There are conflicting reports on a bipartisan deal on the Wall Street bailout, but I want to focus on a couple of our Democratic lawmakers who are doing a great job on this so far.
Brad Sherman, who has been a leading voice against the piece of crap Paulson plan, reports that phone calls are running 300 to 2 against the bailout. His plan calls for a much smaller price tag, along with homeowner aid. Sherman notes:
Interpreting the twisted political ways of Washington, Sherman said the plan is so unpopular that the only way it will pass is if Congress pushes it through this weekend — before members return to their districts and realize how hated the bailout is.
In addition, Pete Stark wrote one of the great Dear Colleague letters today, calling out the Treasury Secretary for his unnecessary fearmongering. I’ll put it on the flip.
It is unacceptable for Democrats to carry this bill forward and be stuck with the political consequences. It’s completely unclear whether or not it will work, and without serious changes it’s basically a gift to Wall Street executives with nothing for those who are struggling. Keep the pressure on by letting your lawmakers know that they need to be showing leadership like Reps. Sherman and Stark.
…UPDATE: Asm. Ted Lieu has a good statement too, connecting this to the need for the Governor to sign AB 1830, the mortgage bill. I’ll also put that on the flip.
Dear Colleague:
Many years ago, I was the Chief Executive Officer of a retail California bank, with assets approaching a billion dollars. I feel compelled to comment on the part of our financial system upon which ninety percent of our business and individual constituents rely.
The independent community of savings banks and credit unions are safe, sound, and liquid.
Yes, they may be suffering from higher delinquencies due to local economic problems – unemployment, lower home prices, natural disasters, etc. – but that, for the majority, results in lower profits, slower growth, and higher credit standards for potential borrowers.
For those of us who believe in a market economy, those results should come as no surprise. It should also come without question that the proposed bailout will only help reckless speculators who have been caught on the wrong side of the come line.
Yesterday, a colleague said that he was worried that banks had to pay close to six percent for “Fed funds” (day loans between banks, usually available at one to two percent, to adjust cash requirements.) Well, dear colleague, Duh! Whilst one bank paid six percent, another bank earned six percent.
Another colleague attributed to Secretary Paulson a comment to the effect that absent his bailout, folks wouldn’t be able to get cash at ATMs. That is irresponsible rumor mongering hogwash.
Please, friends, whatever you decide about the “bailout,” (and I intend to ignore/oppose it in any of the forms suggested thus far) I ask you not to create fear and incite the public to unwarranted hysteria, which actually could hurt the economy.
Sincerely,
Pete Stark
Member of Congress
… here’s Ted Lieu’s statement:
For months now, California has been playing a leading role in finding solutions to the mortgage meltdown and credit crisis. In the Assembly we know this is not a problem that happened overnight and we know that there won’t be any magic solutions that will happen overnight. That is why my colleagues and I are urging that the Bush Administration’s Wall Street Bailout be done not just in a timely manner, but also done right.
Let’s set aside for now the chutzpah of Treasury Secretary Hank Paulson for demanding the largest taxpayer bailout in the history of the free world, demanding that he should get unfettered discretion to spend this largesse, and demanding that all of this be done in less than a week. The question we should ask is, why should we trust him? Secretary Paulson saw this crisis coming, it is on his watch, and he has repeatedly failed to act in a timely manner. Remember Paulson’s “Hope Now” solution to prevent foreclosures that he hyped at the beginning of this year? I, consumer groups, and countless others repeatedly warned that Secretary Paulson’s plan did virtually nothing to resolve the problem of unsustainable lending and uncontrolled foreclosures. He proceeded with window dressing when fundamental reform was needed.
Secretary Paulson is now demanding that his last-minute bailout plan be jammed through in less than one week with no conditions. There is no logical reason why the bailout plan cannot both be done in a timely manner and include fundamental and much needed reforms, such as banning the predatory practices that led to this crisis, fixing executive compensation, and helping homeowners facing foreclosure.
The nation’s financial crisis has many moving parts and every level of government has a role to play. For our part, the California legislature recently took a leadership role in developing solutions to this crisis by passing AB 1830 on a bipartisan basis to reform predatory practices and products in California’s mortgage industry. I call on Governor Schwarzenegger to demonstrate leadership on the issue and sign AB 1830. Maybe he can also send a copy to his friends in the Bush Administration. Language similar to AB 1830, incorporated into the Wall Street bailout plan, would greatly improve the plan.
