I Write Letters: $700Bn Bailout Proposal
Dear Representative Pelosi,
I am writing regarding the proposed bailout for the financial industry. According to the AP newswire, Congressional Democrats and Republicans have agreed to a $700Bn bailout. While I understand that the financial crisis is pressing and immediate action is necessary to prevent a total collapse of the economy, I am concerned about the terms of the bailout. This is a golden opportunity to win concessions on regulating the financial industry and setting terms that would create a more stable economy with a more equitable distribution of wealth that would benefit everyone overall and not just the top fraction of society. I am concerned that in the haste to throw money at the problem and appear decisive, Democrats will not press as hard as they should to set regulatory oversight and terms on the bailout. In the short run, $700Bn might solve the banks’ immediate problems. However, regulatory oversight and farsighted terms and conditions on the bailout would solve the immediate problems and set the groundwork for preventing future crises.
I support Senator Clinton’s proposals, which serve both the poor citizen facing foreclosure as well as the CEO floating to safety on a golden parachute, and I ask that you do the same.
* Secure toxic mortgage securities and create an entity modeled after the successful Depression-era Home Owners’ Loan Corporation (HOLC) or the Resolution Trust Corporation (RTC) created after the Savings and Loan crisis. This would help homeowners keep their homes and avoid foreclosure, and create stability in the market.
* Place a temporary moratorium on the most abusive stock transactions, many of which involve the “short-selling” of stocks. It would provide breathing room for the markets to recover, for investors to make accurate assessments of companies and for regulators to assess what trading practices should be permanently banned.
* Convene an emergency economic summit to show the American people their government is working together. Bringing together leaders in the administration and Congress with lenders, consumer advocates, non profits, financial institutions, and all stakeholders will allow a coordinated response to the crisis.
* Aggressively pursue and encourage mortgage modifications that would encourage lenders to voluntarily work with borrowers to keep them current on payments and in their homes. This measure would protect citizens in the long run by helping them maintain a stable roof over their heads.
* Restore competent federal oversight of the increasingly complicated financial markets. The rapid evolution of the securities and banking industry overwhelmed the current regulatory framework, resulting in a “shadow banking system” that operates outside of oversight and without accountability.
* Require transparency and accountability on executive pay. Senator Clinton has proposed the Corporate Executive Compensation Accountability and Transparency Act to impose new transparency rules on executive pay, end the accounting techniques that hide compensation, and provide shareholders a say in executive compensation packages.
* Ensure the accountability of financial institutions borrowing money from the Federal Reserve’s new lending facilities. Taxpayers deserve to know that the companies they are bailing out are on the road to recovery and aren’t throwing more good money after bad.
$700Bn is a great deal of taxpayer money, approximately as much as the cost of the Iraq war. It behooves you to ensure that it is a wise investment, one that will benefit poor, lower class, middle class, and upper class citizens as much as CEOs, and lay the groundwork for a stable economy that, while not as prone to extraordinary heights, compensates by avoiding extraordinary lows that create crushing debts and weigh most heavily on the poor, lower-, and middle- class citizens.
The wealthy will always be able to take care of themselves; such is the power of money. Your duty as a Representative is to look after the people who are less protected and ensure that they, too, benefit from a bailout plan that would create a stable economy and restore economic security for everyone, not just the top tier of society. I ask you to support a bailout plan only if it is based on economic analysis that is transparent and available to everyone to examine, and transparency and regulatory oversight. Solving the financial crisis is important, but providing money without setting conditions to address the systemic causes of the crisis will only allow the cycle to recur in the future.
As Speaker of the House, you hold unique power to lead the House Democrats in a strong stand for setting conditions on the bailout. Please do not cave into the Republicans cries of “partisanship!” as if partisanship were a flaw rather than a feature. It is imperative that the Democrats stand firm on this issue and advocate for a solution that would protect the poorest citizens as well as the wealthy.
Sincerely,
Pizza Diavola
SF, CA [zip code]
Sent to Pelosi, Boxer, and Feinstein (with appropriate edits). Feel free to take, copy, and edit.
If you are in California’s 8th District and one of Pelosi’s constituents, you can contact her here via email. If you are not one of her constituents but would like to email her anyway to show broad-based support for a transparent bailout plan with regulatory oversight and conditions that will reform the banking industry, you can contact her here in her capacity as Speaker of the House. The number for her D.C. office is (202) 225-0100.
I don’t pretend to understand all the details of the bailout and everything, but I understand a few things:
- Throwing money at a situation without any strings attached might solve the immediate crisis – or it might not, considering that a lack of regulation was a large factor in what got us here.
- Regardless, the bailout is the immediate issue at hand, but it didn’t happen overnight. In order to prevent this situation from recurring, we need to address the root causes of the situation. Throwing money at the financial services industry without setting conditions for how that money will be used is not going to address the systemic causes of the collapse.
- CEOs will always be able to take care of themselves. That’s the nice thing about being obscenely rich. People that are less well off, people that are being foreclosed on, people that are seeing their savings and investments vanish into thin are, will not, and those are the people that the bailout needs to provide for.
- The financial services industry and the government officials that they’ve bought are desperate. Nail them to the table because now is the prime time to get concessions out of them that will provide for a stable, regulated economy in the long run.
- A stable, well-regulated economy will probably not provide dizzying heights of wealth. However, those dizzying heights have only ever benefited the teeny, tiny percentage of the very wealthiest people, while everyone else suffers from an unregulated economy where they’re not protected. The bailout proposal needs to balance the concern for growing the economy and making sure that the benefits of that growth accrue to everyone, not just the top 0.0001% of society.
Call and write your senators and representatives, as well as Pelosi, Reid, Obama, Biden, and McCain, and tell them that you want a transparent proposal with oversight and conditions that will protect homeowners and non-wealthy citizens and address the systemic causes of the financial crisis as well as the immediate situation.
