No Blame Warranted, Only Thanks: The Bailout Fails

Today was a good day for America. Blame? What Blame? Just, THANK YOU, brave members of the House of Representatives who voted No on the so-called Emergency Economic Stabilization Act.

This is the letter I wrote to my political leaders after today's happy defeat of the proposed Act. I also mailed this message mutatis mutandis to the Obama and McCain campaigns. If you wish to express your disapproval of a Secretary Paulson-based plan, in favor of a plan that addresses the root cause of the credit crisis and that gives relief to the victims of the bankers Paulson's plan would reward, I urge you speedily to write to your policital leaders at Congress.org and to urge your like-minded friends to do the same.

Message sent to the following recipients:
Secretary Henry Paulson
Representative Don Young
Senator Lisa Murkowski
Senator Ted Stevens
President George W. Bush

Robert Elston
[Street Address]
Juneau, AK 99801

September 30, 2008

[recipient address was inserted here]

[recipient name was inserted here],

I want to express my thanks to Representative Don Young for having the courage to vote No on the so-called Economic Stabilization Act. That bill was fundamentally flawed and would have enacted an unprecedented boondoggle that rewarded the financial institutions whose unscrupulous practices caused the current financial crisis, that put too much power into the hands of a man who has too many conflicts of interest with the financial companies that stood to gain, and that did not address the root problem and thus was destined to fail, both in the long and short terms.

Secretary Paulson's approach needs to be scrapped because it protects and further enriches the perpetrators and does not rescue the victims. Instead of a bill that bails out investment banks and other unscrupulous companies, that keeps the hen house under the guard of the foxes, and that spends future taxpayer revenues, adding nearly ten percent to the already obscene national debt, Congress should enact a bill that costs the taxpayer nothing and teaches Wall Street needed lessons by making it suffer the consequences of its risky actions. This bill would address the root cause of the financial crisis by focusing narrowly on judicial loan modifications for at-risk homeowners. This focus would stem the tide of foreclosures, thereby resolving the credit crisis, and alleviate the pain of homeowners instead of bailing out rich bankers while leaving homeowners unprotected.

What bothers me about Secretary Paulson's plan is that it focuses on bank bailouts and leaves mortgage foreclosure mitigation as a secondary, discretionary issue. Instead, foreclosure mitigation should be the primary and non-discretionary backbone of the bill, and bank bailouts should not be included at all. Quite frankly, I do not trust Secretary Paulson, or any forthcoming Secretary of the Treasury, to act on behalf of American interests, because he and likely candidates in the next administration, whether Republican or Democrat, have conflicts of interest deriving from their past professional associations. He has too many friends and former associates in whose interests he would be inclined to act. The American public would be derelict of citizenship and its House of Representatives and Senators would be derelict of duty to cede wholesale discretion to a single man who is an insider to the investment banking industry.

Please consult the plan outlined by the Center for Responsible Lending.
This plan notes the problems with the Paulson plan and recommends a simple remedy of empowering homeowners with the recourse of renegotiating their home loans through the judicial system. The current HOPE act is not sufficiently empowering; the Center for Responsible Lending's plan would broaden the powers of the court to force a recalcitrant lending industry to lighten loan terms. It is telling that the industry decried the defeat of an act today that would have enriched it further and relieved it of the consequences of its profiteering actions, but it has been lobbying against giving the courts greater power to act in the interest of homeowners who seek to soften the terms of their loan contracts so that they can avoid foreclosure.

Please DO NOT ACT IN THE INTERESTS OF THE BANKING INDUSTRY MALEFACTORS, BUT DIRECT YOUR BILL TO MITIGATE HOME FORECLOSURES IN THE INTEREST OF HOMEOWNERS, AT NO RISK TO THE TAXPAYER.

Sincerely,

Robert Timothy Elston