As much as it sucks, we still have to pay the contracts they signed

Monday, September 15, 2008

When I first heard about the giant “golden parachutes” that were supposed to go to the CEOs of Fannie Mae and Freddie Mac - in the neighborhood of $10 million each - I was pretty mad. After the government stepped in to bail them out, we, the taxpayers, were on the hook for these ridiculous firing bonuses. These two men had been in charge of the two companies when it was decided that they couldn’t go on without a government bailout - even if they didn’t start the practices that led them here, they certainly must have been aware of what was going on. Now, after their mismanagement and incompetence, taxpayers were going to pay them more than most of us will make in a lifetime. But then a friend pointed out that we can’t pick and chose which employee payments get made when disaster happens. The government has just stepped in and said, “We’re renegotiating the employment contracts retroactively because it’s too much money”. Partly I’m torn. It is really infuriating that these guys will get so much money for utterly failing at their jobs. It’s infuriating that we’ll have to pay for it. But it’s not the government’s place to come in and change the game at this point. Yes, the government is paying some or all of the bills. But if we wanted that sort of control over what happened at Fannie and Freddie, we should have created the Department of Secondary Mortgages. Then the “CEOs” would be appointees and we could make political statements and fire them without resorting to just telling them that the legal contracts they signed are null and void just because we say so.

Posted in: complaint , disaster , economics , politics