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Fannie Mae: President Obama's Opportunity to Cut Outrageous Pay in the Financial Sector
President Obama said that the bonuses paid to top Wall Street executives at the banks receiving TARP money are "shameful." Unfortunately there is little that he can do about these bonuses. However, if President Obama wants to take a stand against outrageous compensation in failed financial companies receiving government money, he has an opportunity right here in Washington.
Fannie Mae recently reconstituted its board of directors, announcing that its directors would get $160,000 each, with the chairman getting $290,000. Those sound like pretty good paychecks for jobs that are very part-time, almost certainly involving less than a few hundred hours a year.
Furthermore, it is questionable whether these directors are an especially talented group. Three of them are holdovers from the board that watched Fannie slip into bankruptcy.
Since Fannie Mae is now under conservatorship, President Obama has considerable ability to affect the pay of its directors. Reporters may want to ask him whether he will take the opportunity to restrain compensation in a situation where he actually has the authority to do so, rather than just complaining about compensation in a situation where he has no authority.
--Dean Baker
COMMENTS (5)
Dean, I just finished your latest, Plunder & Blunder, & was pretty surprised you left out any mention of the Boskin Commission hearings and the general silence of academic Economists. It deserves remembering, cutting the cpi such a huge amount (in % terms) had enormous impact on our economy AND that you were right (& one of very few Economists who called this to the attention of anyone who cared.) Unfortunately, too few did.
Posted by: bailey | January 30, 2009 7:58 AM
Fannie Mae recently reconstituted its board of directors, announcing that its directors would get $160,000 each, with the chairman getting $290,000. Those sound like pretty good paychecks for jobs that are very part-time, almost certainly involving less than a few hundred hours a year.
Outrageous! Why are Obama and congress not stopping this?
Maybe they should have been allowed to fail.
Posted by: Floccina | January 30, 2009 9:04 AM
Dean,
Great work. Love your writing.
Posted by: Ron Alley | January 30, 2009 10:28 AM
Dean,
I missed your comments about how the "Bad Bank" idea was a horrible idea. Maybe you could direct me to them.
Posted by: mmckinl | January 30, 2009 2:25 PM
Alert! "Bad Bank" Moving Forward ~ CNBC
The "Bad Bank" or "Aggregator Bank" Plan is nothing less than using tax payer money to bail out the greed and fraud of Wall Street Banks!
We need Nationalization of the banks to get a hold of the crisis and hold shareholders, bond holders and especially management of these banks and pay the piper for their catastrophe.
The "Bad Bank" will consume over a trillion dollars of tax payer money, and probably much more. Recent estimates of the losses top $5 trillion and as the economy nose dives it will only get worse! It will put in jeopardy all government spending such as SSI and Medicare !
Call, write and phone Congress today then tell your friends!
Congressional Lookup By Zip
Stop the "Bad Bank"
Posted by: mmckinl | January 31, 2009 4:52 PM