GSE Executive Pay: Hang 'Em High, the Pols Say

The politicians in Washington are outraged at the pay packages the head honchos at Fannie Mae and Freddie Mac have been receiving. On Wednesday Financial Services Committee Chairman Spencer Bachus introduced a bill that would “suspend the compensation packages” of these very same top executives. “The taxpayer-funded bailout of Fannie Mae and Freddie Mac is the biggest bailout in history,” said Bachus. “The fact that the top executives of these failed companies are receiving multi-million dollar pay packages, plus millions more in bonuses, is an added insult to the taxpayers who are forced to foot the bill.” In a way Bachus is right -- but keep in mind that Fannie and Freddie – two giant thrift institutions with plenty of derivatives on their books – are complicated entities with billions of dollars in assets and trillions of dollars in guarantees. The men and women currently running the GSEs are not the people who tanked them back in 2008. I’m not sure where Bachus is going with his bill, but if he thinks he’ll find a decent CEO for say, $200,000 a year, he’s absolutely dreaming. Hey, maybe a bus driver can run them? Also, maybe Bachus hasn’t noticed but there’s been a brain drain of talent at the GSEs the past two years…