An editorial in my hometown newspaper:
The top executives with two government-sponsored enterprises (GSEs) are raking in enormous salaries at a time when taxpayers have had to pump in $153 billion just to keep them solvent. This is just one more sign that the federal government has lost touch with the American people and has turned a deaf ear to cries from citizens for bringing spending under control.
Every time someone calls for fiscal sanity in the nation’s capital, they are immediately accused by big government advocates of wanting to starve old people and school children. In reality, it is such wasteful spending of agencies like Fannie Mae and Freddie Mac that are being protected by the lack of fiscal responsibility in Washington.
The nonpartisan group Citizens Against Government Waste recently revealed in the Inspector General’s report of the Treasury Department’s Federal Housing Finance Agency, which oversees GSEs, that executive compensation packages at Fannie Mae and Freddie Mac had significant weaknesses and excesses.
The report showed that the two CEOs of these behemoths earned a combined salary of $17 million (with options to take home $24 million). Include the top six executives of both agencies and the combined total rises to $35 million.
Keep in mind those two agencies contributed heavily to the September 2008 financial collapse, which required the $153 billion to keep them afloat. It is mind-boggling that such failure should reap such rewards for the top people.
In addition, the IG report also showed that in 2009, Fannie Mae executives stood to possibly benefit from the Federal Reserve purchasing large amounts of Fannie’s mortgage-backed securities (MBS), as a part of the company’ s bailout package, according to CAGW.
“Congress must unwind the GSEs as quickly as is feasible and get the U. S. Treasury and taxpayers out from under this burden,” said CAGW President Tom Schatz. “After more than two years in conservator-ship and having soaked the taxpayers for $153 billion, GSE management is still overpaying their executives. In their halcyon days, Fannie and Freddie were notorious for their lavish executive salaries and perks. Old habits die hard; but taxpayers should no longer be forced to foot the bill for GSE executives’ swanky lifestyles,” concluded Schatz.
If it is frustrating and infuriating to see such unbridled waste going on in the government, with no apparent consequence. Thomas Jefferson, the third U. S. President, warned long ago of the concentration of too much power in Washington. We are now seeing exactly what Jefferson was talking about. Fannie Mae and Freddie Mac are just the tip of the iceberg of the financial wreck that is coming in the nation’s capital if spending isn’t brought under control.