CHICAGO, November 2, 2011- Remember when AIG paid big bonuses to their contract employees after being bailed out by the federal government? There was a hue and cry loud enough to be heard on the planet Pluto. It got so bad that the homes of the executives and some of those receiving the bonuses were picketed by professional progressive protesters.
When banks, especially the evil incarnate, Bank of America, or Wall Street firms announce their bonuses, there is generated anger among the various mobs of professional progressives. The media has a field day interviewing these enraged people and reporting their revulsion. It is made to appear that the anger and revulsion is shared nationally.
The rage is ratcheted up several notches when bonuses are paid to executives whose companies lost money or did not meet profit expectations. Or worse, when they met those projections of on the backs of thousands or tens of thousands of pink slips.
Freddie Mac and Fannie Mae, the hybrid semi-private mortgage entities, are issuing seven figure bonuses to some of their executives. There is not one peep out of the media or the professional protesting mobs. No one is averse to this, no groups are planning to picket the homes of the executives. The White House is silent, both houses of congress are mute. No one is threatening to drag these people before hearings to explain themselves.
The normally wealth averse president is not asking them how much is enough. He is not at some podium, in his shirt sleeves raging at the excesses of Fannie and Freddie.
Even the Occupy Movement and the Tea Party are strangely silent. Fannie and Freddie received 169 billion dollars in government bailouts after the mortgage crash. A crash many say they were involved in. It is projected that taxpayers may be on the hook for between 50 and 142 billion dollars more over the next few years.
Fannie and Freddie received bailouts. Their fat cat executives are getting obscene bonuses. Can anyone smell the stench of hypocrisy? Or do olfactory senses go dead when Fannie and Freddie are involved?
12.79 million dollars in bonuses will be doled out to ten executives. This cash cow was approved by the Federal Housing Finance Agency. FHFA is the government agency that regulates Fannie Mae and Freddie Mac.
The reasons for the bonuses? The ten executives were responsible for modest performance in mortgage modification to stem foreclosures. These ten executives will be paid over one million dollars each for mediocrity.
This goes unquestioned. Banks, investment houses, and insurers are on the firing line daily. Yet, Fannie and Freddie are not only absolved but rewarded. They share the rewards with their mediocre executives.
Fannie Mae and Freddie Mac were spared the continual harsh criticism banks and investment houses suffered. The accusations against them were mild in comparison to their brethren in the totally private sector. They elided scrutiny from congress and they are still living in blameless shadows.
There should be unleashed anger over these bonuses, by the people, by congress, and by this administration. Paying million plus dollar bonuses to executives for modest performance by an agency backed, funded, and bailed out by the government is bad policy. It’s obscene.
Worse, paying bonuses to executives of one of the entities responsible for the mortgage collapse is rewarding the fox for guarding the chicken coop.
Fannie Mae and Freddie Mac buy mortgages from lenders. They package those mortgages into bonds, guaranteeing the loans against default. The bonds are then sold internationally on the open market. If the loans go into default Fannie and Freddie must pay for the losses.
Last year the two agencies owned or guaranteed approximately 50% of all home mortgages- over 30 million home loans. These loans are estimated to be worth 5 trillion dollars. Fannie and Freddie are too big to fail. Their over paid executives are being supported, aided, and abetted by the government.
It is time for congress to look deep into the operations of Freddie and Fannie. Real deep. It is time to investigate not only them, but their regulator, the Federal Housing Finance Agency. If banks, investment houses, and public corporations can be excoriated over compensation plans, then government backed entities should receive even more public scrutiny.
It is time to don the masks, boots, and protective clothing and wade through the effluent that is Fannie Mae and Freddie Mac.
The occupiers should form a new group. OFF. Occupy Freddie and Fannie.
Peter Bella is a retired Chicago Police Officer, freelance writer, freelance photographer, and consultant. He is a passionate cook and eater. He likes to be the sharp stick that pokes, annoys, and provokes. His opinions are his and his alone.
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