Will There Be a Corresponding Media Call to Pitchforks?Please don't halt respiratory activity in the waiting.
Freddie Mac and Fannie Mae are two public-private partnerships known as Government Sponsored Entities (GSEs). Wherein the executive staff, populated with woefully unqualified, egregiously overpaid political crony appointees, get to play housing market roulette with the House's (read: OUR) money.
Freddie and Fannie have spent the last two decades plus buying up nearly every horrendous home loan the federal government forced banks to make to unqualified borrowers. While the going was good, so too were the profits and attending bonuses for these political hacks posing as home lending experts.
But when the market collapsed, Freddie and Fannie were left holding the toxic asset bag. And by Freddie and Fannie I mean us. You and me. We tax payers.
When these two TITANIC entities caved in, the sinkhole created caused a lot of surrounding businesses to fall in as well. That, in a broad overview, explains at least in large part our current economic predicament.
Well, today's Wall Street Journal (subscribers only get the full story) informs us that Frannie and Freddie will spend the next eighteen months doling out $210 million in retention bonuses to 7,600 employees.
The media went apoplectic last month when American International Group (AIG) - collateral damage of the Freddie and Fannie mess and a federal bailout recipient - paid $165 million (that would be LESS than Freddie and Fannie will be paying) in retention bonuses. Many of them to people who had worked for $1 salaries in anticipation of their lump sums and were not in the hedge fund-wing that landed the company in the corporate handout line.
The press rushed to stoke populist rage, demanding that the money be returned and righteously championing the 90% specialty tax passed by Congress to punitively (not to mention unConstitutionally - equal protection, anyone?) pull back the bonus money via the Internal Revenue Service.
Will they again look to assemble the pitchforked now that Freddie and Fannie - entities that have received federal money every day since their inception - are about to dole out bonuses identical in style and greater in amount?
Again I say, don't hold your breath.