by Mary Kladde
Fannie Mae and Freddie Mac recently took to Capitol Hill to defend enormous executive bonuses after Congress voted to subject GSE employees to the federal pay scale. Seriously? The price tag for the GSE bailout is estimated to be $169 billion and counting, as losses continue to mount.
In the real world, at least among small to mid-size companies which represents the backbone of the US economy, if your company isn’t making a profit, you don’t get paid, much less are you rewarded with bonuses. You tighten your belt or go out of business! I’m not sure why the GSEs and Wall Street don’t work this way.
It must be the “OPM” virus which is infecting the “pure” capitalism exhibited here and on Wall Street. That means “other people’s money” is used to pay for failure. But, in this case and the previous bailouts, the “other” is the taxpayer. Apparently as an executive of Wall Street or the GSEs, it is all about what “you personally” can take home, and has nothing to do with accountability, loyalty, or success of your company overall. This is the primary disconnect between “main street” and Wall Street.
While I don’t agree with “The 99” protestors on many levels, it is this kind of hubris and lack of accountability among the major players in the mortgage meltdown and financial crisis that’s fueling their outrage. And justifiably so, since it’s taxpayer dollars that allows them to achieve such wealth. No wonder so many “99ers” favor of socialism…I mean these guys run companies that don’t make money and they get corporate welfare to support their lifestyles.
Freddie Mac CEO, Charles Haldeman’s, monotone delivery in expressing his sympathies with those who are outraged over the bonuses was downright insulting. People lost their homes, their jobs, and their livelihood. He made $7.8 million over the last two years. His counterpart at Fannie Mae, Michael Williams, made $9.3 million over that same period. Sorry, Mr. Haldeman, but I don’t think you understand….17.1 million could employ many people over a 2 year period instead of just 2. Additionally bonuses should imply profitability, not crisis control…JUST SAYING!
You can read more about the GSEs’ justifications here: http://blogs.wsj.com/developments/2011/11/16/fannie-freddie-executives-defend-pay/