Little or No Consequences for Bad Management

The Los Angeles Times reports this morning that the CEOs of Fannie Mae and Freddie Mac are stepping down with millions in their pockets--not the $20 million severance packages they might have received had they left their posts in December, but still. . . . millions for bad management.

Daniel Mudd, CEO of Fannie Mae, will leave with at least "an additional $7.3 million" and Richard Syron, CEO of Freddie Mac, will receive at least $6.3 million as part of his severance package. And these were the guys who were brought in to reform these institutions! Instead, they "presided over major expansions of the companies' reliance on risky mortgages that ended up going into default over the last two years."

Evidently, Barack Obama has sent a letter to Treasury Secretary, Henry Paulson, Jr., and the housing agency director, James Lockhart, criticizing these payments:

"Under no circumstances should the executives of these institutions earn a windfall at a time when the U.S. Treasury has taken unprecedented steps to rescue these companies with taxpayer resources," Obama wrote.

I suspect that it will be business as usual, unfortunately. The rich, the powerful, and the powerfully-connected don't suffer consequences like the ordinary guy. Even George Bush, who has presided over an expanding government, a mismanaged war, and the de-valuation of American ideals (torturing enemies, expanding executive power in unprecedented ways, diminishing the power of the rule of law), will leave office with little consequence. And if recent polls are any indication, the Republican Party, which led for six years with this debacle of a presidency, may be rewarded for their divisive role in the latest campaign. Good times.