| Abstract: | Fannie Mae and Freddie Mac are insolvent and in government hands. Political forces led many lawmakers to neglect warnings from public administration academics and practitioners about the vulnerabilities of government-sponsored enterprises (GSEs). Private ownership combined with government backing let the two companies dominate their markets and the political process. GSEs successfully resisted bank-type regulation and capital requirements. The options now include restoring the two GSEs in some form, transforming them into temporary or longer-term wholly owned government corporations, or simply ending them. This article discusses the advantages and drawbacks of each option. Again, the public administration literature provides useful suggestions about organizational alternatives. |
