Serving Two Masters, Yet Out of Control examines the two irreconcilable roles of The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). In effect these government sponsored enterprises serve two masters. As publicly owned corporations, they are required to maximize profitability for their shareholders; as government agencies, they have been assigned public missions for which they receive an implicit government subsidy. The size of this subsidy and how it is divided between their public and private objectives, the risks that those objectives create for taxpayers, and the agencies' resistance to efforts by any regulatory body - or even Congress - to gain control over their activities exemplify the internal tensions created by their conflicting objectives. Essays in this volume address the question of whether these organizations should retain the favored positions that have allowed them to grow to unprecedented size, to realize extraordinary profitability, and to achieve unparalleled influence over the political process.
The editors conclude that the only viable solution is to fully privatize the two agencies or to adopt policies that would force the agencies to adopt this course themselves.