Tuesday, December 11, 2012

Fiscal Cliff to Fund Fannie Mae Extravagance?




Click here for related story  [Washington Post/Suzy Khimm]

The Post's e-version of Suzy Khimm's hard copy paper story on the Inspector General's Report omits noteworthy information [seems the Post didn't like the content as it makes the Administration look bad as we approach the Fiscal Cliff].  

"Median cash compensation [in 2011] for 333 vice presidents was $388,000 and for 1,650 directors $205,000 [an INCREASE of 5.4% for VPs and 3.9% for directors over 2010]. Total 2011 compensation for 2,000 senior staff was $455 MILLION.  The top 87 executives received compensation was $92 MILLION."

Huge compensation for creating huge losses
Many of these folks are the same ones who helped tank the housing industry; others have joined the plunder from Goldman Sachs and AIG -- recipients of other bailouts. 
By 2010, the bailout of Fannie Mae had cost TAXPAYERS more than $135 BILLION.  By 2012, the combined bailout cost for Fannie Mae and Freddie Mack exceeded $200 Billion.

Why are there 333 Vice Presidents?
Why are there 1,650 Directors?
Why are these bureaucrats paid exorbitant salaries?
Why are we, the taxpayers, continuing to fund these high-priced DNC employment mechanisms.

Keep in mind that Fannie and Freddie are now "Government Sponsored Enterprises" -- which are the equivalent of government agencies since the government had to take them over via the TARP bailout plan.  One would think, then, that the bureaucrats should be paid on the Civil Service scale -- vs the "take as much cash as you can jam in your pockets" scale.  Instead, these faceless bureaucrats earn more than our Senators and Congresspeople, and in some cases, more than the President of the US.

Negotiating the housing market maze.
Consider also that, since 2009, these bureaucrats have created so many obstacles in the path of the housing recovery that virtually no progress has been made to resolve the foreclosure crisis -- or to ease the restrictions in the housing market. 

Their "cure" for the foreclosure crisis was to create so many obstacles for homeowners that they were forced out of their homes; for purchasers, the obstacles made it almost impossible to buy foreclosed houses -- even with cash. 

And finally, the new rules imposed have strangled the normal housing market, forcing well qualified purchasers with excellent credit and substantial down payments to wait months for mortgages to process.

In August, Treasury adjusted the bailout terms to require that Fannie wind down its investment portfolio more quickly, with profits redirected to the government -- preventing them from rebuilding capital or enabling them to return to non-government status.  This follows an earlier strategy in which Fannie made regular dividend payments to Treasury to repay the bailout.  Chairman Baucus [House Financial Services Comittee] noted that this change will ensure that the government would never recover its bailout funds, and embed Fannie and Freddie as government financial money pits. 

As we approach the Fiscal Cliff, which promises to substantially Raise our Taxes, keep in mind that the Administration will have you continue to fund these exorbitant salaries for these worthless slugs -- who will continue to live large while your lifestyle is degraded; to them, you are only the 'little people".

Something to chat with your Congressperson about during this Fiscal Cliff "crisis.