More Welfare for Subprime Lenders

Most of the Bush Administration’s policy-related decisions have been unmitigated disasters.  Therefore, it comes as no real surprise that the current state of our economy is a direct result of it.  However, Bush and his cronies continue to protect only the financial institutions that caused this mess while leaving consumers completely out in the cold.  MSN Money’s John Marman reports in Why the Fed cuts won’t help you.  From the article:

In its efforts to keep irresponsible bankers on Wall Street afloat, the Federal Reserve is spurring inflation, crippling the dollar and cutting into retirees’ incomes. And mortgages and car loans won’t get any cheaper.

If that sounds unfair, welcome to the latest episode of a brutal new American business ethic, in which the government bails out bad bets by risk-taking banking executives in New York with money that it borrows from middle-class families and foreign investors. The effort is gilded with fancy financial language and cloaked in the guise of a rescue that helps all citizens, but the reality is that Washington is essentially robbing the poor to help the rich.

Sadly, the American people seem to be standing idly by why an out-of-control government continues its profiteering.  It makes me wonder how they can get away with this.  It looks like the level of pain will have to get much higher before people start considering the removal (or imprisonment) of King George.

As mortgage holders face foreclosure and shareholders take a bath, troubled Washington Mutual takes action — to protect executive bonuses. It could be a trend.

Around the country, Washington Mutual (WM, news, msgs) regularly plays the tough guy with homeowners who fall behind on mortgages. This as foreclosure filings overall rose 60% nationwide in February.

And its involvement in the subprime mess has been tough on stockholders. Since last summer, the company’s shares have lost nearly 80% of their value.

But the bank is a softy when it comes to bonus pay for top brass.

After CEO Kerry Killinger and other top executives missed all or a big part of their bonus pay last year, Washington Mutual wasted little time taking steps to apparently make sure it won’t happen again — even if the mortgage market and the company remain in the tank.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: