Fannie and Freddie

The U.S. government takes over Fannie Mae and Freddie Mac. The old CEOs are forced out. Of course, they took home multiple millions of dollars over the last few years, while they were engaging in risky behaviour which led to the government bailout. Are they going to have to give it back? Stay tuned. So far it looks like yet another example of privatizing profits and socializing losses.

In this case the shareholders were deliberately cut out, which I’m OK with. However, it serves as another example of how U.S. capitalism is not based on value to shareholders. It’s based on value to management, particularly to executives.