Tuesday, September 30, 2008

An open letter to my congressman and the candidates for his seat in November

Here's the text of an email I just sent to my congressman and to the candidates for his office in this November's election. I hope it does some good.
Representative Cannon, Mr. Chaffetz, and Mr. Spencer,
I am very sad to see that you voted in support of the bailout, deciding that putting vast sums of money into the hands of the already too-powerful fat-cats on Wall Street.
I believe that it is time we expected people and corporations to accept responsibility for their choices — even when the consequences are painful. As a nation, we are too quick to turn to the government to relieve us from unpleasant situations we have put ourselves in. If we can not turn ourselves from the trough, I fear for our future.
A final example of responsibility and consequences is easy to find. Continued Republican support of Wall Street over Main Street will certainly drive me, and others like me, to support other candidates in November.
Remember, there's no bailout like no bailout.

16 comments:

Tim O'Brien said...

That absolute garbage, this crisis was not a failure of Wall Street per se, it was a failure of the American people. It was a failure of the idiots who elected laissez-faire repreentatives and it was a failure of every individual who didn't stand up and demand better regulation.

If you think that this bailout package is flawed, I challenge you to take a similar position against all government intervention to encourage stabilization in a time of economic trouble. Let's do away with the pension guarantee as well and just let millions of Steel workers starve in PA and MI.

You've been caught up in the class warfare talk, and you don't realize that the economics call for intervention to shore up liquidity.

pate said...

Tim,
You're right, we're at fault for the government that we've elected, and it's time to make a change.

That Wall Street needs better regulation doesn't mean that they also need a handout.

If intervention is needed to stabilize the economy, let's ensure that the intervention benefits everyone, and that it comes with some significant oversight -- and that the politicians who have steered us into the crisis bear the consequences of their actions.

Srdjan said...

Tim O'Brien: Class warfare talk? Are you serious? We're not talking here about no intervention, we're talking about an intervention in a place that needs none.

They've put themselves there. Sure, we can blame the people and government, but why is no blame being assigned to those who chose to ignore responsibility? I advise you to read this article: http://bits.blogs.nytimes.com/2008/09/18/how-wall-streets-quants-lied-to-their-computers/

There was willful ignorance of risk at the highest levels of financial institutions, all to make more money. I'm sorry, but they do not deserve a bailout. The people in a mortgage crisis do.

blowmage said...

Wall Street didn't fail. The mortgage crisis was brought about by government mandate. Fanny and Freddie simply hid the bad debt in good debt, building a house of cards. That isn't to say private corporations weren't duplicitous, but they didn't make bad decisions on their own.

I don't know what the solution is. Its a mess no matter how you look at it. But my gut tells me that the free market didn't fail us; government interference (not oversight or regulation) failed us. I can see the argument that if government failed the financial sector, they should help repair the damage. But I honestly don't know if a bailout should happen or not.

Efialtis said...

It is really simple. We, (that is to say, YOU am ME and other Americans that live in this country and abroad) have been apathetic for FAR TOO LONG. We have allowed the government to take more and more power and authority out of our hands, to make too many laws and to take control of too many aspects of our lives.
Now, we are paying the price. We have allowed this to get out of hand. Letting the government dictate lending and financial law. Law that benefits the wealthy and the financial businesses. Then when the people who borrow cannot repay, it all falls apart. It isn't possible to loan more than you can back and then excuse every loan...yet that is the position that these entities (AIG, and Mae/Mac) are currently in.
I believe the best thing we can do is SUFFER IT OUT. Let the FDIC insurance and Mortgage insurance and the other insurances pay out for the losses of the individuals hit by this, but let the Free Market system work. Let other companies come in and take over where these individuals have failed.
Or get ready to bail out every business that finds itself at the "natural consequences" of a failed business strategy and poor financial planning.
Yes, it will be painful, but this too shall pass...

Tim O'Brien said...

This isn't a handout to Wall Street it is an intervention to make sure that we don't have catastrophic liquidity lock up. The fact that we need greater regulation and oversight is a longer-term issue that we can deal with once the crisis has been averted. If we don't do anything, then the crisis simply forces our hand, and we lose the opportunity to do anything. We simply just sit around, watching a house burn to the ground when we could've applied a realtive small amount of money to system to prevent the gears from seizing up entirely.

Telling your representative to not pass this bill simply throws the system into disarray. There are serious problems that need to be addressed, but once the tax base disappears and the global economy evaporates, we are throwing away all options.

There is a "know nothing" approach that resonates with Americans in the last few years. Tell me, before you wrote this letter, did you read the legislation in question? Did you pour over it and analyze it for the clauses that had to do with foreclosures?

You likely didn't, and if you had you probably would have noticed that there were some aggressive clauses relating to oversight. You are being swept up in the moment, this isn't reasoned objections to a piece of legislation, this is raw emotion.

Wall Street didn't "screw this up", you did. I did. There is no distinction between Wall Street and Main Street it is political rhetoric.

Tim Harper said...

Pat,

Great post! I too was excited the bailout bill didn't pass, and am disappointed in those that supported it.

This is a fantastic explanation why the bailout was a bad idea, and why bankruptcy is the solution.

It's a sure thing that government regulation and intervention are much to blame for this mess. The problem is, they can't "fix it". How can they? They can only make things worse by printing more money and inflating our economy, or compelling the citizens to fix it against their will. This is the trouble with government operating outside of it's proper role.

This bailout bill is going to get jammed through. Let's hope we can get persuade the knuckleheads that supported it to vote it down next time around.

Tim O'Brien said...

@Efialtis you have no idea what you are talking about. Let the FDIC insurance "pay for it", what? We're talking about a run on banks as the limit is only $100k. And, your argument that "we've let government blah blah blah" just doesn't hold up to scrutiny. We are the government. If anyone has screwed anything up it is the irrational, know nothing American people more interested in reading tabloid news than in electing good leaders. There is no distinction between you and the government, if you believe that there is it is only because you have failed to participate.

phoenyx said...

Unfortunately, Cannon is not up for reelection, so threatening to vote for him has no effect. The other two representatives from Utah voted nay.

pate said...

Phoenyx,
you're right. Cannon is not up for re-election. I also sent the email to the two candidates who are running.

pate said...

Tim,
are you calling Time magazine tabloid journalism? Here's a sample of what the article says:

Rather than bailing out Wall Street, we propose that the government should buy up the actual mortgages in question and do nothing else. The government should not touch any derivatives; that is, claims that do not directly tie into the actual mortgages. If money becomes too tight, then the Fed can certainly increase its loans to financial institutions.

Tim O'Brien said...

@pate, buying up mortgages in foreclosure? Seriously, you are joking. What next? Do you propose a new massive department of government employees who will start collecting debt and evicting homeowners? Let's multiply HUD's budget by twenty and start nationalizing mortgage lending instead of subsidizing private industry.

Such a plan would make $700 billion seem like a deal in retrospect. Viewing this as simply a mortgage crisis ignores the fact that the credit crisis affects more than just mortgages. We have a chance to spend a modest amount of money to prevent economic collapse. It really doesn't matter who is to blame at this point. Trust me, after the collapse, the blame games get much uglier.

Phil said...

It's too bad so many congresscritters voted for the bailout, but at least it makes it easier to decide who to vote for. It's like an instant cheat-sheet. (Or blacklist, if you prefer.)

Monte B said...

@pate - I know for a fact that Jason Chaffetz does not support the bailout although your post implied that he does/did. See this link to an article from Wall St Journal he put up on his website to show where he aligns himself on the whole bailout issue.

http://www.jasonforcongress.com/newsletters/newsletter/5011603/57473.htm

Emily said...

Great post. I was also pretty sick of Cannon and his antics. I had a conversation with one of his staffers who basically said that Cannon just knew better than all of us. I'm so glad he won't be returning for another term.

pate said...

@Monte, you're right. I had started this as a letter to Rep Cannon, then decided to include Chaffertz and Spencer to let them know how I felt. I did a poor job of reworking the letter to make that clear.