Stop the Bailout!

by | Sep 22, 2008 | Stress Blog | 8 comments

[AG: A friend sent this along:]

Not that it would work, but it’s worth a try. Call or at least email your Congressman/Senator.

Contact your Congressman here. Contact your Senator.

Here’s a sample email, written by me and my friend.

Dear Congressman/Senator (insert name here),

I am writing to urge you to oppose the Treasury Secretary Paulson’s “bank bailout” proposal. Not only will this bill, if passed, force the American people to pay for the reckless behavior of financial institutions, but it will do nothing to cure the root of the economic crisis (in fact, it will only prolong the crisis). Congress must oppose the Treasury’s sinister scheme to give itself unbridled powers and to bailout Mr. Paulson’s friends on Wall Street, all at the expense of the American people. Why should I, as an honest and responsible citizen, be required to bailout the willfully negligent behavior of executives in the financial industry?

Moreover, I find Section 8 of the proposal particularly disturbing:

Sec. 8. Review.
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 bill in effect makes Secretary Paulson a “Financial Dictator” subject to no Congressional oversight and no judicial oversight. He is immune from any future prosecution with respect to his appropriations of bailout funds. This is not just my opinion, this is also the conclusion drawn amongst many media commentators across the political spectrum, including:

Why Henry Paulson must be “contained”

Finally, as you know, this proposal does nothing to address the root cause of our financial problems — that is, our fiat currency system, whereby the Federal Reserve can create money out of thin air. The Federal Reserve and its printing press creates what economists call moral hazard. Knowing that the government stands to bail them out of any disastrous situation, large financial institutions (those deemed “too large to fail”) are thus tempted to make reckless loans and investments. Thus, the machinery of the free market, the feedback process that punishes the incompetent and reckless and rewards the wise and prudent, is destroyed. And an unethical system that socializes risks is put in its place. It is time to end the moral hazard and the looting of the American people. The only way this can be achieved is if we take away the Fed’s ability to create money out of thin air and return to a sound monetary system. This is the responsibility of the Congress, as stated in the Constitution, which you have sworn to uphold.

My local political action group will be monitoring this vote closely, and will make this a campaign issue. As a public servant, either you represent the bankers, or you represent your constituents.

Thank you for your kind consideration.

Respectfully yours,

-insert your name here