During the bubble years I had several debates with Freddie Mac's chief economist, Frank Nodthrift. He always assured audiences that the housing market was just fine and that nationwide house prices never fall. I always hoped that he was telling his employer something different than what he was saying in these public forums. Apparently he wasn't and neither are his successors. The Post reports that Freddie Mac just got $13.8 billion from the government as part of its bailout. Explaining the need for the money, the article cites a comment from Freddie Mac: "After leveling off earlier this year, the company said, housing prices nationwide resumed their steep decline recently." Ummm, no that is not true. House prices were falling very steeply early this year according to the Case-Shiller index, dropping at a rate of close to 2 percent a month. The Post should have called attention to the inaccuracy of this assertion by Freddie Mac and devoted a major article to their efforts to misrepresent the state of the housing market.
--Dean Baker
