My letter to my Congressmen
Dear Senators Durbin and Obama and Representative Emanuel:
I’m writing to ask you to oppose Secretary Paulson’s proposal for a blank check to bail out the financial industry. While some form of government intervention may be essential to safeguard the economy, it doesn’t make sense to funnel taxpayer funds, without restrictions, to the very people that got us into this mess.
Privatizing profit and socializing risk is no way to run our economy. It’s disconcerting that the very people who have enshrined personal responsibility and the perfect utility of the free market are being rescued by the public from their own mismanagement.
I support the conditions given by Robert Reich as preconditions for any bailout, namely:
1. The government (i.e. taxpayers) gets an equity stake in every Wall Street financial company proportional to the amount of bad debt that company shoves onto the public. So when and if Wall Street shares rise, taxpayers are rewarded for accepting so much risk.
2. Wall Street executives and directors of Wall Street firms relinquish their current stock options and this year’s other forms of compensation, and agree to future compensation linked to a rolling five-year average of firm profitability. Why should taxpayers feather their already amply-feathered nests?
3. All Wall Street executives immediately cease making campaign contributions to any candidate for public office in this election cycle or next, all Wall Street PACs be closed, and Wall Street lobbyists curtail their activities unless specifically asked for information by policymakers. Why should taxpayers finance Wall Street’s outsized political power – especially when that power is being exercised to get favorable terms from taxpayers?
4. Wall Street firms agree to comply with new regulations over disclosure, capital requirements, conflicts of interest, and market manipulation. The regulations will emerge in ninety days from a bi-partisan working group, to be convened immediately. After all, inadequate regulation and lack of oversight got us into this mess.
5. Wall Street agrees to give bankruptcy judges the authority to modify the terms of primary mortgages, so homeowners have a fighting chance to keep their homes. Why should distressed homeowners lose their homes when Wall Streeters receive taxpayer money that helps them keep their fancy ones?
Please oppose any unrestrained bailout.
It’s shouting into a tornado, sure, but what else are you going to do?