- Written by JGusty on Wednesday, September 24, 2008 3:29 - 1 Comment

Nationalizing Banks?

Not too long ago, the Bush Administration facilitated the nationalization of two enormous banks… Fannie Mae and Freddie Mac.

There are at the very least two enormous points of discussion here:

1. Fannie Mae’s Daniel Mudd and Freddie Mac’s Richard Syron stepped down but are helping with the transition of their companies into federal conservatorship under the Federal Housing Finance Agency. The agency has not said how much they will earn in their new roles.

Mudd earned $11.6 million last year, and Syronmade $18.3 million. In both cases, a large portion of their pay packages included stock that was valued much higher at the end of 2007 than it was as of Sept 8th, when it was trading at less than $1 a share.

By conservative estimates, Mudd, 49, and Syron, 64, will leave with an additional $7.3 million and $6.3 million, respectively, as part of a severance package, according to an analysis by Paul Hodgson at the Corporate Library.

“Had they left at the end of December, they both would have walked away with more than $20 million, but the drop in the stock price has had a dramatic impact,” said Hodgson, a senior research associate. “It’s still a substantial payoff for an executive who has managed a company so badly that the federal government has had to step in and save it.”

Simply put… these two were rewarded for failure. The dollars that they both received in their severance packages came from somewhere. Contracts are contracts. Understood. But don’t you think the money they did receive could’ve been applied to the situation at hand.

Because, as usual… guess whose paying the final bill?

Where is the public outcry? Hell… where are the lynchings! (semi-kidding)

2. Banks under federal control. Now we are being handed even more federal bail-outs. Do most folks realize that technically… the federal government doesn’t have any money in which to bail-out anyone out of anything?!?!?

They either print more currency (ummm… inflation anyone?) or they utilize tax money. (ummm… gee… wonder where they got that?)

When other countries federalize banks, we call it Communism/Socialism or worse.

Why is this OK?

Pitchforks and a road-trip to DC anyone?

 

CATEGORY: Politics