Networks Downplay $42 Million in 'Outrageous' Bonuses, 'Unlimited' Bailout of Fannie, Freddie
The network news media cheered when Obama called for restrictions on CEO pay or bonuses that, according to reporters, exemplify the Wall Street "greed" that toppled the American economy.
But when $42 million in cash compensation packages were announced on Christmas Eve for Fannie Mae and Freddie Mac executives, the networks couldn't muster any anger toward the highly connected groups. Although Fannie and Freddie were two government-sponsored enterprises whose excessive risk taking contributed significantly to the housing crisis, the networks barely reported the story at all.
Salaries and bonuses at American International Group (AIG), Goldman Sachs, Citigroup and others have been criticized in dozens of network reports in 2009.
As Katie Couric noted on the CBS "Evening News" Oct. 21, "Taxpayers all over the country were outraged when they heard that companies they helped bail out turned around and gave their executives huge bonuses."
A few days earlier on Oct. 15, CBS's "Early Show" interviewed economist Peter Morici who said "it's absolutely unfair for Wall Street to be paying itself record bonuses. The taxpayers made these bonuses possible by loaning Wall Street money at near zero rates. This is all quite unseemly and inappropriate."
AIG in particular was the object of media scrutiny beginning in March 2009 when it announced plans to pay roughly $165 million in bonuses. The media's sense of outrage flared up against the bailed out company again in late 2009.
In just the past three months, AIG was mentioned in 21 critical reports about Wall Street bonuses. But The Wall Street Journal highlighted a major difference between AIG and Fannie/Freddie on Jan. 3 saying "at least AIG is trying to make money. Fan and Fred are now designed to lose money."
"Outrage." That's what the networks found when private companies that accepted bailouts compensated their executives. It's also what taxpayers would feel if the networks were actually reporting the latest developments with Fannie Mae and Freddie Mac, which have been protected for years by high profile Democrats Reps. Chris Dodd, Conn., and Barney Frank, Mass.
But since the Christmas Eve announcement of millions in salaries and bonuses and the Obama administration's pledge of "unlimited financial assistance" to the mortgage giants, ABC and CBS offered a total of three brief mentions totaling 175 words about Fannie Mae and Freddie Mac. NBC hasn't mentioned them at all.
Not a single one of those reports used the word "bonus" or mentioned the decision to extend the credit line of both government-sponsored enterprises (GSEs), which already required more than $100 billion from taxpayers.
Unlike the broadcast networks, CNBC's Rick Santelli was indignant about the stealth extension of funds to Fannie and Freddie. On Jan. 4, Santelli told viewers his New Year's resolution to "mention Freddie and Fannie and every day maybe ask what's wrong with S&P, Moody's and Fitch. Because for us to re-nationalize off balance sheets these trillions of dollars of lecherous accounting gimmicks without having it affect the U.S. credit rating in my opinion is reprehensible."
Talking about a Wall Street Journal editorial, Santelli remarked that Fannie and Freddie aren't SIV's (Special Investment Vehicles), but rather "Special Implosion Vehicles."
But Santelli's frustration was an exception to near silence by the networks.
You can find the Business & Media Institute's full report here.