well in the private sector, profit is certainly an incentive but too much risk leads to failure and the greed is kept in check.
With freddie mac, there is unlimited profit with no risk of failure. It just grows and grows until it is completely irresistible because the govt will always back it up if it screws up.
“in the private sector...too much risk leads to failure and the greed is kept in check.”
I don’t know about that, it took several years for the cost of greed to become apparent and it is only now being checked to the detriment of the whole world. As to blaming freddie mac, I heard a figure somewhere that they and fannie only account for about 3% of the overall mortgage problem. Apparently these types learned nothing from the S&L scandal, since they did the same irresponsible sort of things, leaving us taxpayers to clean up after them. Of course, it is possible that in the long run there will not be a loss, but why should it be our responsibility in the first place.