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Here's the automated reply Rep. David Price sends to e-mails on the Wall Street bailout, and my reply:
Thank you for contacting me about our country's financial crisis and the proposed recovery legislation. Today the House defeated this legislation, the Emergency Economic Stabilization Act, by a vote of 205 to 228, despite my support.
Like you, I do not have any interest in "bailing out" Wall Street firms and business leaders who have speculated recklessly, endangered our country's consumers and homebuyers, and resisted regulation that would protect the public interest. My concern is for Main Street - for the people depending on a sound economy and the availability of credit to buy a house or car, to run their business and meet payroll, and to save for college and retirement.
Like it or not, we are all in this together, and the entire economy is threatened as we teeter on the edge of a 1929-style meltdown. Today Wachovia Bank, a North Carolina mainstay, collapsed. But this goes much deeper than bank failures. Last week, the City of Raleigh could not find a buyer for a $300 million bond, and Wake County cancelled its planned $472 million bond issue for school construction, Wake Tech, libraries, and open space acquisition. Both have AAA bond ratings.
Although President Bush lacks the credibility to be of much help, I take the dire warnings of economic analysts very seriously, particularly in light of everything that has happened in the last few weeks. But I could not support Secretary Paulson's request for a blank check for $700 billion to purchase mortgage-backed securities and stabilize the markets.
I thus became part of the intensive discussions over the last ten days to rewrite the Treasury plan in several critical respects. The legislation which came before us today would:
o Provide strict independent oversight and accountability for all activities undertaken by the US Treasury
o Release the $700 billion in installments, with multiple reviews along the way
o Make certain that the entire $700 billion is recaptured by the Treasury and thus by the American taxpayer, by requiring that taxpayers share in any profits resulting from the government's help and providing for assessment of the financial industry for any remaining losses
o Forbid "golden parachutes" and limit other compensation for executives of participating financial institutions.
o Require the government to work with participating institutions and loan servicers to help deserving homeowners negotiate reasonable repayment terms and stay in their homes
The defeat of the bill prolongs and perhaps deepens the crisis. Coordinating with the Senate, the House will need to return within days to try again. Perhaps the economic situation will then lead some members to reconsider. Perhaps the bill can be changed in ways that attract a majority; I certainly have a list of improvements I would like to see. But considering the members who voted "no," I will want to scrutinize carefully any changes designed to attract them.
I am committed over the next few days to continue working to avert financial collapse and get the best possible deal for America's taxpayers and homeowners. I welcome and share your concern about this situation and will be glad to hear from you at any time.
Sincerely,
DAVID PRICE
Member of Congress
Dear Representative Price,
It saddens me to learn that you voted for the 700 billion bailout of rich Wall Street institutions. Do you really think that we're "all in this together?" We were not all in this together when it came to raising the minimum wage, or to cutting taxes and creating a debt for our grandkids, or the Iraq War.
The administration has spent months concocting this phoney bailout plan, and there's no doubt that they are responsible for the crisis to begin with. This is why impeachment was so important: failure to uphold the Constitution has given them breathing room to game the system once again, this time in search of a massive blank check for their rich Wall Street friends, and a political issue to use against Democrats. The fact that House Republicans voted against the measure after agreeing to vote for it should signal this to you. Can you negotiate with them on this? Can you trust them? Yes, you can: you can trust them to lie and to cheat and to put their party first.
Nonetheless, in this instance, they saved the House Democrats from themselves. You sided with the House leadership against supporting the Constitution by impeaching Bush. The current leadership was clearly wrong about impeachment, so why trust them when it comes to the bailout? Speaker Pelosi is wrong about the message sent by this legislation. The massage sent by this legislation is not that the Congress is through bailing out Wall Street: it's that this Congress will be scared and intimidated into doing absolutely anything this administration wants them to do. This is the same fearmongering scam they used to push through the authorization to use force against Iraq--you saw through it then, why not now?
You cite the failure of Wachovia as though this were some sort of evidence that this bailout needs to happen, but it actually reveals the opposite. This bailout would not have saved Wachovia, and is unrelated. Wachovia is in the process of being rescued by Citigroup, which is a signal that there is some value to saving it. The fact that other large banks and investment houses see no value in doing their own Wall Street bailout should indicate either that it's not as important as Paulson and Bernanke have claimed, or that it's actually a massive boondoggle. Already, Rudy Giuliani and others are lining up to secure government monies for their clients. When well-connected Republican politicians are ready to use this opportunity to translate the public response to this crisis into private gain, why are you still convinced that "we're in this together?"
Why do you take the dire warnings of economic analysts very seriously? There were dire warnings from security analysts about the danger posed by Iraq, after all. These same economic analysits have promised that the nation would enter an era of permanent prosperity so long as we cut taxes for the rich, so, according to them, this shouldn't even be happening, so why listen to them now? These same analyists probably thought Enron was good for the economy, that subprime mortages were a good idea, and that we'd be paying $1.50 for gas if we invaded Iraq. How do you know it will take $700 billion? How do you know that any of this will work, given that Bernanke has said he has no crystal ball and cannot foresee the future? If these economic analysts were so trustworthy, surely they would have let you know that there was a problem long ago, and you would have taken action.
The executives of participating financial institutions should have the decency to resign. They should be replaced by government employees, who should be selected using the same hiring process other government employees go through. The Treasury Department could post these positions on USAJobs as a GS-13 or GS-14, depending upon the size of the institution. 95 votes against the bailout came from Democrats. How do you know that you will want to carefully scrutinize any changes designed to attract them? For them, this bailout was too much of a giveaway to Wall Street, and I agree with them. As for the Republicans, they did this for political gain. You simply cannot continue to negotiate with them as if they had any interest in anything other than saving their own political hides.
There is no rush to get this through. If this is a priority, then let Wall Street come up with $700 billion in private capital, because that's supposedly what Wall Street is for, coming up with capital. If this were urgent, then the very smart people with advanced degrees in the financial sector would have let you know about this, and they would not have waited until the last minute. If it's so important, then let the Republicans vote for it.
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