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.