The current Administration in Washington has referred to the 9/11 terrorist attacks as man-caused disasters. This is poliltical correctness taken to the extreme. Meanwhile, there is no comment from the administration on the man-caused disaster that is Fannie Mae and Freddie Mac.
Tuesday’s Wall Street Journal reported that on Christmas Eve the Obama Administration removed the $400 billion limit on funds given to Fannie Mae and Freddie Mac to keep them solvent.
The article points out:
“Fannie and Freddie’s congressional sponsors–some of whom are now leading the administration’s effort to “reform” the financial system–have a lot to answer for. Rep. Barney Frank (D., Mass.), chairman of the House Financial Services Committee, sponsored legislation adopted in 2008 that established a new regulatory structure for the GSEs. But by then it was far too late. The GSEs had begun buying risky loans in 1993 to meet the “affordable housing” requirements established under congressional direction by the Department of Housing and Urban Development (HUD).”
There have been attempts to regulate Fannie Mae and Freddie Mac. In 2005 the Democrats blocked legislation by the Republican controlled Banking Committee that would have established more auditing and oversight of the two agencies. When you look at bonuses paid over the years to people high up in the agency, you see many names you recognize and major players in the Democrat party.
The article points out:
“By the end of 2008, Fannie and Freddie held or guaranteed approximately 10 million subprime and Alt-A mortgages and mortgage-backed securities (MBS)–risky loans with a total principal balance of $1.6 trillion. These are now defaulting at unprecedented rates, accounting for both their 2008 insolvency and their growing losses today. Since 2008, under government control, the two agencies have continued to buy dicey mortgages in order to stabilize housing prices.”
The role of Fannie Mae and Freddie Mac in the mortgage crisis is obvious. My question is this, with the amount of money the government is having to pour into these entities to keep them solvent, why are their top employees being paid very large bonuses?
On December 27, RightWingGranny reported that the top twelve executives at Fannie Mae and Freddie Mac will be receiving bonuses totaling up to $5 million. This is taxpayer money–we are bailing them out–why are they getting bonuses?