Overnight our country witnessed the largest bank failure in U.S. history with the fall of Washington Mutual. Deposits are still secure, but WaMu's fallout only adds insecurity to the fate of our economy.
I've heard from many of you about the Secretart of the Treasury's request to rescue Wall Street. I appreciate your thoughts and want to keep hearing from you. Please send me an e-mail, or post on my blog.
I haven't seen a final bill to vote on, and until I do, I'm reserving judgement on any proposal. But I do have some concerns that I would like to see addressed. We must hold the bad actors on Wall Street accountable, there must be some assurance this plan is going to work and we need benchmarks to ensure the plan is working as intended. But above all, I believe the taxpayers--you and me--need to be protected. There must be specific safeguards in the legislation that ensure that any future earnings will be returned to you, the taxpayer.
How did we get here? The New York Times actually has a good article about it--published in 1999! Take a look, and let me know what you think.
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8 comments:
It seems that the liberal mindset wants to turn every standard into an act of discrimination. The NY Times article demonstrates that underwriting loans is a sound science and that government interference will lead to predictable results. People who were denied conventional loans in the 1980s and 1990s failed some basic financial tests.
Remember the old standard that your housing payment should not exceed a certain percentage of your take-home pay? Those rules worked! Now all taxpayers are asked to be on the hook for $700 billion because of government pressure to be "fair" to those who are financially unqualified.
Stand firm, Cathy, for accountability in this process. Demand that profits be returned to the government first. And don't agree to barriers to executive pay. The people left standing are the ones who made the wisest decisions. We want them in the game, but they won't come to the table if their compensation is capped. See Larry Kudlow's recent op-ed on this here
http://townhall.com/columnists/LawrenceKudlow/2008/09/25/give_paulson_a_clean_bill
A couple of comments. First, Paulson joined Goldman Sachs in the 70's and had been CEO since 1999 prior to accepting his present position. Is he really unbiased? I doubt it as he helped create this mess. Who among us would be unbiased in his position? It would alter most peoples judgement.
Second, you didn't mention the bills sponsored by Phil Gramm over the past 10 years that diminished banking regulation. In particular many credit his bill "commodity futures modernization act" that legalized credit default swaps (CDS's) as being central to creating the current mess. Don't you feel this had some part to play in this pending disaster?
Personally, I wouldn't be in such a hurry to pass legislation so congress can get home to campaign. But then again congress is congress and re election is unfortunately for many of your colleagues the name of the game.
This is the Lucy and Charlie Brown trick. We had congressional oversight, we had the SEC, we had the Fed...there is nothing being proposed that makes anything different, so pouring good money after bad will result in nothing helpful to the public. Why not give every American $2500 and let the market work it's way out of this?
LH
the fat cats that let this happen by making high risk investments and taking huge salaries need to sell everything they own and pay off what they can before the tax payers come to the rescue.
When my family had tough times a few years ago no one came to my rescue let alone cared.
let them sink. and let the chips fall where they may.
Unfortunately, I believe that bailing out these companies is the only way that the rest of us common folk don't get the bad end of this mess. I do believe that the heads of these companies need to be held liable for the condition that they are in and I think that the government needs to make sure that the infrastructure of these companies is redone. A pay back of this money should totally be expected in a timely manner.
Re-work those mortgages for folks facing foreclosure. The interest rates have dropped, so re-work and lower their payments to something they can afford.
If you're going to bail someone out...bail out the homeowner.
No great severance packages for the heads of companies who made stupid loan agreements.
Don't be bailing out big companies with my tax money. No one bailed me out of the taxes I owed for my small business and I had good business practices...don't be bailing out these overpaid idiots because of their greed.
What about the congress that FORCED these banks to make these loans. We need to repeal the idea that EVERYONE may not be ready to buy a home. PLEASE No bail out.
Hon. Cathy McMorris Rodgers:
Thanks for insisting upon and contending for accountability by those who must remain responsible for the financial straits they have brought upon themselves. And yet, I fully recognize the need for immediate remedial intervention.
1. As you consider and vote upon the 700 billion proposal, this citizen realizes that you know far deeper about the facts, than what we the public can know. Thus, we entirely trust and count on your solid judgment to shape legislation which is a help out, not bailout. (hand up, not hand out). The tax-payer and our government are not to ultimately pay for consequences in this situation. He who made bad decisions and profited from it gets to bear the burden.
2. What's the hurry to hastily pass this legislation...at least not until a few more hours or days of deep thoughtful considerations and cross-testing of the final bill have been exercised. The economy is working to a degree as evidenced by JPMorgan bailing out WA Mutual and the sun came up again today. Even the market responded quite well last Friday despite the horrific financial news last Thursday and Friday.
3. Polls indicate the public sentiment is still 60% or higher against any federal bail-out. So, it is most imperative that the final bill be crafted well and passes in the form that you and colleagues insist is truly best for the taxpayers (which of course is not every voter since only about half actually pay taxes)...and ultimately for your record as well.
4. Maybe our thoughts also re-focus on the illegals issue, since many of the defaulted loans occurred with no proof of income and no ID. Another weakness in lending policies...
5. This citizen is drawn toward support for legislation which is grounded in the principles of our founding fathers...if God don't promote it, don't vote it. (intentional grammar)
6. Business sectors should not be taxed more as part of any solutions...let's keep the businesses vital and jobs secure.
Thank you for your brilliant representation and diligence.
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