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Housing policy at a crossroads

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Who would have thought? Our nation's long experimentation with privatizing housing came to a screeching halt this past weekend when Treasury Secretary Henry Paulson -- a Republican -- put Fannie Mae and Freddie Mac under federal government ownership. Paulson has not lost his mind. His response to Fannie and Freddie's woes were his only choice under the circumstances. But the outcome creates a policy brain teaser and a formidable challenge for meeting our housing needs going forward. Forty years ago Raymond Lapin, a California Democrat, began a long crusade to privatize the United States housing market when, as president of Fannie Mae, he converted the government agency into a private enterprise. Despite his good efforts, then-President Richard Nixon fired Lapin, but a Republican appointee carried on his inspiration. Lapin understood that to house the growing U.S. population the government could not do the job alone. Private capital was essential. The U.S. population has grow...