ABSTRACT
Rohr (1989) urged public administrators exercising discretion within the realms of public law and regulation to draw on regime values as a necessary bulwark against “low road” rules-based compliance. When norms conflict, as they inevitably do, Rohr cautioned against normative absolutism, elevating instead normative compromise as a legitimate administrative response. Using Rohr’s framework, this chapter explores the normative dimensions of the 2008 financial crisis, particularly the interplay between freedom and equality. This tension is evident in the continuing controversy over the role of the government-sponsored enterprises, Fannie Mae and Freddie Mac. Nearly bankrupted by losses on high-risk mortgages, the firms were bailed out by taxpayers in 2008 and remain under government control more than a decade later. Reform efforts would be helped by policymaker recognition of the competing norms that underpin the American dream of homeownership and the possibilities of normative compromise.
