Apparently, the bonuses for Fannie and Freddie executives are just fine in the White House's view, but some under similar circumstances weren't/aren't.

Shortly after taking office, President Obama reacted to Wall Street bonuses handed out in January 2009 with incredibly harsh language, calling them “shameful” and “the height of irresponsibility.”

“Folks on Wall Street who are asking for help need to show some restraint and show some discipline and show some sense of responsibility,” he said. A few months later, Obama pledged that there would be “no more bonuses for companies that taxpayers are helping out,” calling them a violation of “our fundamental values.”

Right, so if you get a bailout, no bonus for you, right? Maybe, maybe not--it depends on whether or not the President likes you:

Why hasn’t the Obama administration erupted in similar shaking outrage over the bonuses at Fannie and Freddie? You have to read this to believe it:

When asked about it on Tuesday, press secretary Jay Carney washed the administration’s hands of the matter. “These entities are independent and therefore they are independent decisions,” he said. “The White House is not involved, and nor should it be.”

Independent? Are they kidding us? Had they been independent, we likely wouldn’t have had the housing bubble in the first place. These government-sponsored enterprises have never been independent, which is why they ended up with big bailouts that are, by the way, continuing to this day. AIG and other bailout recipients are paying the loans back, not demanding new funding.

Worse yet, Obama and the Democrats in Congress had the opportunity to make both Fannie and Freddie independent in their reform of financial-sector regulation, which became Dodd-Frank. Despite their central role in the housing bubble and financial sector collapse — their mortgage-backed securities were literally the link between the two — Democrats refused to privatize both entities when they had full control of Congress and the White House. Instead, they dumped tons of new regulation on Wall Street, where those MBSs got traded, rather than eliminate the government’s ability to manipulate the loan markets in the future in exactly the same way that led to the crisis in the first place.

Now, of course, these entities are seeking more bailout money.

Government-controlled mortgage giant Freddie Mac has requested $6 billion in additional aid after posting a wider loss in the third quarter.

Freddie Mac said Thursday that it lost $6 billion, or $1.86 per share, in the July-September quarter. That compares with a loss of $4.1 billion, or $1.25 a share, in the same quarter of 2010.

This quarter’s $6 billion request from taxpayers is the largest since April 2010.

So, why is this pseudo-private corporation, which takes risks and then passes on its failures to taxpayers, paying out bonuses? Why does the White House think this is okay?

Why no outrage over what the Solyndra executives did THIS year?

Karen Alter, senior vice president of marketing, received two $55,000 bonuses on April 15 and July 8 of this year, on top of her $250,000 annual salary.
Ben Bierman, executive vice president of operations and engineering, received $120,000 in bonuses this year on top of his $276,000 salary.
Paula Camporaso, vice president of information technology — $80,000 in bonuses on top of her $107,000 salary.
Dave Sanat, vice president of supply chain — $80,000 in bonuses on top of his $111,000 salary.
Bill Stover, the company’s CFO who took the fifth before Congress at a September hearing, was awarded at least $120,000 in bonuses on top of his $367,000 salary.

And, gee, to whom do they donate, politically speaking? Since we "know" Republicans are the party of the rich, dishonest fatcats, surely the money goes to . . .

Ms. Alter’s recent political contributions, according to Open Secrets:

* Barack Obama, $2,300.
* David Sanders (D), $1,000.
* Alan Khazei (D), $3,000.

Ben Bierman, executive vice president of operations and engineering, received $120,000 in bonuses this year on top of his $276,000 salary.

Mr. Bierman’s recent political contributions, per Open Secrets:

* Barack Obama, $2,300.
* DNC Services Corp., $1,950.
* Democratic Congressional Campaign Committee, $1,950.
* Democratic Senatorial Campaign Committee, $2,750.
* Priorities USA Action, $500.
* Women Vote!, $250.

Paula Camporaso, vice president of information technology — $80,000 in bonuses on top of her $107,000 salary.

Dave Sanat, vice president of supply chain — $80,000 in bonuses on top of his $111,000 salary.

Bill Stover, the company’s CFO who took the fifth before Congress at a September hearing, was awarded at least $120,000 in bonuses on top of his $367,000 salary.

And, finally:

The document also reveals that Chris Gronet, one of Solyndra’s founders, was “transitioned to the role of adviser and consultant” from his position as CEO on July 1, 2011, and negotiated a severance package worth more than $450,000.

Mr. Gronet’s recent contributions:

* Barbara Boxer, $1,000.

I’m sure they all really appreciate your tax dollars.

No corruption here. Move along.

I had to go through two links before I got the amounts of the bonuses-12.1 million for the top 10 executives. Clearly, the reason the numbers were not specified because they are not shocking. There was no discussion of why they got bonuses other than they met modest goals. Compared to Wall Street bonuses that amount of money is comparatively small (over what amount of time--that's not clear, either). 12 million vs. 155 billion in compensation for Wall Street yearly, given me a break. And, of course, the usual lies in the links about what caused the financial crisis... Typical right-wing propaganda

And by the way, the idea that thousands of dollars in contributions would corrupt is a stretch. The U.S. Chamber of Commerce spends many millions to get Republicans elected. Millions not thousands--oh but those thousands donated to Democrats corrupt them but the millions spend to help Republicans get elected by the Chamber do not corrupt Republicans--yeah, right.

I'm with you on this DF. What do we do about it?

I came in this thread expecting images of cats.

I leave disappointed.

freeman2 wrote:I had to go through two links before I got the amounts of the bonuses-12.1 million for the top 10 executives. Clearly, the reason the numbers were not specified because they are not shocking. There was no discussion of why they got bonuses other than they met modest goals. Compared to Wall Street bonuses that amount of money is comparatively small (over what amount of time--that's not clear, either). 12 million vs. 155 billion in compensation for Wall Street yearly, given me a break. And, of course, the usual lies in the links about what caused the financial crisis... Typical right-wing propaganda

Let's see: an average of $1m each in annual bonuses to political hacks heading a corporation that is bailed out multiple times by taxpayers. That's fine, why exactly?

Because they only got millions vs. the billions of Wall Street executives?

Link? How many executives? How many of the corporations are being bailed out THIS FREAKING YEAR?

Right-wing propaganda? Because I'm against bonuses for executives of corporations feeding at the taxpayer trough?

Weird. I thought that's what OWS was supposed to be about.

You are as maddeningly inconsistent as ever.

To TheManInBlack: I apologize, but I would only post pictures of cats as roadkill.

I don't think I am being inconsistent, Steve. First of all, you are talking about an entity that is not a pure private entity and does not have complete freedom to taken any action they want to ensure profitability. In fact, that is not the purpose of Fannie Mae and Freddy Mac--they are designed to promote access of loans to homeowners by their purchasing of qualifying loans from direct lenders. I am not in a position to assess whether the particular executives did a good enough job to warrant bonuses. I do not think this is the same situation as the government saving a private bank or private corporation like AIG and those companies immediately paying bonuses. In any case, I am ok with the government as a condition of bailouts specifying that there should be no more bonuses.

The main problem I have with your post is that it detracts from the focus on the main villains in the financial crisis. Your links are trying to blame everything on the government for causing the financial crisis, implicitly shifting the blame from Wall Street, and indirectly attempting to prevent the reform of Wall Street. You have been attacking the Occupy Wall Street protesters as fringe leftists that do not have the support of the majority of Americans. I disagree with you, I think there is a lot of anger against Wall Street out there, but certainly a keep component of whether the average American will support the protesters is what they believe caused the Financial Crisis. And here the links that you cite are erroneously claiming that it was Fannie Mae and Freddy Mac that caused the crisis. So, whatever the merits of the criticism of the bonuses there is a much larger issue here (who causd the crisis) that i am not going to ignore.

Freeman, are you saying that government policies relating to FNMA and Freddie Mac and housing policy in general had no role in the financial crisis?

freeman2 wrote:I don't think I am being inconsistent, Steve. First of all, you are talking about an entity that is not a pure private entity and does not have complete freedom to taken any action they want to ensure profitability.

I know this. It is a "pseudo-private corporation" as I said in my initial post. It really is the perfect model for what Obama has sought to do in green energy: public risk, private benefit. Taxpayers get hosed; rich, well-connected fatcats walk away unscratched.

In fact, that is not the purpose of Fannie Mae and Freddy Mac--they are designed to promote access of loans to homeowners by their purchasing of qualifying loans from direct lenders.

That is not entirely correct. I have highlighted the errant word. One of the problems, not the only one, was that unqualified people (no verifiable income) were put into homes they could not afford. On the Left, this is called "predatory lending." On the Right, we call it "government enforced stupidity." Who loans money to people they know can't afford to pay it back? That's not "predatory," it's dumb.

I am not in a position to assess whether the particular executives did a good enough job to warrant bonuses.

Yes you are. Let me help you:

WASHINGTON — Government-controlled mortgage giant Freddie Mac has requested $6 billion in additional aid after posting a wider loss in the third quarter.

Freddie Mac said Thursday that it lost $6 billion, or $1.86 per share, in the July-September quarter. That compares with a loss of $4.1 billion, or $1.25 a share, in the same quarter of 2010.

This quarter’s $6 billion request from taxpayers is the largest since April 2010.

Freddie’s losses are increasing mainly for two reasons: Many homeowners are paying less interest because they are able to refinance at lower mortgage rates. And failing and bankrupt mortgage insurers are not paying out as much money when homeowners default.

The government rescued McLean, Va.-based Freddie Mac and sibling company Fannie Mae in September 2008 after massive losses on risky mortgages threatened to topple them. Since then, a federal regulator has controlled their financial decisions.

So, does an irresponsible corporation, in ongoing risk of failure and relying on taxpayer bailouts, have the right to give bonuses to those in charge of its continuing failure?

That is EXACTLY what Obama railed about a few years ago. It is EXACTLY what OWS is complaining about. So, what's the problem?

I do not think this is the same situation as the government saving a private bank or private corporation like AIG and those companies immediately paying bonuses. In any case, I am ok with the government as a condition of bailouts specifying that there should be no more bonuses.

Why? Because the goal was "noble?"

Who cares what the goal is if it's a constant failure? Should failures receive bonuses? I thought that was for doing a good job--or is this like AYSO soccer: no one wins, we all just participate? If that is your view, I want to work as an executive there for a year so I can do a lousy job and get my million bucks. Can I sign up?

The main problem I have with your post is that it detracts from the focus on the main villains in the financial crisis.

Once again, you miss by a mile. This forum is about one thing: the outrageousness of giving bonuses to executives of an enterprise that is an ongoing failure. Taxpayers are subsidizing those bonuses. It ought to be a crime. The President ought to be exercised about it, but he's too busy campaigning for reelection to do his job.

Your links are trying to blame everything on the government for causing the financial crisis, implicitly shifting the blame from Wall Street, and indirectly attempting to prevent the reform of Wall Street.

This forum has nothing to do with that. Go to the OWS to disagree with me about OWS.

You have been attacking the Occupy Wall Street protesters as fringe leftists that do not have the support of the majority of Americans.

And, I've posted evidence that they don't have that support.

And here the links that you cite are erroneously claiming that it was Fannie Mae and Freddy Mac that caused the crisis. So, whatever the merits of the criticism of the bonuses there is a much larger issue here (who causd the crisis) that i am not going to ignore.

Feel free not to ignore it. It's just not the thrust of my argument here. Let me be clear: if you are against Wall Street "greed" and the bailout of Wall Street, you have to be against this. That is my argument. This isn't a matter of who started what or who is responsible for the meltdown. This is very simply: how can anyone justify these people receiving bonuses when the quasi-private corporations they head are basketcases in constant need of federal dollars?

I understand Fannie Mae and Freddy Mac are not doing well. However, I don't know what the bonuses were given for. What I read is that they were given bonuses for meeting certain goals--I don't know what those goals were. At the end of the day the fact that this is a quasi-government entity makes it different than a private entity that gets saved by the government and then starts paying large bonuses. You're probably right they shouldn't have got those bonuses, but the only remedy at this point is to stop paying bonuses in the future.

And I suspect that these bonuses are part and parcel of the culture on Wall Street and the corporate world where they think they are entitled to enormous wealth for doing modest amounts of work. I saw where some billlionaire investor who got 11 eleven years for insider trading. But there was a conversation he had about a tip he got from someone who sat on a corporate board and this hedge investor was saying that this board member was changing jobs so he could go from being a hundred millionaire to a billionaire without doing much work. Oh go from being only being worth hundred million to a billionaire--no big deal.

Our society is going off the tracks because it is excessively rewarding a few percent of society with enormous wealth (athletes, entertainers, CEOs, Wall Street traders, hedge fund managers, yes some lawyers, etc.., etc.) while many hard-working Americans are falling behind. Justice, at least to me, means giving people what they deserve, what they have earned. So, for instance, if a person is able but has never worked then they are taking more from society than they deserve. There are many people that make a lot of money and deserve it. But many more do not. Our economic system right now is doing a very poor job of rewarding people appropriately for their contribution to the wealth created in society. Basically, this is a zero sum game and the wealth these millionaires and billionaires are taking is wealth that could go to middle-class workers. That is what used to happen, but due to the conservative counter-revolution they want just to take more and more of the wealth created and pay less taxes. While this is going on Republicans bamble on about don't tax the "job creators." These people are just as parasitic as a person who could work but gets payments from the government. Instead of having an economy where you accrue wealth over a long period by modest increases in wealth we are moving to a "lotto" economy where a few stirke it rich while the rest of society stagnates.

steve

Feel free not to ignore it. It's just not the thrust of my argument here. Let me be clear: if you are against Wall Street "greed" and the bailout of Wall Street, you have to be against this. That is my argument. This isn't a matter of who started what or who is responsible for the meltdown. This is very simply: how can anyone justify these people receiving bonuses when the quasi-private corporations they head are basketcases in constant need of federal dollars?

Its a very good question. I bet they justify the bonuses by saying that they need to pay competitive wages to get the best talent. Thats the same reason bailed out financial companies paid "retention bonuses" to executives to keep them from leaving the companies. Which struck me as odd. Why you'd want to keep the crew that screwed up...?
Steve's right. Executive compensation is all screwed up at financial corporations specifically. And generally for CEO's and other executives. And that includes Fannie and Freddie.
Get thee to the barricades Steve!!!

freeman2 wrote:I understand Fannie Mae and Freddy Mac are not doing well. However, I don't know what the bonuses were given for.

Who cares?

Would you say the same about Wall Street firms or banks bailed out by the government? Suppose they received billions in aid, then gave out millions in bonuses. Would you say, "I don't know what the bonuses were given for?" In other words, under what circumstances would said bonuses be "okay?"

I suspect the answer is "none." So, why the difference? These are failing corporations. If you run a corporation into the ground, you should not get a bonus--period. I don't care if it's Goldman Sachs or the Salvation Army.

At the end of the day the fact that this is a quasi-government entity makes it different than a private entity that gets saved by the government and then starts paying large bonuses. You're probably right they shouldn't have got those bonuses, but the only remedy at this point is to stop paying bonuses in the future.

Well, no, there is another: make them fully private OR prohibit bonuses, period, if these corporations are not over a certain threshold of profitability. The argument is they need to pay these bonuses to keep "talent."

Um, anyone can run a corporation at a loss. It takes little talent to rely on the government for bailout after bailout.

Stop the madness!

Tue Nov 8, 2011 7:29pm EST

(Reuters) - Fannie Mae, the biggest source of money for U.S. home loans, on Tuesday said it needed a further $7.8 billion in federal aid to stay afloat as a shaky housing market widened its third-quarter loss to $5.1 billion.

The government-controlled firm also attributed the deeper cash drain to losses on derivatives used to hedge its exposure to interest-rate swings and on expenses related to home loans made prior to the 2008 financial collapse. In the year-earlier quarter it had a loss of a $1.3 billion.

Fannie Mae has now drawn $112.6 billion in bailout funds from the Treasury Department since being seized by the government in 2008 as mortgage losses mounted, and it has returned $17.2 billion to taxpayers in the form of dividends.

freeman2 wrote:Our society is going off the tracks because it is excessively rewarding a few percent of society with enormous wealth (athletes, entertainers, CEOs, Wall Street traders, hedge fund managers, yes some lawyers, etc.., etc.) while many hard-working Americans are falling behind. Justice, at least to me, means giving people what they deserve, what they have earned.

That would be a great forum topic. Here's the problem: "society" doesn't reward a few percent. They are skilled, work hard, or get lucky--or some combination thereof. I personally don't want a USA where wages/rewards are dictated by some Nixonian scale.

So, for instance, if a person is able but has never worked then they are taking more from society than they deserve.

Wow! So, you're against welfare and contrived "disability" layabouts? How conservative of you!

There are many people that make a lot of money and deserve it. But many more do not.

Who gets to decide what is "deserved" and what is not? Under capitalism, it is not the State. Are you going to be the arbiter?

Basically, this is a zero sum game and the wealth these millionaires and billionaires are taking is wealth that could go to middle-class workers.

That is a socialistic view. The idea that the pie is fixed is a socialistic view. The idea that "the man" is keeping others down is a socialistic view. The truth is that anyone can become wealthy. It's really not hard. If you work, spend less than you make, save, and invest, anyone can do it. The problem is that Americans believe they ought to have everything without sacrifice, so credit has become a way of life. Credit equals debt. Debt reduces or eliminates savings. Lack of savings creates dependency on government. Dependency on government creates an rich versus the rest of us mentality. I am not yet rich, but I can see it from here. All it took was a willingness to work, spend less than I make, save, and invest. I have never been out of the middle class, but I started in poverty. It's not impossible, but it takes work.

These people are just as parasitic as a person who could work but gets payments from the government. Instead of having an economy where you accrue wealth over a long period by modest increases in wealth we are moving to a "lotto" economy where a few stirke it rich while the rest of society stagnates.

Rubbish.

Steve Jobs hit the lotto? Was he sitting in his garage, minding his own business when a PC assembled itself? Did the iPhone show up at his door?

Your socialistic worldview is not reality. Hard work and sensible living pay off. Hard work and ingenuity can lead to vast wealth. The pie is always growing; it is not fixed. Anyone who tells you otherwise has his head filled with Marx.

The continuing bailouts of FNMA are scary. Basically they come to the Feds on a quarterly basis and say how much they need. I think we have a lot of quarters, and billions of dollars to go before the end of it. At least with the private sector bailouts it is over (as far as I know).

Umm FNMA is a private sector bailout.

Neal Anderth wrote:Umm FNMA is a private sector bailout.

yes and no ... it is still alive because Congress is trying to figure out a replacement housing policy and doesn't want to put the kabash on FNMA until it does. I do take your point that hypothetically if there were profits they would go to the shareholders.