'World News' Plays Populism Card: Bashes Wall St. Bonuses; Ignores Fannie, Freddie
Just in time for what they call "bonus season," ABC's "World News" treated its viewers to a little anti-Wall Street populism Sunday night.
On "World News" Jan. 10, weekend anchor Dan Harris explained there was "backlash" against Wall Street for bonuses that haven't even been paid out yet. But the ABC report made no mention of bonuses paid to Fannie Mae and Freddie Mac executives.
"This week on Wall Street, it's the start of the bonus season, when the big banks dish out big bonuses," Harris said. "This is happening despite all the taxpayer bailouts and all the economic pain on Wall Street. The backlash has already begun."
To set up her report about bonuses, ABC correspondent Stephanie Sy made sure to add that "millions of Americans" were facing economic hardship.
"While millions of Americans struggle to find work and pay their mortgages, Wall Street banks are preparing to award bonuses, big enough to rival those before the bailout," Sy said.
And according to James Reda, labeled an "executive pay consultant" by "World News," the bonuses paid out for 2009 performances are going to "record-busting." And Sy also included Christina Romer's attack on "offensive" bonuses by from the Jan. 10 broadcast of ABC's "This Week." Romer chairs Obama's Council of Economic Advisers.
Sy mentioned that the government was powerless to rein in these bonuses that had already repaid borrowed funds
"But since banks, such as Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) have paid back the taxpayer money they borrowed, the administration has no authority to limit pay," Sy said. "Six of the country's largest banks have set aside $112 billion for compensation, and that number is set to rise when they announce final earnings reports in coming weeks."
However, Sy's report completely ignored the bonuses Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) announced in late December. The Christmas Eve announcement said that their executives would receive $42 million in cash compensation packages at the same time caps on how much government aid these failed institutions can receive were removed. Both groups have been bailed out by the federal government and are still in conservatorship of the government.
Sy took a shot at those who liken Wall Street executive compensation to that of professional athletes and warned legislators in Washington, D.C. were going to grill the heads of banks about this issue.
"Babe Ruth once said, in response to a question of why he made more than President Hoover, ‘I had a better year,'" Sy said. "But not all bankers are Babe Ruths. It's true, banks profited when the market rallied last year, but it was a government bailout and other incentives that made those profits possible. Not only is bonus season putting a spotlight on Wall Street, in Washington this week, the heads of four major banks will face a congressional panel that is investigating the causes behind the financial crisis. They are likely going to face tough questions about these outsized bonuses."
CNBC's Erin Burnett defended Wall Street executive compensation on NBC's Feb. 1, 2009 "Meet the Press." She took a lot of heat for her comments but said it wasn't as simple and it had been reported.
"There are, though - well, how should we say this - the taxpayer money is not being used to pay the bonuses," Burnett said. "I think people could understand if you work for a company - right? If the three of us worked for a company, your guests, and I lost $10 billion but Steve [Forbes] over there, he made a billion dollars. So overall the company actually loses money, but Steve went and did his very darndest for that company and he made money. So should he be paid for his work? That's essentially what we're talking about here."