An Open Letter to Congress
As an American citizen with a deep love for my country and a life-long Republican loyal to the principles of our Founders, I urge you in the strongest possible terms to cast your vote in the People’s House against the Bailout Bill.
By enacting this odious piece of legislation the US Congress will be, in all likelihood, putting in charge of “rescuing” our economy the same collection of corrupt liberal Democrats responsible for creating this problem in the first place. Why hand to a potential President Obama and his Treasury Secretary (Secretary Raines, perhaps) such unprecedented authority, checked only by congressional oversight – which is likewise in the hands of complicit liberals like Barney Frank and Chuck Schumer – over the nations entire housing and credit markets? This is akin to handing a loaded firearm to an unsupervised toddler.
The fact remains that the same coalition of hard-left Democrats (I like to call them Dubya-Dems) and Big-government Republicans that tried to force illegal immigrant amnesty down our throats and gave us such big-ticket boondoggles as Medicare expansion, the federalization of education, and campaign-finance reform now want to force a big-government bailout/takeover of the reckless financial industry. To get there they are using the same playbook as before: scare the hell out of people by calling the current issue a crisis, then insist that only their big government socialist solution can possibly correct it.
But the American people are not buying it – and not because, as the smug and condescending elites suggest, we regular Americans don’t understand the cause, complexity, or comprehensiveness of the problem. We understand it all too well. What we understand is that at the root of the problem lie the lax and at times predatory lending practices utilized by greedy banks and mortgage companies to push unaffordable loans on equally greedy and unqualified borrowers who sought irresponsibly to live well above their means.
We understand that through government manipulation, the natural and efficient supply/demand mechanisms of the housing market were warped by an artificial increase in demand as more and more heretofore unqualified buyers flooded the market creating a housing bubble which was bound to eventually burst – as do all market bubbles. We understand that this house-of-cards worked only so long as housing prices kept increasing as those who could not make their variable-rate mortgage payments in a rising interest-rate environment could simply sell their home at a profit to satisfy their debt obligation. As housing prices began to level off a flood of homes entered the market as these sub-prime borrowers attempted to sell all at once to pay off their risky mortgages. This caused a spiral of price depreciation and loan defaults.
We understand that wall-street whiz kids created with many of these bad mortgages exotic and opaque derivative securities instruments which could not withstand the inevitable downturn in the housing market and sold many of these sub-prime loans to the eager and government-backed Fannie Mae and Freddie Mac – eliminating their own downside risk, and thus encouraging more risky loans as the free-markets’ natural risk/reward balance was compromised.
We likewise understand that the genesis of this problem was the creation by liberal Democrats in the 1970’s of the Community Reinvestment Act and its reckless expansion, also by liberal Democrats, in the 1990’s in order to artificially increase minority home ownership.
We understand that the corrupt leaders of the government-backed mortgage giants – Fannie’s Harold Raines and Jim Johnson, among others – used their clout and influence to encourage and even coerce private-sector lenders to make ever more risky loans to ever more unqualified buyers both for political purposes and to greedily enrich themselves. They then bribed corrupt Democratic congressional leaders such as Barack Obama, Barney Frank, and Chris Dodd with massive campaign contributions to preempt the good-faith reform efforts of Republicans in congress, the White House, and at the Federal Reserve which had all warned of the systemic dangers these risky practices posed to our economy.
The fact remains that the government caused this problem by using its influence to meddle with the free market; it now wants to correct the problem by meddling some more.
We the people may not all have MBA’s or Law degrees from Harvard like Bush or Obama, but neither are we stupid or gullible enough to hand over a trillion dollars and control of the US financial system – the backbone of our economy – to the same Marxists who brought it to the brink in the first place.
What the American people demand and deserve are simple and sensible, free-market-based solutions we can apply to the credit problem our economy faces that do not further distort the relationship between the government and the private sector economy. The following is but a small sample of such measures: repeal the CRA; privatize and liquidate Fannie and Freddie; cut or eliminate capital gains and/or income taxes on corporations and individuals to free up private capital; eliminate the mark-to-market accounting rule that is pushing otherwise solid companies into insolvency; increase the FDIC deposit insurance level. These and other free-market reforms can alleviate the current credit crunch while spurring real, sustainable economic growth without lumping another trillion dollars onto the national debt and distorting the natural mechanisms of our capitalist system.
Just as Franklin Delano Roosevelt’s misguided trade and economic policies exacerbated and made more painful the Great Depression, handing control of our financial system to the selfsame liberals who caused its current troubles is a recipe for disaster and must not be allowed.