Deep down most free market advocates are convinced that the interferences of the GSEs were responsible for the disaster that was beginning to unfold in 2006. The GSEs had political mandates set by progressives to funnel money into underserved communities. They had a market-distorting funding advantage due to their attachment to the federal government. When you distort the market, crises are inevitable.17 It was this conservative critique of the GSEs that shaped the Republican reaction when the crisis reached fever pitch in 2008.
