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Government‐Sponsored Enterprises: Reality Catches Up to Public Administration Theory
Author(s) -
Stanton Thomas H.
Publication year - 2009
Publication title -
public administration review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.721
H-Index - 139
eISSN - 1540-6210
pISSN - 0033-3352
DOI - 10.1111/j.1540-6210.2009.02012.x
Subject(s) - administration (probate law) , government (linguistics) , insolvency , business , politics , finance , capital (architecture) , public administration , private capital , economics , political science , law , philosophy , linguistics , foreign direct investment , macroeconomics , archaeology , history
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.