A Republican administration has nationalised Fannie Mae and Freddie Mac, though it is nationalisation with US characteristics. As a result, US housing finance has been brought under direct government control and, in the process, the gross liabilities of the US government, properly measured, have increased by $5,400bn (€3,800bn, ￡3,000bn), a sum equal to the entire publicly held debt and 40 per cent of gross domestic product.

Yet the administration is merely recognising the reality that these “government sponsored enterprises” were undertaking a public purpose, at the public's risk, though not without dispensing vast rewards to management along the way. That is a scandal. Whether the body politic will recognise it remains unclear. Since this is a bipartisan mess, the likely answer is No.

So what has the administration done? Was there an alternative? Will it work? What lessons should be learned?