Emil W. Henry, Jr.
Although Fannie Mae and Freddie Mac played a central role in causing the recent economic crisis, they are absent from the reform plans of Congress and the Obama administration. So these two government-sponsored enterprises (GSEs) remain mired in conservatorship, as extensions of the federal government. Eliminating the GSEs and moving their activities to the private sector should be fairly easy: the Treasury Department can stop rubber-stamping their debt issuance at any time. Secretary Geithner can immediately reshape the mortgage markets by withholding his approval of new debt issuances by the GSEs. That’s the best way to begin curtailing the GSEs, and it can be done unilaterally.
Henry, the CEO of Henry, Tiger, LLC, was an assistant secretary of the Treasury from 2005 to 2007.