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...shutting down? The $215 billion dumped into the banking system along with the reduction of interbank discount rates by the Federal reserve and authorized by Ben Bernanke since the last week of August, has ALL gone to bail out hedge funds and feed the speculators on Wall Street.
We need to have Congress take the kind of action Franklin Roosevelt's Administration took in the worsening banking collapse in 1933, that is to take actions for protecting the economy, homeowners, and chartered banks themselves with a "firewall," from the the storm of collapsing mortgage securities, and issuing Federal credit to generate real new economic activity and public works—not to attempt to bail out the mortgage bubble.
That would be the "Homeowners And Bank Protection Act of 2007" similar to what FDR proposed back in April 1933, and which is circulating around the halls and offices of Congress right at this moment.
<snip>
The President's Message to Congress on Small Home Mortgage Foreclosures, April 13, 1933:
To the Congress:
As a further and urgently necessary step in the program to promote economic recovery, I ask the Congress for legislation to protect small home owners from foreclosure and to relieve them of a portion of the burden of excessive interest and principal payments incurred during the period of higher values and higher earning power.
Implicit in the legislation which I am suggesting to you is a declaration of national policy. This policy is that the broad interests of the Nation require that special safeguards should be thrown around home ownership as a guarantee of social and economic stability, and that to protect home owners from inequitable enforced liquidation in a time of general distress is a proper concern of the Government.
The legislation I propose follows the general lines of the farm mortgage refinancing bill. The terms are such as to impose the least possible charge upon the National Treasury consistent with the objects sought. It provides machinery through which existing mortgage debts on small homes may be adjusted to a sound basis of values without injustice to investors, at substantially lower interest rates and with provision for postponing both interest and principal payments in cases of extreme need. The resources to be made available through a bond issue to be guaranteed as to interest only by the Treasury, will, it is thought, be sufficient to meet the needs of those to whom other methods of financing are not available. At the same time the plan of settlement will provide a standard which should put an end to present uncertain and chaotic conditions that create fear and despair among both home owners and investors.
Legislation of this character is a subject that demands our most earnest, thoughtful and prompt consideration.
-- Franklin D. Roosevelt
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