by Tanta on 9/08/2008 11:12:00 AM

Paul Krugman would like us all to get straight on the difference between "nationalization" and "deprivatization."

I wish Professor Krugman well in his endeavor, but I'm still waiting for the mainstream press to get clear on the difference between an "asset" and a "liability." Here's USA Today, headlined "Taxpayers take on trillions in risk in Fannie, Freddie takeover":

Freddie Mac and Fannie Mae combined own or guarantee $5.4 trillion in outstanding mortgage debt. The government's decision to place both agencies into a conservatorship — in essence, taking on responsibility for that debt by wresting control from the corporations — is an historic move.

I'm sure some regular readers of this blog think it's silly to be concerned about the level of ignorance and inanity appearing in USA Today, but I'm guessing that most voters get their information about things like the Fannie/Freddie deprivatization from headlines in the mainstream press, not the Financial Times or the Wall Street Journal. So the claim that $5.4 trillion in mortgages represent net liabilities of Fannie and Freddie, instead of assets, and that these are now liabilities of the taxpayers, is going to become one of those things that a lot of people "know" and quite possibly the only thing they "know" about this subject. Eradicating that "knowledge" is going to be tough.