The following has been submitted to Senators Durbin and Obama, and Representative Schakowsky:
I am writing in regards to the proposed bailout of the financial market. After studying the information provided by a variety of pundits and experts I have concluded that the initial proposal provided by Mr. Paulson and Mr. Bernanke does nothing to alleviate the underlying reasons for this mess. In the case of AIG we are talking nationalization, no matter how benignly it is portrayed. That act is in direct opposition to what America theoretically stands for in its economic and political philosophy.
The companies involved should be allowed to take their lumps, which are the result of their decisions aided and abetted by equally supine if not incompetent legislative and executive bodies. The repeal of Glass-Steagall coupled with the lack of effective regulatory oversight is directly responsible for the events that are now unfolding. Mr. Paulson’s proposal, as written, should not be enacted, however it is painfully clear that neither the financial titans of Wall Street nor the legislative bodies of the United States government are prepared to accept the consequences of the actions, and lack of action, resulting in this debacle.
No one so far can assure the American taxpayer that good money won’t follow bad and this bailout simply isn’t an opportunity to dig ourselves deeper into the deficit hole while rewarding poor corporate leadership. Rather than investing in our infrastructure and the needs of the most vulnerable in our society, you are embarking on a mission to continue Business as Usual (BAU). Precious revenue will be spent on assets of dubious, if any, value.
All that said, if you insist on supporting this bailout then I caution that it needs significant alteration. Anything less constitutes a betrayal of the trust of the American taxpayer. Please note this taxpayer is registered to vote, has an active blog and a very long memory!
1 – The proposal as initially written does not permit, indeed it specifically forbids, judicial oversight. This cannot be allowed under any circumstances. The Judicial Branch provides a valuable corrective to the excesses of the legislative and executive branches. The Treasury Secretary should not be allowed power above and beyond Constitutional limits, and exempting the Secretary’s decisions from judicial scrutiny is, in my opinion, unconstitutional.
2 – Executives of companies being given a bailout should have their compensation significantly reduced. They should certainly not receive more than a career professional in the Senior Executive Service (SES) is legally entitled to. America’s SES corps competently and effectively manages a multi-billion dollar enterprise, the United States Government, at vastly lower compensation than is provided to their private industry peers. If these captains of finance are unwilling to submit to such a change, let them fail. The taxpayers do not need to fund their greed.
3 – Given the questionable actions that led to such a massive commitment of government revenue, the Internal Revenue Service should be directed to conduct full compliance checks on any company accepting the bailout to ensure that they are in compliance with the Internal Revenue Code. If these companies are not solvent now, how do we know they are in compliance with the federal (let alone state) tax code? For the same reason, audits should be undertaken to ensure the accurate amount of tax revenue due the government has been paid. Companies that are not in compliance with the federal tax code should not be allowed to benefit via a bailout, nor should the American taxpayer be expected to subsidize their poor choices.
4 – The regulatory environment clearly needs to be overhauled, and it should be done with assistance from the leadership of companies that do not need and are not receiving assistance. Allowing the leadership of rescued companies to participate in such an undertaking is akin to opening wide the door to the henhouse for the fox and all his relations. What assurance does the American taxpayer have that the leaders of rescued companies will do a better job at devising appropriate regulations? They built the house of cards that is now tumbling about their ears with little to no regard for the consequences of their actions. Why should any taxpayer believe these leaders are suddenly capable of identifying and implementing the appropriate safeguards?
Difficult times lie ahead, and it may be that this is the wake-up call America needs to return to fiscal reality. In any case, do not disappoint me and millions of others by simply supporting BAU. We have an opportunity to restructure our country and economy to face a new century that is vastly different from the previous. Take that opportunity and demonstrate that you indeed are willing to move forward into the future, however uncertain it may now appear.