Part-Time Government Employees Earn $160,000 a Year
I hate to play scrooge on Christmas, but $160k for part-time work seems a bit steep. The WAPO reported this would be the pay for Fannie Mae's new 10-person board of directors today.
The remarkable part of this story is that the Washington Post did not cite anyone in this piece who raised a question about the compensation levels for the board. Keep in mind that this is a newspaper that is absolutely apoplectic over autoworkers getting $27 an hour. If we assume that the board members on average will devote 500 hours a year to their duties, this puts their pay rate at $320 an hour.
If this board kept the mortgage giant from doing really stupid things, like taking on risky real estate loans in the middle of a housing bubble, then perhaps they would be worth this pay. But none of the new members were especially visible among those warning of the housing bubble, and several board members are carryovers from the prior board, which apparently slept through the housing bubble and Fannie's collapse.
Given the amount of ink that the Post has devoted to the question of whether autoworkers at the Big Three are overpaid, it is incredible that this issue was never even raised in the context of Fannie's new board.
Here's another question I haven't heard: How does compensation for US automakers' managers and VPs, as an aggregate, compare to Toyota? I know the CEO makes roughly 1/10 of the US counterpart. But what is the pay scale in US middle management, and is there way too much of it?
December 25, 2008 10:54 AM | Reply | Permalink
And yet, another question:
How much of the billions we have gifted to Wall Street has been taken up in bonuses and severance and other compensation packages for the executives who are perhaps most responsible for getting us into this mess?
The answer? We don't know because this money was gifted to them with no strings attached. We therefore don't know and it appears that the Execs think it is poor form for us to ask.
But I'll bet this figure exceeds the $15 billion LOANED to the Big Three to keep an entire industry afloat and maintain family supporting jobs for the middle class.
And yet the GOP, in particular, says we should be outraged at the loan of $15 billion to Detroit while accepting the same or greater amount of money being gifted to these highly paid, failed executives in the financial sector.
Yup! And now Paulson asks us to turn over the next $350 Billion for the financial sector. Just in time for Christmas/New Year's bonuses, I guess.
December 25, 2008 12:39 PM | Reply | Permalink
Sleepin it is like a magic act on the street or a scam like hide the pea.
Did you how Cox at the SEC swears up and down neither he nor his agency did anything wrong.
Or how Paulson worked with Madoff.
Outrage is not enough.
December 25, 2008 1:25 PM | Reply | Permalink
This is government run as a black-tie charity by a self-serving elite of government concession-tenders, now, with Racial Tokenism re-labled as Affirmative Action! These individuals are not proficient or patriotic.
But, I think you will find that they are well-connected contributors to the DLC/DSCC/DCCC.
If the Democratic Party continues to countenance such outlandish corruption and betrayal of its alleged "values", all the while hand-wringing over a middle-class that our political elite have nothing but contempt for, we -- I are one! -- are going to get frog-marched to the electoral gallows by a red-hot resurgent GOP in a Gingrich-type campaign by 2010.
Did Barack Obama just get elected or was it that Credit-to-his-Race and former Country Club waiter Andrew Young?
Just asking...
December 25, 2008 12:07 PM | Reply | Permalink
I keep wondering when the outcry will begin about how our current economic mess is a total condemnation of capitalism. It is just that, you know.
Do you realize that the "financial sector" of the economy was about 1/6th, as I recall, of the total economy, and by any rational analysis that "sector" is a parasite on the real economy. It absorbs money, but produces nothing. And, as long as we stick with capitalism as the only form of economic system we will consider using, we will always have our parasitic sectors of the economy.
Corporation boards are also parasites. They have a theoretical purpose, but their real purpose is simply to provide more money to the moneyed class. The original purpose of a corporate board was to be a group of significant stock holders, who looked after their, and their fellow investors interests in the corporation, which they owned. Today most board members own only token amounts of stock in that corporation, but most are also CEOs of other corporations with a major interest in keeping their and their fellow CEOs compensation as high as possible. Pure parasitism.
These types of problems will only be solved as we move away from poorly regulated capitalism and towards more socialism. I'm not holding my breath waiting for this to happen, since we don't even seem able to grasp the need for a socialistic health care system.
December 25, 2008 9:56 PM | Reply | Permalink
Well said Hoppy.
December 26, 2008 4:25 AM | Reply | Permalink
According to Robert Reich, America's financial sector in the '70's and '80's was one fifth as big as the total profits of America's non-financial firms. After 2000 it was about one half as big. At this point it's obvious that the financial sector has become a behemoth which now threatens to impoverish the rest of us and we're helpless to stop it.
Capitalism has been described as "creative destruction" best epitomized by hedge-funders who are nothing but predators targeting the weak and infirm.
December 26, 2008 12:26 PM | Reply | Permalink
Parasites is such a mild term. I'd say blood-sucking, pestilence spreading, ticks, boils on the butts of humanity... I could go on-- and will--with the slightest encouragement.
December 26, 2008 3:45 PM | Reply | Permalink
Hoppy,
Shhhhhhhhhhhhh!
You don't want to spoil things for the fat cats and the politicians that do their bidding now do ya? If we keep the people distracted they won't notice the man behind the curtain.
December 26, 2008 3:55 PM | Reply | Permalink
While I agree with your premise that we should have more options, I would argue that we have had just that for some time. I would even argue that we (the federal government) is proving it as we bemoan it.
The question is more about the execution or operation of this system. I hope the backlash is not too strong. Capitalism does have its value.
December 29, 2008 2:12 AM | Reply | Permalink
Where do I apply for this job? I have some spare time and would be happy to squeeze this into my schedule. :)
December 26, 2008 3:53 PM | Reply | Permalink
Why would anyone be surpirsed by this when such funds usually come from any one of a number of government slush funds. There are literally trillions of dollars that our governmnet never informs the public about, but now the truth is bubbling to the surface. Watch the entire vedio to understand the con game that has been played for decades.
http://www.brasschecktv.com/page/512.html
Where all the money goes
Two sets of books
The government take over
of the US economy
This video was originally produced on January 8, 2000 by Walter Burien.
The government, at all levels, is running a very simple financial con game.
If something produces revenue - like bridges, highways, ports, or successful investments etc - that revenue goes into off budget slush funds.
If it costs money, it's charged to the public via taxes.
This is being done at all levels of government - including state, county, city, and school districts.
The total "off budget" funds held by the various governments amount to trillions of dollars.
The real accounting is contained in what's called Comprehensive Annual Financial Reports (CAFR) which are not only not made available to the public, their very existence is never mentioned by the news media.
Why?
Trillions of dollars pays for a lot of corruption.
Every time an elected official stands before you and tells you the government is out of money and they have to raise taxes, he or she is lying through their teeth.
www.brasschecktv.com/page/512.html
December 26, 2008 10:18 PM | Reply | Permalink
I have to agree with many of the former comments. I think an insightful book I've read on Economics is "The Dilbert Principle" by Scott Adams. He is stating that the real value created for corporations is done by a well-educated and smart middle class. Basically, corporations are not run by the Senior Management, but by a very smart middle-management and highly skilled workers. Senior management consists of individuals who are skilled at taking credit for success accomplished by underlings. It's been my experience that this is absolutely true. Just think of all the productivity accomplished by programmers, skilled administrators, and engineers. Furthermore, this is done despite the ineptitude of Senior Management. So, therefore the CEOs, CFOs, CIOs by and large steal value from the corporations and society by a)taking huge compensation that should have been invested back into the business, and b) creating a group-think mentality that hampers innovation and smart risk taking. I also think I have to agree that the financial game-playing, like derivatives and hedge funds, on Wall Street is also a method of stealing value from corporations, governments and individual personal wealth.
December 27, 2008 10:36 AM | Reply | Permalink
I like to look at it as an eco-system. Hopefully the current wave of change will result in better run companies with ahem real purpose.
One could make many arguments as to what makes "real" but hopefully this current of change will also facilitate smarter consumers (er... humans)
December 29, 2008 2:16 AM | Reply | Permalink
What good managers do is hire good people, set up goals and reward structures to keep them on task and working together, and plow the road ahead of them to make sure that nothing is in their way. Part of plowing the road is firing the people who are not contributing to the success of the organization. The average worker should think they did it themselves, and they do. Anyway, that requires a respect for work, a long term plan, and an ego that is under control. Very few MBA's are also good managers, and American corporations no longer seem to value the management skills that make for long term success.
I am recalling a construction project I managed some years ago, during which one of our larger contractors suffered five changes in senior management during the three year contract duration, all occasioned by Wall Street takeover struggles. The middle managers literally did not know who they were working for. We eventually fired and sued the company (we won, but the money was not enough). The company is a shell of its former self, although I am sure that money was made as it dissolved. What Wall Street generally does is so far removed from management that describing it that way is simply laughable.
December 29, 2008 9:12 AM | Reply | Permalink