This morning (9/21) I sent this to my brother and sister in Georgia and Florida respectively:
"You both live in states where you have actual voting representatives in Congress and in the Senate. Please write them all now and in as nice a way as possible tell them: Don’t give my money to crooks.
The bail out plan is horrible. It may or may not help some, but it will cost 700 BILLION dollars all of which has to come from the US Treasury and eventually from the US taxpayer. What do you, the tax payer, get in exchange? Nada, zilch the big zero with no numbers in front of it.
When the financial system melted down in Sweden, they nationalized the banking system, threw out all the crooks running the banks, recapitalized the banks and then let them pay back the taxpayer for all the money it cost. Nothing like that in this deal.
And suppose you don’t like it? Here’s what the law says: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”
This is a blank check to steal the public’s money that comes with a get out of jail free card. If John McCain is elected president, the odds are that the Secretary will be former Senator Phil Gramm, the man who with the help of Enron wrote the legislation that made all this possible and got it passed by slipping it into a must pass budget bill.
Today, e-mail your senators and representatives. Be polite but tell them, don’t give my money to crooks.
e-mail number 2:
This is the run up to the Iraq war all speeded up. Yes, there is a serious threat out there. But what changed between Monday morning, when they said, no more bail outs, and Friday, when they said $700 billion?
This is bigger than the Iraq war—at least then we had about 6 months to debate the pros and cons going to war in Irag. Quite frankly this costs more than all we have spent in Iraq in five and half years. It is just as bad as Iraq in that they don’t have any mechanism to pay for it. And it is just as bad as the Iraq war because they are playing it as if the objectives are one thing when in fact their real agenda is something else. And it is just as bad as Iraq because it appears that the Democrats are going to be as spineless now as they were then.
The supposed objective is to save the economy. Note that they talk about the financial system but do everything they can to make it sound like it is saving the economy. Sorry, this WILL NOT save the economy. Until Americans start living within their means—which will be extremely painful—we are going to be in trouble. There will be a recession if not a depression whether the $700 billion gets appropriated or not. George Bush and the Republicans from 2001-2006 screwed things up royally and there are no good options.
What the $700 billion bailout WILL do is save a bunch of folks on Wall Street from having to sell their second house in the Hamptons and their ski lodge in Aspen and so on. These guys engaged in a big Ponzi scheme only they were stupid enough to also put their money into the pot and they don’t want to be left holding the bag. (Actually, the original Ponzi had his money in the pot and was wiped out too).
I don’t know what the solution is. There are a couple of principles I would insist on: If the taxpayer puts out money the tax payer should get something in return. Ok, we buy $100 billion in bad debt from Citibank at face value; then we also get to get some piece of Citibank as part of the deal. Maybe tie it to how much we can get out of this debt: say we realize 30 cents on the dollar of debt, then we get 70 cents worth of Citi. Or we pass a $700 billion bailout package and we pay for it by raising taxes on incomes over $1 million a year to the extent that they pay for it—even if that means taxing every penny of income over $1 million (it won’t).
We will not get a real solution until people who screwed up are forced to deal with consequences of screwing up. They don’t have to be taken out and beheaded, but they have to have some real consequences for their failures. This $700 billion bill is all about removing any consequences for these guys for their failure.
Remember the Treasury Secretary, Henry Paulson, ran Goldman Sachs before he became Treasury Secretary. Under this bill he gets to decide who gets the money and CAN'T BE SUED FOR CONFLICT OF INTEREST if it all goes to Goldman Sachs. This bill makes him above the law. Nick and my Goldman Sachs mutual funds might do better under this deal (right now they are down almost 25% from their original purchase price) but let me tell you he ain’t doing for the country.