As legislation regarding the fate of Freddie Mac and Fannie Mae ("Frannie") bounces around in Congress, the liberal blogosphere has gone into action with a variety of arguments against the GSEs and government encouragement of home ownership generally.
The argument that the existence of non-conforming 30 year jumbo mortgages--loans not backed by Frannie because the total loan amount is too large--shows that the standard 30 year mortgage would exist absent government backing has always struck me as obviously specious. Banks might be very willing to make a 30 year loan on a 10 million dollar house but not on a $100k one.
Mike Konczal goes through this point and others making the liberal case for Frannie.