Government Influence and the Failure of Fannie Mae and Freddie Mac

In 2008 two government-sponsored enterprises, Fannie Mae and Freddie Mac, were placed into conservatorship due to insolvency. The financial bailout of the two publically traded corporations came at the expense of the American tax payer. This study investigates the relationship between direct and indirect government influence and the increasing risk taking of Fannie Mae and Freddie Mac from the late 1990’s through their conservatorship in 2008. As government-sponsored enterprises Fannie Mae and Freddie Mac have many special advantages that other publically traded companies did not possess. These advantages allowed Fannie Mae and Freddie Mac to increase their profitability. Theoretical literature regarding Congress and the bureaucracy suggests that the actions of bureaucrats can be linked to the preferences of Congressional members because bureaucrats are responsive to potential threats or perceived threats from the legislature. This theory is applicable to Fannie Mae and Freddie Mac, and is used to explain why the government was able to directly and indirectly influence the government-sponsored enterprises. Overall this investigation has determined that the United States government pursued a clear mission that determined to increase the availability of housing to all Americans, specifically to low-income and under-served individuals, through the use of the government-sponsored enterprises. Despite this link there is no conclusive data to show that the pursuit of this housing mission led Fannie Mae and Freddie Mac to operate in riskier business segments. This study has also found that motivation regarding profit-seeking and compensation structure provide a more plausible explanation for why the government-sponsored enterprises began to engage in riskier business practices that led to their insolvency.

The Clearing Storm: A Re-Assessment of the Climate for Collaboration between Academic and Student Affairs

There is increasing recognition among those in higher education that it is no longer adequate to train students in a specific field or industry. Instead, the push is more towards producing well-rounded students. In order to do so, all of a university’s resources must come together and the climate on campus must be one that supportscollaboration. This report is a re-examination of the climate for collaboration on the campus of a private liberal arts university in the Mid-Atlantic region of the United States. It is a follow up to a similar investigation conducted on the same campus by Victor Arcelus(2008) five years earlier. In the interim, the university had re-configured its organizational structure, combining separate academic and student affairs divisions into a single unit overseen by the Provost. Additionally, the university had experienced turnover in several key leadership positions, including those of the President and the chief academic and student affairs officers. The purpose of this investigation, therefore, was to gauge the immediate impact of these changes on conditions for collaboration, which when present, advance student learning and development. Through interviews with six men and women, information was collected on the perceived climate for collaboration between academic and student affairs personnel.Analysis of the interview transcripts revealed that, depending on the position of the interviewee within the university, conditions on campus were seen as either improved or largely unchanged as a result of the transition in leadership and the structural merger of the two divisions.