Height of Chutzpah
On October 3rd, Business Week published an Associated Press article on the compensation package for the new Freddie Mac Chief Financial Officer, Ross Kari. Mr. Kari was presented with a package "worth as much as $5.5 million. That includes an almost $2 million cash signing bonus and a generous salary that could top $2.3 million" according to the AP. (see link below) The article goes on to explain that the generous pay package was established to be competitive with the other financial sector jobs presumably available to Mr. Kari.
You remember, Freddie Mac surely. The government-controlled mortgage lender that played a heavy hand in the financial crisis; the crisis the President is single-handedly trying to "mop" up. The same Freddie Mac that provided a seat on its board of directors for Rahm Emanuel (see October 16th, 2009 blog entry: Never Let a Good Crisis Go to Waste) and contributed gobs of money to the Obama campaign. You know, the one that was riddled with fraud. The one whose former CFO was found dead in April of an apparent suicide. Perhaps that is why Mr. Kari is being paid such a hefty sum to replace him. A form of hazard pay, if you will.
Freddie Mac's lending policies helped justify the latest $800 billion stimulus package, on top of the hundreds of billions of dollars allocated through the two or three (who can remember?) previous stimulus plans approved during the Bush Administration. The stimulus package was needed because the financial crisis was severe we were told and that led to the bank and auto company take-overs, that led to Pay Czar, Ken Feinberg slashing executive compensation. Oh don't worry not OUR compensation, just the compensation of those executives who took government money.
So sweeping were Feinberg's pay cuts that some private-sector, financial executive salaries will be slashed by 90%. Ken Lewis, the soon-to-be-former CEO of Bank of America will apparently have to give his entire 2009 salary back. Ken Feinberg suggested that too, bless his heart. Apparently Mr. Feinberg is so powerful his decisions, according the President, have been made without Mr. Obama's knowledge or approval. Imagine that. A government official who serves at the pleasure of the president, who is not only not accountable to him but neither is he accountable to the limits of the Constitution. It is difficult, I acknowledge, but try to imagine it. A sort of Reverend Wright of the Treasury. Obama's knows him he just doesn't know what he is doing.
Anyway, as usual, not only is this Administration grabbing the liberty and private property of private citizens, they are doing so at breakneck pace with no regard for the consequences of their actions. Governor Patterson of New York had it right when he accused the Adiministration of cutting about $1 billion in income tax out of the New York state treasury when Feinber slashed financial exec salaries. Ooops. Oh well, the Administration doesn't want Governor Patterson to be governor any more anyway. This should push what's left of his approval ratings over the cliff. Two birds with one Feinberg stone.
And for those of you who are sympathetic to Feinberg's pay cuts because these companies took tax money--which we all know is money out of our own pockets--and therefore the government has the right to dictate their pay, think again. Thousands like me have received government money. Mine came in the form of a government sponsored scholarship to attend college in the 1970's and no one ever told me where to go to school or what to major in. They let me decide. If we follow the Feinberg logic then we would have to take a hard look at the salaries of our elected officials. We might have to confiscate the pay packages of those involved in the financial crisis, starting perhaps with the Senate or House Finance Committee (maybe with, oh I don't know, say... Barney Frank?).
These folks are not smarter than us. They do not have proven resumes in running anything for a profit or for a profit while abiding by the onerous taxes and massive regulation they impose on the private sector--especially small businesses. They have no Constitutional authority to do what they are doing.
And what's with all the finger wagging? Mr. Feinberg, Rahm, Msssss. Pelosi, Harry the Horse and the Fiddler-in-Chief...they're always wagging their fingers at us.
As the King Fiddler says: what's up with that?
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