Then you ought to be positively livid about this:
The Obama administration pledged Thursday to provide unlimited financial assistance to mortgage giants Fannie Mae and Freddie Mac, an eleventh-hour move that allows the government to exceed the current $400 billion cap on emergency aid without seeking permission from a bailout-weary Congress.
The Christmas Eve announcement by the Treasury Department means that it can continue to run the companies, which were seized last year, as arms of the government for the rest of President Obama’s current term.
But even as the administration was making this open-ended financial commitment, Fannie Mae and Freddie Mac disclosed that they had received approval from their federal regulator to pay $42 million in Wall Street-style compensation packages to 12 top executives for 2009.
The compensation packages, including up to $6 million each to Fannie Mae and Freddie Mac’s chief executives, come amid an ongoing public debate about lavish payments to executives at banks and other financial firms that have received taxpayer aid. But while many firms on Wall Street have repaid the assistance, there is no prospect that Fannie Mae and Freddie Mac will do so.
The way in which Congress is being circumvented is charming, of course. Who said that the Imperial Presidency is dead? I would think, of course, that this bailout–even as Fannie and Freddie are handing out multimillion dollar bonuses–means that the Obama Administration is no longer in any position to thunder in populist fashion at Wall Street’s general direction, but I have been surprised before.
My friend and colleague, Francis Cianfrocca, notes via e-mail that this activity:
[t]otally violates the term sheets that Treasury wrote up for F&F when they were nationalized. But we all knew this would happen.
If you need to pay private-sector style salaries to the people who run these two massive government agencies, then what about the people who run HUD, HHS, the Pentagon, etc. Maybe the top government salary should be raised to a $900,000 base plus bonus. (Although even that wouldn’t make it possible to hire a top CEO for GM or Bank of America.) I’d love to see them try to sell that.
The term sheets in question refer to “the provisions that called for F&F to divest one-tenth of their total portfolios per quarter. The conservatorship clearly contemplated that these entities would disappear entirely within three years.” As Francis says, “[f]at chance. If anything, F/F are worse than nationalized health care.”
Jane Hamsher sees the fine and subtle hand of Rahm Emanuel behind this whole thing, which has led her to work with Grover Norquist of all people, in an effort to investigate Emanuel and his ties to Fannie and Freddie (Hamsher defends her call here). It is nice to see that Hamsher has finally grokked the fact that certain of the Obama Administration’s doings are–how to phrase this?–less than laudable, but it is a puzzlement as to why she thinks that getting rid of Rahm Emanuel will solve her problems with the Administration. After all, the Cossacks work for the Czar.