Sure, a CEO might lose his job (but, usually not). If a CEO fails and does lose his job he is usually rewarded with a handsome seven-or eight-figure severance package, irrespective of the losses to shareholders and consumers.
The chief executive of the mortgage giant Freddie Mac rejected internal warnings that could have protected the company from some of the financial crises now engulfing it, according to more than two dozen current and former high-ranking executives and others.
That chief executive, Richard F. Syron, in 2004 received a memo from Freddie Mac’s chief risk officer warning him that the firm was financing questionable loans that threatened its financial health.
Today, Freddie Mac and the nation’s other major mortgage finance company, Fannie Mae, are in such perilous condition that the federal government has readied a taxpayer-financed bailout that could cost billions. Though the current housing crisis would have undoubtedly caused problems at both companies, Freddie Mac insiders say Mr. Syron heightened those perils by ignoring repeated recommendations.
See, At Freddie Mac, Chief Discarded Warning Signs, at nytimes.com.
The mortgage finance company failures are particularly troublesome because not only do shareholders lose their money, but millions of working-class, er, sorry . . . , middle-class Americans lose their homes.
I am hard-pressed to believe there was not criminal intent at the highest levels of Freddie Mac and Fannie Mae, Bear Stearns, and KPMG. I think these people knew exactly what they were doing once the financial industry was deregulated. I think they knew they could make bad decisions with impunity. and walk away with millions (billions?) of taxpayer dollars, leaving five percent of the American public without homes.
The media and the elected officials, of course, focus the story on the taxpayer bailout: what is the government going to do about it, and nobody is focusing on the long-term problem of regulating these guys.
I believe there should be no bail-out. I think the real estate and home mortgage markets should be left to do what they will. The "conservatives" always talk about the market self-regulating, and I think this is the time to test that.
Of course, Americans will ignore all the signposts that show we are addicted to interest and money, and they will vote for more Republicans, who will dig us deeper into this mess. And as government regulation is gutted, and consumer protections disappear, we can watch our tax dollars flow into the pockets of corporations who have no intention of playing fair.
When will somebody stand for change?
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