House Financial Services Committee Chairman Barney Frank (D-Mass.) demanded yesterday that Fannie Mae and Freddie Mac cancel retention payments being paid to thousands of employees, but the federal regulator that authorized the payments is refusing to comply.

"The public, having provided significant support for the purpose of restoring trust and confidence in our country's financial system, rightfully insists that large bonuses such as these awarded by institutions receiving public funds at a time of a serious economic downturn cannot continue," Frank wrote in a letter to James B. Lockhart III, director of the Federal Housing Finance Agency.

Writing in response, Lockhart said he told Congress in September that he had instituted retention programs at Fannie Mae and Freddie Mac, in consultation with the Treasury Department. Since then, many employees have helped carry out the Obama administration's housing recovery plan.

"It was very important to work with the current management teams and employees to encourage them to stay and to continue to make important improvements," Lockhart wrote. "In response, most have stayed. Indeed, I can attest that many employees at all levels at each company have been working far more hours, with far less compensation than they did prior" to the government's takeover.

Retention payments are being paid over a one-year period, starting last December. Lockhart said that Fannie Mae has offered 5,000 employees payments averaging $21,000, and that Freddie Mac has offered 4,000 payments averaging $19,000.

"These are going to employees at all levels, not just top executivies," Lockhart wrote...

...Any sentient being dumb enough to fall for this AIG huffin' an' a-puffin' from Barry, Barney, Doddy, and the gang is a fool who deserves the vaporization of his assets that the national political class is lining up for him. As Charles Krauthammer pointed out, the $165 million in bonuses is less than 1/18,500 of the $3.1 trillion budget. The massive expansion of government the president is planning is forever, and will ensure you that end your days in what Peggy Noonan calls "post-prosperity America." More immediately, what message do you send to the world when legal contracts can be abrogated by retrospective confiscatory bills of attainder? You think that's going to get anyone investing in America again?

The investor class invests in jurisdictions where the rules are clear and stable. Right now, Washington is telling the planet: In our America, there are no rules. Got a legally binding contract? We'll tear it up. Refuse to surrender the dough? We'll pass a law targeted at you, yes, you, Mr. Beau Nuss of 27 Plutocrat Gardens, Fatcatville. If you want a banana republic on steroids, this is great news. So cheer on thuggish grandstanding by incompetent legislators-for-life like Barney Frank if you wish. But, in any battle between the political class and the business class, you're only fooling yourself if you think it's in your interest for the latter to lose.

The first two months of the Age of the Hopeychange have been an eye-opener. I expected it to be ideologically distasteful to me, but I didn't expect it to be so inept. Not because I had any expectations of President Obama's executive skills. But I assumed he'd have folks around him who could take care of details like governing, while he pranced around as the smiley-face hopeychange frontman. But the bench is still empty save for a handful of mediocrities. And the disconnect between the smoothly scripted mush and what's actually happening makes the telepromptered cool look even more ridiculous.