The recent clash between the Federal Housing Finance Agency, Fannie Mae and Freddie Mac and the House Financial Services Committee highlighted precisely why the government can’t fix the government-sponsored enterprises. The purpose of the hearing was meant to question Fannie CEO Michael Williams and Freddie CEO Charles ‘Ed’ Haldeman on the justification of their compensation. However, committee members pummeled FHFA Acting Director Ed DeMarco. This is despite his income being roughly 20 to 40 times less than either CEO. The committee even put together a chart meant to show how inflated the salaries are considered to be: It’s a fair point that the GSEs should be led by public servants, not private executives. DeMarco is a fine example of a public servant willing to take a beating and still return to his thankless job the next day. The mere fact committee members are calling the CEOs of Fannie and Freddie to a hearing and not even aggressively questioning either shows a lack of investigative thought and a total lack of political willpower to reform the nation’s housing. If you do, in fact, think the two CEOs are somehow ripping off America, and completely disregard the relative improvements at the GSEs, then take them to task. But despite the popularity of hating on the social class inequities Fannie and Freddie played a part in, the politicos refused to “eat the rich.” I’ve talked to both CEOs. They can take it. They are smart men with answers. But they aren’t going to speak ahead of their boss. They did not become CEOs through a failure to listen and, as the hearing showed, perfectly capable of watching politicians squander a great opportunity to learn more about how to fix housing. Instead, it looked like the politicians would rather repeatedly attack the long-suffering public servant. That is, quite simply, playing it safe. Direct questioning toward a distinct federal official is easier than trying to make the CEOs of trillion-dollar companies sweat. Nothing important came out of this meeting. And as for bonuses paid to the executives of the GSEs, HousingWire has been covering it for months. The recent attention changes nothing. And it shows why the government can’t fix Fannie or Freddie. Write to Jacob Gaffney. Follow him on Twitter @jacobgaffney.
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