By letterhead | August 5, 2008
As the new movie The Dark Knight is breaking box office records and capturing the popular imagination, it’s only fitting to riff on the theme for this month’s award… and yes, it’s only the 5th of the month, but I can’t imagine that anyone will top this one in the next few weks (political surrogates aside).
A NYT article today calls out Freddie Mac CEO Richard Syron for a sin that’s been all too common among the insider set in Washington D.C. over the past 7 years: not listening to anyone except your political dark angels.
It got us into a war. It’s what put us over a barrel (literally), on energy. It’s what busted the budget. The current Administration has left dozens of bodies in its wake. Smart, dedicated people who were pushed out of their jobs because they did not toe the line. (Remember Paul O’Neil… anyone?)
Ideology got in the way of rational policy and now… all you have to do is pick up a newspaper any day of the week to see the consequences.
HOLY SUBPRIME BATMAN… THAT TALKING POINT IS SUB-PAR!
What Syron told the Times is quite astonishing in its brazenness:
“If I had better foresight, maybe I could have improved things a little bit,” he said. “But frankly, if I had perfect foresight, I would never have taken this job in the first place.” [Emphasis added.]
Come again? It’s the job’s fault?!?!?!
YOUR $38-MILLION JOB?
Oh yes, it was the job that was a runaway train. You just happened to be on it… in the caboose of course, not at the controls.
The clear implication here is that Syron now believes he was a condemned man from the start, and he wants your sympathy.
It was a lost cause; the job is thankless and undoable. He’s just the fall guy. That’s the reason he was paid $38 million in just under five years, because it’s the worst job in the world… a helluva lot worse than:
working in a steel mill
being a dairy cow midwife
cleaning dump trucks
or even inseminating turkeys…
and a whole lot of other dirty jobs.
Poor Mr. Syron.
Just Plain Batty
A Freddie Mac spokesman said in a written statement:
“There is little to nothing that Freddie Mac could have done to prevent the losses that it is now incurring. You’ve got the worst housing crisis in U.S. recorded history, and we’re the largest housing finance company in the country, so when one goes down, the other goes with it.”
Um… reality check. The housing market would not be “going down” if is had not GONE UP so much in the first place. And what enabled the run up (i.e., bubble)?
Cheap, easy money lent to people who could not afford it, at terms that posed a future risk of default, on properties that were overvalued.
Exactly the kind of risky practice Syron was warned about.
And for this bubble we can thank Freddie Mac, Fannie Mae… and let’s not forget Treasury Secretary Hank Paulson, formerly of Goldman Sachs, which made a killing selling more than $100 billion in crappy CMOs (collateralized mortgage obligations) and then making another killing when it shorted mortgage securities in 2007 while dumping the rest of its CMO portfolio.
BLAM!! … Pow!!… ZAP!… ZOWIE!!
So now it seems that underlings tried to convince Mr. Syron to be more cautious… screaming “The bridge is out! The bridge is out!” as he directed engineers to toss more wood onto the fire… all from the comfort of his cozy caboose.
In response he claims:
“This company has to answer to shareholders, to our regulator and to Congress, and those groups often demand completely contradictory things.”
Yet the Times quotes his defiant refusal when he was told to raise capital; he said to a group of investors:
“This company will bow to no one.”
Wow!… That was pretty damned forceful! Why couldn’t he be that damned forceful when pushed to compromise underwriting and risk management standards?
Now there’s an interesting riddle…
Riddle Me This MacMan… Whom do you answer to?
So he many not “bow” to anyone, but whom does he serve? Could it be Capitol Hill?
Prior to the 2006 midterm elections, Mr. Syron gave almost exclusively to Republican candidates, presumably because they were in charge.
But since late 2006 he has given (he & his wife) almost exclusively to democrats: $22,500 to the Democratic Senatorial Campaign Committee, and just shy of $14,000 to Senate Banking Committee Chairman Chris Dodd (D-CT). As well as another $20,000 to FREDDIE PAC, his company’s political action committee, which splits its donations about evenly between Dems and GOPers. (Stats provided by Open Secrets.)
So, we know he gives to those in power… a total of about $46,000 to the Democrats in charge, just in the last year and a half. But what else did he give?
It seems he defied common sense fiscal practice and gave open access to the coffers of Freddie Mac, to achieve a political goal of supporting the housing market… er, bubble… which made a lot of people look really really good… for a relatively short period of time… at a very very high price to the nation, and great profit to himself.
The New Supervillain Weapon: Hyperbolic Hypocrisy
Syron claims that he had no warning, no insight, and no control. Whoah! That’s some super-duper cloaking weapon he’s got. Makes him invisible and removes all responsibility for everything.
According to the article:
Others, however, dismiss [Syron's] explanation. “Sure, it’s hard to deal with the pressures of Congress and shareholders and regulators,” said a former high-ranking Freddie Mac executive. “But that’s why executives get paid so much. It’s not acceptable to blame those pressures for making bad choices.”
BLAM! Take that! Your super-weapon talking points have no power here!
Get Thee To A… Batcave!
So we honor his impeccable performance as a two-faced villain: the powerful, heavyweight, money-slinging CEO when times are good; and a lame, evasive, dog-ate-my-homework 8-year old when times are bad.
And he now has the honor of writing a new chapter in the long Freddie Mac legacy of irresponsibility… adding to the $5 billion accounting scam, and political fund raising scandal with the destruction of $80 billion in (admittedly inflated) shareholder value and a potential taxpayer bailout as icing on the cake.
So we offer Richard Syron this month’s BS AWARD: a bat cave of his very own, where he can sit and ponder his role in the biggest taxpayer swindle since, well, since the S&L fiasco of the 1980s.
We hope you spend the rest of your days ankle-deep in guano, praying that some light will one day enter your cave… the light you refused to see when it really mattered.