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Posted by: Theo Francis on September 10
As Election Day nears,a few days can be an eternity in an election campaign. Some issues rise and then vanish completely in less time. But there are signs that, 48 hours after the government’s takeover of Fannie Mae and Freddie Mac, this issue is likely to linger at least a little longer as a campaign theme.
For one thing, both candidates have ties to the mortgage giants, the New York Times reports. Not that that’s stopping them from lobbing barbs at the companies.
Today, Barack Obama called for reining in pay packages for the ousted chiefs of Fannie Mae and Freddie Mac, a sentiment shared by Sens. Charles Schumer and Jack Reed, Democrats of New York and Rhode Island, respectively. "Under no circumstances should the executives of these institutions earn a windfall at a time when the U.S. Treasury has taken unprecedented steps to rescue these companies with taxpayer resources," Obama wrote. News reports have suggested the execs could be in line to receive more than $23 million together, though Richard Syron, until Sunday Freddie Mac's CEO, may give up some of his severance.
Meantime, yesterday, in a Wall Street Journal op-ed, John McCain and Sarah Palin called for "permanent reform" of the mortgage giants -- calling vaguely to "downsize" them and for more ethical conduct and better disclosure among mortgage borrowers, buyers and sellers. Barack Obama, too, has criticized Fannie and Freddie, blaming Congress as well as the Bush administration.
Paulson, for his part, absolved Fannie and Freddie's management of the government takeover, blaming instead turmoil in the housing market and a bad business model. In Paulson's statement Sunday, he said the companies' "managements and their Boards are responsible for neither."
Washington Bureau Chief Jane Sasseen and other BusinessWeek writers cover the run-up to the Nov. 4 presidential election, paying close attention to how the candidates will handle issues such as housing, the economy, unemployment, and immigration.