Donald Trump makes little effort to hide his plans to give ever more money to rich friends. He has made it clear that giving contracts to Elon Musk is a great way for countries to avoid tariffs. He has shut down regulatory agencies that investigate wrongdoing by Elon Musk and other rich people.

He has made it clear that the National Labor Relations Board will be used as a weapon against workers trying to organize. And of course, he has his big tax cuts for the richest people in the country, which he is partially offsetting by raising taxes (tariffs) for working people.

There has never been a president in the history of the country who has been so blatant in his efforts to redistribute income upward. In that context it should hardly be surprising that Trump is now proposing to reprivatize Fannie Mae and Freddie Mac, the mortgage giants that went under when the housing bubble collapsed in 2008.

Trump said that he wants to make Fannie and Freddie private but keep the “implicit” government guarantee for the companies. Not to be overly picky, but if the president announces a guarantee, it is “explicit,” not implicit. But the more important point is that making Fannie and Freddie private will raise mortgage interest rates.

Private investors will want profits, and those profits will mean higher mortgage rates. A few years back, the Congressional Budget Office estimated that privatizing Fannie and Freddie would raise average mortgage rates between 10-20 basis points, or one-tenth to two-tenths of a percentage point. Given current market rates, this would push the rate on new mortgages to over 7.0 percent.

This would be the investors’ take. It’s also important to note that a private company pursuing profits has a strong incentive to make irresponsible loans, especially if it can count on Donald Trump’s government guarantee if those loans go bad. (Have we seen this movie before?) Strong regulatory oversight could limit this risk, but we know what Donald Trump and his sidekick Elon Musk think of regulatory oversight. That’s chainsaw stuff.

So, who benefits from privatizing Fannie and Freddie? Possibly the people who own lots of stock in the companies, like big Trump backer Bill Ackman. Would Donald Trump screw millions of homebuyers to make his billionaire friend even richer? Does anyone have to ask?

This first appeared on Dean Baker’s Beat the Press blog.

The post Trump Wants to Make Mortgages More Expensive to Make His Friends Richer appeared first on CounterPunch.org.

This post was originally published on CounterPunch.org.