Many of the Bear Stearns executives responsible for the subprime mortgage fiasco that set off a worldwide economic downturn didn’t have to share in the financial ruin they helped precipitate. In other words, these captains didn’t go down with the sinking ship. In fact, they jumped off Bear Stearns and started piloting other major American economic ships.
An article in Mother Jones profiles six Bear Stearns executives who went on to highly successful (and highly compensated) jobs at other companies on Wall Street:
. . . All six continue to work at the top levels of their field, earning salaries and bonuses that have allowed them to live in luxury while the mortgages that made up the bonds they sold have defaulted at alarming rates.
It highlights, in particular, the story of Thomas Marano:
Marano personally signed the SEC filings on at least $8.7 billion worth of residential mortgage-backed securities sold to Fannie Mae and Freddie Mac . . .
Mortgage-backed securities that went belly up. Marano could have been incarcerated for fraud if the DOJ had been able to prove that he knowingly included so-called toxic assets in the securities he signed off on. Marano vehemently denied any fraudulent dealings (What else would you expect him to do?), which would leave only one option: he was and is extraordinarily incompetent.
Thanks to the mammothly ill-conceived TARP bail-out, Marano also got millions in compensation:
Marano’s compensation is known because he was one of the 25 highest paid people at Ally Financial [parent company of ResCap]. Under the law, seven companies that received money from the TARP were required to submit their executives’ compensation packages to the US Treasury for approval and to disclose them in SEC filings. Special paymaster Patricia Geoghegan approved Marano’s 2012 $8 million compensation—$6.2 million in salary and $1.8 million in stock options—just weeks before ResCap filed for Chapter 11 bankruptcy on May 14, 2012.
This is just unbelievable. These people’s greed, corruption, and incompetence were major contributing factors to our economic downturn. We suffered the consequences. They did not. In fact, they have been rewarded for failure.
And who rewarded them? The civil government of course. Ever noticed what the “bail-out” funds were used for? Executive compensations and company buy-outs. In other words, a bunch of failed companies used taxpayer money to reward their executives and buy out smaller companies. These smaller companies were actually doing it right in many cases, and they would have been able to rise in the ranks if the civil government had allowed failure to fail. When will this country remember the principles and truths that made her great?