Lawrence gets some award for posting six entries to his Money Politic$ blog in eight minutes. That's ROI! They are all good, as well.
One concerns the $26 million hush money golden parachute offered to Franklin Raines. Some numbers stun me -- I remember one of Johnny Carson's ex-wives saying that she "couldn't possibly live on $250,000 per month."
She presumably earned her alimony. I feel Dick Grasso earned his generous retirement as well. Now, in the shadow of Sarbanes-Oxley, the quasi-private Fannie Mae, under a cloud of unreported losses and artificially smoothed earnings, packs its former CEO with quite a bundle to take home and show mom:
A twenty-six million dollar farewell compensation parachute, plus $116,300 per monthly pension, for former Fannie CEO Frank Raines seems a bit much. Make that way too much. The books were cooked, and all the top executives benefited handsomely. Isn't this fraud? Lining one's own pockets at the expense of shareholders? Violating regulatory accounting rules? Somebody needs to take a good hard look at this. If it were Enron, total disgorgement would be undoubtedly be the solution. Why shouldn't the government-sponsored Fannie be treated the same?
Don Luskin wrote a great piece, “The Lesson of Thrift”, on NRO about the Thrift Savings Plan of the US federal government. On K&C last night, he told us that the plan not only yielded 9% per year to its participants, but its administrative costs are only about 6 basis points (six one-hundredths of one percent) of invested assets. This is critic-slaying work by Mr. Luskin. It is an important policy contribution to the somewhat mangled debate. I can only add that for decades, state and local pension retirement plans for police, fire, and teacher’s unions have been successfully investing in private markets. Why shouldn’t Social Security contributors have the same rate of return benefits? Paul Krugman and Michael Kinsley never tell you this. But Mr. Luskin does.