Fan­nie/Fred­die bailout

The Covington News - - Opinion -

This week the U.S. gov­ern­ment seized con­trol of the two largest mort­gage com­pa­nies in the coun­try — Fan­nie Mae and Fred­die Mac.

While we’re glad the trea­sury depart­ment fi­nally ad­dressed the fail­ing real es­tate mar­ket with action and thereby averted the com­pa­nies’ com­plete fail­ure, which would have re­sulted in a cat­a­strophic eco­nomic de­pres­sion with global im­pli­ca­tions — there is still a long road to hoe.

Amer­i­can, Euro­pean and Asian mar­kets have seen a bit of a rally in the stock mar­ket, but that doesn’t mean the loom­ing bank cri­sis has been com­pletely avoided. Banks in New­ton County have al­ready been hand­ing work­ers pink slips.

What trou­bles us at the mo­ment is the fact that what Fred­die and Fan­nie owe could cost Amer­i­can tax­pay­ers bil­lions of dol­lars while the de­part­ing heads of the com­pa­nies re­ceive mil­lions in sev­er­ance pack­ages.

The New York Times re­ported the two com­pa­nies have spent $180 mil­lion dol­lars in the past two decades on lob­by­ing ef­forts to per­suade politi­cians to sup­port reg­u­la­tions that al­lowed the most re­cent two ex­ec­u­tive of­fi­cers to earn a com­bined to­tal of $29.5 mil­lion in the past five years.

Sev­er­ance pack­ages for the two men are ru­mored to to­tal $13.4 mil­lion. Does it make sense that the cor­rupt in­di­vid­u­als which have cost thou­sands their homes and oth­ers se­verely low­ered re­turns on their in­vest­ments are re­warded?

We say no — they shouldn’t re­ceive a dime. It’s time the fat cats in their po­si­tions start drink­ing skim milk.

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