COME ON! Who the hell wrote this? A salary of $1? Wow, you need to be able to negotiate in this business, but someone really rolled right over the poor executive who is working hard all year long for just a dollar! Do they mean $1 per minute?
A true CEO does what is needed to save his company. This is an example of leadership and should have happen before the loan.
Also ER did you know that the mayor of NYC takes $1 as his salary? He just so happens to be a billionaire. He ran for mayor because he kew he coukld fix what was wrong with NYC after 9-11 and he did just that.
In order to prove that he means business he takes $1 for his salary and he also takes mass transit to work.
That is what t true leader does. Lead by example.
Warren Buffet has a salary of $100,000. Up until now he is one of the lowest paid CEO’s. ALso in that respeted boat is the CEO of Zappo’s It is an on-line shoe retialer. They have sales that exceed 100 mill. His salery is arounf $50,000 per year.
Hard to believe but these facts are just that FACTS.
At this time in our economy this is the type of leadership we need.
ER, any of these executives should be able to live very comfortably off the millions and millions of dollars they’ve taken in compensation over the last few years alone. If one of them has to sell a yacht or one of their luxury vehicles or vacation homes, too bad. Welcome to working for a living, rather than working to make a killing.
ER, come on think about the $122.8 BILLION bailout the Goverment has given to this company, then the executives turn RIGHT around and sepnd $444,000 on golf outings and spa treatments, now you tell me MR TAX PAYER, do you feel the same? Or should we THE PEOPLE continue to pay for something like this?
Don’t feel sorry for them; they know that this needs to be done to turn this stock around and they own enough of it that they’ll be more than fairly compensated. I’d love to see their expense reports for 2008/2009, too. You can bet they’re working the system. They weren’t stupid enough to fly to DC, each in their separate personal jets, even if they do lease them as part of their business.
I guess that they get to keep their original signing bonus..in Paula’s case I believe that it was in the range of $20 Million. I would gladly forego a salary or raise for 2008, and heck even for 2009, if I got a signing bonus of that magnitude!!!!
If anyone of you think this is a straight up true story, you’re sadly mistaken. First of all Liddy just took over and all he’s going to get is $1? Why would he? He didn’t create this mess. And what the heck is an equity grant? How is he getting compensation from this?
And further more, the other 5 top exec’s will not get a bonus this year, but next year they will. Big deal. Next year will make up for it.
AIG’s Senior partners will not earn long-term performance awards in 2008…was this ever in question? They should earn performance awards and since they are negative, they can pay in…oh, that only goes one way.
I agree with the person that said, “I want to see their expense report for 2008” and 2009. I bet that will more than make up for it.
In regards to Mongoose’s comment about the mayor in NY being wealthy, all of our politicians are wealthy, yet, they give themselves pay increases, free healthcare and a retirement package we all want. Hmmmm, greed is scary. The mayor in NY may not want to enter the Senate, however, that won’t be a problem. They’ll make sure he won’t make it. A couple of calls to the media and he won’t stand a chance. Look at what the media did to the McCain campaign.
This is a great idea! Now all we need to do is get every employee of every level of government to be paid $1 per year. Then we’d all save thousands of dollars. Now I won’t say that all government workers are incompetent fools who can’t get a job in the free market and go into government work only because of a paycheck; no, I won’t say that…say what? that all government workers are incompetent fools who can’t get a job in the free market and go into government work only because of a paycheck, but some might. After all, the U.S. gov’t “defense” and “intelligence” agencies spends hundreds of billions per year (of taxpayer money by the way) and couldn’t find its butt if a bell were tied to it…and they’re proud of that too (google CIA La Dolce Vita Tom Englehardt for an example of this). This is the same gov’t that passed a law (50 USC Section 1520) that makes it “O.K.” for the “Department of Defense” to conduct chemical and biological warfare experiments on “civilian populations”. What? You didn’t hear of this on TV or in school? Gee, than it must not have happened.
I think you guys need to keep a print of these comments you are now making. When Liddy gets $10 – 20 – 30 million in bonuses, stock options etc. in 2010, you will be complaining about how much insurance execs make and he should give that back to the government for the bailout loans.
Well said! They aren’t paying me big bucks because they are afraid they will not be able to retain someone with my good business acumen….which is what these compensation committies say, that they need to be able to attract the best talent…who says the best talent only comes with a high-price tag? Its really a cabal at the top and now that they made a mess of the economy, their chicks are coming home to roost! good for ’em!
Bloomberg is well respected and will be able to run for another office, if he ever chooses. You’re right, you have to read this article carefully. They’re all being compensated; just not in the same way and maybe a few millions less. Of course all of our politicians are not wealthy. But given connections, etc. most can live comfortably and the idle rich have more money, time and energy to run for office than the average man. Biden and his wife together made something like $350K last year. Not poverty but it ranked him among the lowest in the Senate. They’re generally well educated and well connected and if they’re effective, I feel better about their money than I do Madonna and Britney Spears. None of us are naive enough to think the execs are working for nothing. Not some government employees – lower ranking and up – get paid to do virtually no more than show up. That’s why a lot of think we could cut some fat if we just made every worker give an honest days work for the decent pay and better than average security, retirement and health care benefits.
What is the estimated bonus for Leddy in 2010? Can someone explain the equity grant? I certainly hope the idea of pay cuts for the top execs do not filter down to the aig employees who already receive increases that keep pace with inflation.
That’s right. Stop paying people just because of their title and make them work for it. If it means saving the jobs of thousands than why not take a pay cut and forfeit their bonus to show their ability to truely run a company and get it back to it’s original status and better. It isn’t just about the money.
In the story I read on CNN, Paula Reynolds has been recycled as AIG’s Chief Restructuring Office. I guess the logic is that to be sure that a company (AIG) gets restructured into the ground, you need experience by having already restructured a company (SAFECO) into the ground. Why does corporate America keep recycling the same old failures?
AIG – collapse- do any of you understand that the insurance companies within AIG had nothing to do with the financial problem that holding company is currently in? The credit crunch, because they went to the banks and offered to quarantee (which is not insurance) the loans they had, based upon the government’s guarantees of the loans through Freddie and Fannie became a problem when people stopped paying their mortgages? Of course, Carter and later Clinton, made banks loan money to people who could not afford them to begin with. When the adjustible rate loans went up? When the housing values went down, but people purchased their home with little or no money down, they did not have the equite in the house to absorb the loss. In the past, the banks would look to foreclose and eventually sell the house taking a loss and working with the homeowner for the balance. SOX required banks to show the immediate impact of the potential loss or market value of the houses going down, which helped create a crisis in the financial market….now you know the rest of the story!
NJudge, you wrote “I feel better about their money than I do Madonna and Britney Spears.” O.K., maybe Madonna and Spears’ music (and them) is vapid, disposable, pop garbage (and that may be giving it and them too much credit) but consider this: Madonna/Spears put out their music and offer it for sale; they don’t put a gun to anyone’s head to make them pay for it; the offerees can either pay for it or not pay for it. On the other hand, Bloomberg and Biden get paid by “taxes.” They have men and women who tell us we must pay; if we don’t we get shot or get put in jail. We have no choice. If we want no “mayor” or “Senator” we don’t get to not pay for one. If Bloomberg, Biden, et. al. screw up, we just might get to “vote the bums out of office,” but then all we end up with is another poly(many) tic(blood sucking creature)ian in office. And you “feel better” about their money?
Hmmm, by reading some of these responses I am beginning to think some people did not understand that I was being completely sarcastic when I said “poor executives.” My point is that AIG’s CEO is most definitely getting paid more than $1 by AIG, I don’t care what the press says. You think it’s because he has such a warm and kind heart and loves AIG so much after being there for like 2 months that he would work all year long for one dollar? Bill Gates he is not. Believe me, he is being compensated. It might not be as much as before, but it sure as hell ain’t $1.
And what about AIGs CFOs? You know the ones who recevied a $2,000,000 per year raise from $5,000,000 right after they received their first $95 Billion. You know they got their raises, because they did such a good job.
guy, you’ve obviously never seen what it takes to get one of the senior level gov’t positions as far as experience and education. And EVERY facet of our economy, public service or private enterprise, operates on the peter principle. The resumes they have to have assembled, for the professional public servant, is insane. NOW, if you’re a political appointee then let the incompetence and cronyism abound! Hey, that also sounds like a lot of upper level corporate management too, huh? LOL
I can’t believe all the bull I hear about executives and government leaders not ‘deserving’ higher level of pay than all you average joes. Ever hear of capatalism? You and I have every opportunity to be whatever we choose to be. We get this opportunity from this wonderful country, USA, believing in capitalism. If you don’t like it, you want socialism, go somewhere else.
Barack Obama will walk into the White House on Day 1 only to find that supposedly free market capitalists had already socialized everything. Get off your high horse.
Yeah, I would think that the gov’t investment of $1 trillion into private enterprize pretty much qualifies as socialized business. Hmmm, neo-con capitalism has been soooo good to us. phhht.
I didn’t vote to bail out AIG. In the captalism, if you fail, you fail. I don’t give a damn what would have happened as there would be other companies that would recognize the opportunity and gain. Survival of the fittest average joes.
Another thing, if there are to be caps on CEO and Executives then there should be caps on salaries for atheletes. They have ridiculous salaries. They don’t deserve to make many millions for being good and ghetto fab.
Obama’s going to fix this entire mess. I know that because I prayed to him last night and he ALWAYS answers prayers! Plus, he’s going to give me a brand new, shiny red tricycle for Christmas ’cause I’ve been such a good boy this year!
The execs that take low or no salary have a large equity stake (stock ownership) in the company and make their money that way. When the company succeeds, they succeed. They get “paid” just not via a salary
And that’s how it should be for C-level executives that drive the company. They should be paid in equity stakes and succeed when the company succeeds. Warren Buffet is not a billionaire because he draws a salary, he’s a billionaire because he has equity in a company that he made big. Same thing with Bill Gates and Steve Jobs. I have no problems with CEOs and such being fabulously wealthy. What I have a problem with is them being awarded millioins in salary to drive a company to failure. I try very hard to not invest in companies with that kind of compensation policy.
What does being good at sports have to do with the ghetto? Don’t get mad at that fact that most professional athletes are African American does not make them ghetto and don’t get mad that American’s who love the sport are paying their salaries. If you don’t like how much they make don’t watch the games, go to the games or anything else that contributes to their salary. People like you make me sick with your racism.
Voluntary restrictions on executive compensation…..what a noble gesture! However will the poor waifs survive??
These executive pay packages have gotten more despicable throughout the years. Do these guys really think they’re worth the obscene amount of money they’re given? They couldn’t spend that much money if they tried.
Happy Thanksgiving fat cats – don’t choke on your wish bones!
You did not hear how much of an equity stake Mr. Liddy will take. Does this dilute the shares even more? Although he now has an incentive to bring the company back to profitability, dont be confussed about this, He will make out just fine. Buy this stock, The Government cannot let it fail and will do everthing in its power behind closed doors to bring it back to profitablity.
InsuranceGirl – “Welcome to working for a living, rather than working to make a killing.”
Is that kind of along the lines of “Pigs Get Fed, but Hogs Get Slaughtered”?
Had the Credit Default Swaps resulted in a different outcome, we would not have known the details of compensation packages, nor would most of us have cared.
Had the politicians kept their hands off of the financial underwriting standards, we would not be in the fix we are in today. Now, it appears, the heralded “Change We Can Believe In” is just more of the same. The length of the 1930’s depression was due, in large part, to the New Deal – government intervention in the economy and the business sector sitting on the sidelines waiting to see what the government would do next – sound familiar?
The free market economy should allow for us to work for a “killing”. Why else would we strive to perform and create? If we hoggishly abuse our position and privilege the market will eventually make a correction and we will be culled out of the herd and slaughtered.
This is obviously a very charged subject based on the amount of comments on this page.
Your argument is valid, but the situation is very much a Chicken and the Egg scenario. If the Feds had not driven home ownership to the extend that they did then the feeding frenzy environment would likely have never occurred. (And there was more than one administration that can take credit for this policy.) Conversely, if the mortgage brokerage markets had not collateralized and parcelled out derivatives securities with the assumption that our economy was recession proof, then we would not have the credit market collapse. Assuming that an 80% foreclosure rate was the worst case scenario was the fatal flaw. Compound that with a lack of transparency and the mark to market accounting principles, which is ridiculous and waaay outdated, then we got exactly what we deserved – a huge mess.
Some day we need to recognize that there IS a perfect balance between government regulation and the free market. Somebody needs to be present at the emergency brake with the willpower to pull the lever. Otherwise, that loose rail on the track will just guarantee another train wreck in the future. I can also guarantee that the young gun pulling down 6 figures plus a year won’t be the one who stops the train.
Anout time!!!!!!!!!!!!!! Good for the Gov’t, finally taking some action…..
If Bill Gates can take a $1 salary these guys can too. It’s about time somebody took some action to tie executive pay to performance.
COME ON! Who the hell wrote this? A salary of $1? Wow, you need to be able to negotiate in this business, but someone really rolled right over the poor executive who is working hard all year long for just a dollar! Do they mean $1 per minute?
A true CEO does what is needed to save his company. This is an example of leadership and should have happen before the loan.
Also ER did you know that the mayor of NYC takes $1 as his salary? He just so happens to be a billionaire. He ran for mayor because he kew he coukld fix what was wrong with NYC after 9-11 and he did just that.
In order to prove that he means business he takes $1 for his salary and he also takes mass transit to work.
That is what t true leader does. Lead by example.
Warren Buffet has a salary of $100,000. Up until now he is one of the lowest paid CEO’s. ALso in that respeted boat is the CEO of Zappo’s It is an on-line shoe retialer. They have sales that exceed 100 mill. His salery is arounf $50,000 per year.
Hard to believe but these facts are just that FACTS.
At this time in our economy this is the type of leadership we need.
ER, any of these executives should be able to live very comfortably off the millions and millions of dollars they’ve taken in compensation over the last few years alone. If one of them has to sell a yacht or one of their luxury vehicles or vacation homes, too bad. Welcome to working for a living, rather than working to make a killing.
haaaaaaaaa whatever
ER, come on think about the $122.8 BILLION bailout the Goverment has given to this company, then the executives turn RIGHT around and sepnd $444,000 on golf outings and spa treatments, now you tell me MR TAX PAYER, do you feel the same? Or should we THE PEOPLE continue to pay for something like this?
Don’t feel sorry for them; they know that this needs to be done to turn this stock around and they own enough of it that they’ll be more than fairly compensated. I’d love to see their expense reports for 2008/2009, too. You can bet they’re working the system. They weren’t stupid enough to fly to DC, each in their separate personal jets, even if they do lease them as part of their business.
I guess that they get to keep their original signing bonus..in Paula’s case I believe that it was in the range of $20 Million. I would gladly forego a salary or raise for 2008, and heck even for 2009, if I got a signing bonus of that magnitude!!!!
If anyone of you think this is a straight up true story, you’re sadly mistaken. First of all Liddy just took over and all he’s going to get is $1? Why would he? He didn’t create this mess. And what the heck is an equity grant? How is he getting compensation from this?
And further more, the other 5 top exec’s will not get a bonus this year, but next year they will. Big deal. Next year will make up for it.
AIG’s Senior partners will not earn long-term performance awards in 2008…was this ever in question? They should earn performance awards and since they are negative, they can pay in…oh, that only goes one way.
I agree with the person that said, “I want to see their expense report for 2008” and 2009. I bet that will more than make up for it.
In regards to Mongoose’s comment about the mayor in NY being wealthy, all of our politicians are wealthy, yet, they give themselves pay increases, free healthcare and a retirement package we all want. Hmmmm, greed is scary. The mayor in NY may not want to enter the Senate, however, that won’t be a problem. They’ll make sure he won’t make it. A couple of calls to the media and he won’t stand a chance. Look at what the media did to the McCain campaign.
Amen! I got a signing bonus when I started at my company 18 years ago. It was a free lunch.
This is a great idea! Now all we need to do is get every employee of every level of government to be paid $1 per year. Then we’d all save thousands of dollars. Now I won’t say that all government workers are incompetent fools who can’t get a job in the free market and go into government work only because of a paycheck; no, I won’t say that…say what? that all government workers are incompetent fools who can’t get a job in the free market and go into government work only because of a paycheck, but some might. After all, the U.S. gov’t “defense” and “intelligence” agencies spends hundreds of billions per year (of taxpayer money by the way) and couldn’t find its butt if a bell were tied to it…and they’re proud of that too (google CIA La Dolce Vita Tom Englehardt for an example of this). This is the same gov’t that passed a law (50 USC Section 1520) that makes it “O.K.” for the “Department of Defense” to conduct chemical and biological warfare experiments on “civilian populations”. What? You didn’t hear of this on TV or in school? Gee, than it must not have happened.
The compensation for any CEO should be a small salary and a % of profits, no different than the owner of a small business.
I think you guys need to keep a print of these comments you are now making. When Liddy gets $10 – 20 – 30 million in bonuses, stock options etc. in 2010, you will be complaining about how much insurance execs make and he should give that back to the government for the bailout loans.
These guys have made so much money over the years, they should be paying AIG’s loans back just to continue to work there!
Well said! They aren’t paying me big bucks because they are afraid they will not be able to retain someone with my good business acumen….which is what these compensation committies say, that they need to be able to attract the best talent…who says the best talent only comes with a high-price tag? Its really a cabal at the top and now that they made a mess of the economy, their chicks are coming home to roost! good for ’em!
Bloomberg is well respected and will be able to run for another office, if he ever chooses. You’re right, you have to read this article carefully. They’re all being compensated; just not in the same way and maybe a few millions less. Of course all of our politicians are not wealthy. But given connections, etc. most can live comfortably and the idle rich have more money, time and energy to run for office than the average man. Biden and his wife together made something like $350K last year. Not poverty but it ranked him among the lowest in the Senate. They’re generally well educated and well connected and if they’re effective, I feel better about their money than I do Madonna and Britney Spears. None of us are naive enough to think the execs are working for nothing. Not some government employees – lower ranking and up – get paid to do virtually no more than show up. That’s why a lot of think we could cut some fat if we just made every worker give an honest days work for the decent pay and better than average security, retirement and health care benefits.
What is the estimated bonus for Leddy in 2010? Can someone explain the equity grant? I certainly hope the idea of pay cuts for the top execs do not filter down to the aig employees who already receive increases that keep pace with inflation.
That’s right. Stop paying people just because of their title and make them work for it. If it means saving the jobs of thousands than why not take a pay cut and forfeit their bonus to show their ability to truely run a company and get it back to it’s original status and better. It isn’t just about the money.
In the story I read on CNN, Paula Reynolds has been recycled as AIG’s Chief Restructuring Office. I guess the logic is that to be sure that a company (AIG) gets restructured into the ground, you need experience by having already restructured a company (SAFECO) into the ground. Why does corporate America keep recycling the same old failures?
AIG – collapse- do any of you understand that the insurance companies within AIG had nothing to do with the financial problem that holding company is currently in? The credit crunch, because they went to the banks and offered to quarantee (which is not insurance) the loans they had, based upon the government’s guarantees of the loans through Freddie and Fannie became a problem when people stopped paying their mortgages? Of course, Carter and later Clinton, made banks loan money to people who could not afford them to begin with. When the adjustible rate loans went up? When the housing values went down, but people purchased their home with little or no money down, they did not have the equite in the house to absorb the loss. In the past, the banks would look to foreclose and eventually sell the house taking a loss and working with the homeowner for the balance. SOX required banks to show the immediate impact of the potential loss or market value of the houses going down, which helped create a crisis in the financial market….now you know the rest of the story!
any word on how Martin S. is holding up. I know he missed out on his bonus.
NJudge, you wrote “I feel better about their money than I do Madonna and Britney Spears.” O.K., maybe Madonna and Spears’ music (and them) is vapid, disposable, pop garbage (and that may be giving it and them too much credit) but consider this: Madonna/Spears put out their music and offer it for sale; they don’t put a gun to anyone’s head to make them pay for it; the offerees can either pay for it or not pay for it. On the other hand, Bloomberg and Biden get paid by “taxes.” They have men and women who tell us we must pay; if we don’t we get shot or get put in jail. We have no choice. If we want no “mayor” or “Senator” we don’t get to not pay for one. If Bloomberg, Biden, et. al. screw up, we just might get to “vote the bums out of office,” but then all we end up with is another poly(many) tic(blood sucking creature)ian in office. And you “feel better” about their money?
Hmmm, by reading some of these responses I am beginning to think some people did not understand that I was being completely sarcastic when I said “poor executives.” My point is that AIG’s CEO is most definitely getting paid more than $1 by AIG, I don’t care what the press says. You think it’s because he has such a warm and kind heart and loves AIG so much after being there for like 2 months that he would work all year long for one dollar? Bill Gates he is not. Believe me, he is being compensated. It might not be as much as before, but it sure as hell ain’t $1.
And what about AIGs CFOs? You know the ones who recevied a $2,000,000 per year raise from $5,000,000 right after they received their first $95 Billion. You know they got their raises, because they did such a good job.
guy, you’ve obviously never seen what it takes to get one of the senior level gov’t positions as far as experience and education. And EVERY facet of our economy, public service or private enterprise, operates on the peter principle. The resumes they have to have assembled, for the professional public servant, is insane. NOW, if you’re a political appointee then let the incompetence and cronyism abound! Hey, that also sounds like a lot of upper level corporate management too, huh? LOL
I can’t believe all the bull I hear about executives and government leaders not ‘deserving’ higher level of pay than all you average joes. Ever hear of capatalism? You and I have every opportunity to be whatever we choose to be. We get this opportunity from this wonderful country, USA, believing in capitalism. If you don’t like it, you want socialism, go somewhere else.
Barack Obama will walk into the White House on Day 1 only to find that supposedly free market capitalists had already socialized everything. Get off your high horse.
Yeah, I would think that the gov’t investment of $1 trillion into private enterprize pretty much qualifies as socialized business. Hmmm, neo-con capitalism has been soooo good to us. phhht.
I didn’t vote to bail out AIG. In the captalism, if you fail, you fail. I don’t give a damn what would have happened as there would be other companies that would recognize the opportunity and gain. Survival of the fittest average joes.
Another thing, if there are to be caps on CEO and Executives then there should be caps on salaries for atheletes. They have ridiculous salaries. They don’t deserve to make many millions for being good and ghetto fab.
well, at least you have a healthy dose of self awareness. lol
Obama’s going to fix this entire mess. I know that because I prayed to him last night and he ALWAYS answers prayers! Plus, he’s going to give me a brand new, shiny red tricycle for Christmas ’cause I’ve been such a good boy this year!
See y’all at the soup kitchen tomorrow!
The execs that take low or no salary have a large equity stake (stock ownership) in the company and make their money that way. When the company succeeds, they succeed. They get “paid” just not via a salary
And that’s how it should be for C-level executives that drive the company. They should be paid in equity stakes and succeed when the company succeeds. Warren Buffet is not a billionaire because he draws a salary, he’s a billionaire because he has equity in a company that he made big. Same thing with Bill Gates and Steve Jobs. I have no problems with CEOs and such being fabulously wealthy. What I have a problem with is them being awarded millioins in salary to drive a company to failure. I try very hard to not invest in companies with that kind of compensation policy.
What does being good at sports have to do with the ghetto? Don’t get mad at that fact that most professional athletes are African American does not make them ghetto and don’t get mad that American’s who love the sport are paying their salaries. If you don’t like how much they make don’t watch the games, go to the games or anything else that contributes to their salary. People like you make me sick with your racism.
Voluntary restrictions on executive compensation…..what a noble gesture! However will the poor waifs survive??
These executive pay packages have gotten more despicable throughout the years. Do these guys really think they’re worth the obscene amount of money they’re given? They couldn’t spend that much money if they tried.
Happy Thanksgiving fat cats – don’t choke on your wish bones!
You did not hear how much of an equity stake Mr. Liddy will take. Does this dilute the shares even more? Although he now has an incentive to bring the company back to profitability, dont be confussed about this, He will make out just fine. Buy this stock, The Government cannot let it fail and will do everthing in its power behind closed doors to bring it back to profitablity.
A pigeon can still make a deposit on a nice BMW ~
Hey now!
InsuranceGirl – “Welcome to working for a living, rather than working to make a killing.”
Is that kind of along the lines of “Pigs Get Fed, but Hogs Get Slaughtered”?
Had the Credit Default Swaps resulted in a different outcome, we would not have known the details of compensation packages, nor would most of us have cared.
Had the politicians kept their hands off of the financial underwriting standards, we would not be in the fix we are in today. Now, it appears, the heralded “Change We Can Believe In” is just more of the same. The length of the 1930’s depression was due, in large part, to the New Deal – government intervention in the economy and the business sector sitting on the sidelines waiting to see what the government would do next – sound familiar?
The free market economy should allow for us to work for a “killing”. Why else would we strive to perform and create? If we hoggishly abuse our position and privilege the market will eventually make a correction and we will be culled out of the herd and slaughtered.
This is obviously a very charged subject based on the amount of comments on this page.
Your argument is valid, but the situation is very much a Chicken and the Egg scenario. If the Feds had not driven home ownership to the extend that they did then the feeding frenzy environment would likely have never occurred. (And there was more than one administration that can take credit for this policy.) Conversely, if the mortgage brokerage markets had not collateralized and parcelled out derivatives securities with the assumption that our economy was recession proof, then we would not have the credit market collapse. Assuming that an 80% foreclosure rate was the worst case scenario was the fatal flaw. Compound that with a lack of transparency and the mark to market accounting principles, which is ridiculous and waaay outdated, then we got exactly what we deserved – a huge mess.
Some day we need to recognize that there IS a perfect balance between government regulation and the free market. Somebody needs to be present at the emergency brake with the willpower to pull the lever. Otherwise, that loose rail on the track will just guarantee another train wreck in the future. I can also guarantee that the young gun pulling down 6 figures plus a year won’t be the one who stops the train.
That’s great, LOL!
Correction: That should have been an assumed 20% foreclosure rate, not 80%. oops. lol