash with private capital chasing after high rates of return on mortgages not conforming to repurchase rules for the government sponsored entities (e.g. subprime mortgages). In this context, Fannie and Freddie watered down their conformity requirements and started loading up with subprime mortgages at the behest of investors seeking higher rates of return and, secondarily, at the behest of a (Republican) presidential administration pushing home ownership in underserved, lower-income urban housing markets. If this says anything about the dangers of allowing Fannie and Freddie to market securities with an implicit guarantee that taxpayers would bail out investors if the mortgages on which they were based went south, then I would argue that it says a lot more about the dangers of selectively deregulating the financial sector in the hopes of drawing massive amounts of private capital in housing markets in order to make rates of return sexier than those available from the bland conforming, conventional thirty-year mortgages that Fannie and Freddie were marketing for most of their histories. If the larger history of home financing over the last century can tell us anything, it is that private primary mortgage markets work better and produce moderately higher rates of home ownership when a reliable source of secondary financing/liquidity exists, under well defined rules to manage default risks, and that, for most of that period, the federal government has either directly provided such financing or implicitly guaranteed its provision by private investors.