President Obama said that the bonuses paid to top Wall Street executives at the banks receiving TARP money are "shameful." Unfortunately there is little that he can do about these bonuses. However, if President Obama wants to take a stand against outrageous compensation in failed financial companies receiving government money, he has an opportunity right here in Washington. Fannie Mae recently reconstituted its board of directors, announcing that its directors would get $160,000 each, with the chairman getting $290,000. Those sound like pretty good paychecks for jobs that are very part-time, almost certainly involving less than a few hundred hours a year. Furthermore, it is questionable whether these directors are an especially talented group. Three of them are holdovers from the board that watched Fannie slip into bankruptcy. Since Fannie Mae is now under conservatorship, President Obama has considerable ability to affect the pay of its directors. Reporters may want to ask him whether he will take the opportunity to restrain compensation in a situation where he actually has the authority to do so, rather than just complaining about compensation in a situation where he has no authority.
--Dean Baker
