The Bailout

Over the weekend I have been bothered by the "pig in a poke" nature of the bailout for financial institutions proposed by Treasury Secretary Paulsen. In the coverage this morning Speaker Pelosi argues for some deliberation before adopting a blank check that would be larger than our commitment in Iraq. I think caution is justified. Among other suggestions, she says she would want to put some limits on "excessive executive compensation." I wonder if that includes the rather lavish "retirement" package given to the head of Fannie Mae. Franklin Raines was a significant part of the reason for all the uncertainties in the financial markets - his fast and loose use of standards in running his government sponsored enterprise helped to bring about the frenzy that we are being asked to cover for - yet he has a huge pension and health benefits for life. (Note: according to press reports his pension is $1.3 million per year for life - plus health benefits and life insurance.) By any standard that is an absurdly generous package which should be included in Pelosi's net. The democrats have been big supporters of Fannie and Freddie and have consistently rejected calls to reign in the free and loose practices of these bodies. Note: Raines has already collected more than $5 million from this bonanza. His total service to Fannie Mae (if you can call what he did as service) was less than 10 years. By any account that is a pretty rich package.