Don't Make Working People Bail Out Wall Street
This country faces many serious problems in the financial market, in the stock market, in our economy. We must act, but we must act in a way that improves the situation.
This bill does not effectively address the issue of what the taxpayers of our country will actually own after they invest hundreds of billions of dollars in toxic assets. This bill does not effectively address the issue of oversight because the oversight board members have all been hand picked by the Bush administration. This bill does not effectively deal with the issue of foreclosures and addressing that very serious issue, which is impacting millions of low- and moderate-income Americans in the aggressive, effective way that we should be. This bill does not effectively deal with the issue of executive compensation and golden parachutes. Under this bill, the CEOs and the Wall Street insiders will still, with a little bit of imagination, continue to make out like bandits.
This bill does not deal at all with how we got into this crisis in the first place and the need to undo the deregulatory fervor which created trillions of dollars in complicated and unregulated financial instruments such as credit default swaps and hedge funds. This bill does not address the issue that has taken us to where we are today, the concept of too big to fail. In fact, within the last several weeks we have sat idly by and watched gigantic financial institutions like the Bank of America swallow up other gigantic financial institutions like Countrywide and Merrill Lynch. Well, who is going to bail out the Bank of America if it begins to fail? There is not one word about the issue of too big to fail in this legislation at a time when that problem is in fact becoming even more serious.
This bill does not deal with the absurdity of having the fox guarding the hen house. Maybe I'm the only person in America who thinks so, but I have a hard time understanding why we are giving $700 billion to the Secretary of the Treasury, the former CEO of Goldman Sachs, who along with other financial institutions, actually got us into this problem. Now, maybe I'm the only person in America who thinks that's a little bit weird, but that is what I think.
This bill does not address the major economic crisis we face: growing unemployment, low wages, the need to create decent-paying jobs, rebuilding our infrastructure and moving us to energy efficiency and sustainable energy.
There is one issue that is even more profound and more basic than everything else that I have mentioned, and that is if a bailout is needed, if taxpayer money must be placed at risk, whose money should it be? In other words, who should be paying for this bailout which has been caused by the greed and recklessness of Wall Street operatives who have made billions in recent years?
The American people are bitter. They are angry, and they are confused. Over the last seven and a half year, since George W. Bush has been President, 6 million Americans have slipped out of the middle class and are in poverty, and today working families are lining up at emergency food shelves in order to get the food they need to feed their families. Since President Bush has been in office, median family income for working-age families has declined by over $2,000. More than seven million Americans have lost their health insurance. Over four million have lost their pensions. Consumer debt has more than doubled. And foreclosures are the highest on record. Meanwhile, the cost of energy, food, health care, college and other basic necessities has soared.
While the middle class has declined under President Bush's reckless economic policies, the people on top have never had it so good. For the first seven years of Bush's tenure, the wealthiest 400 individuals in our country saw a $670 billion increase in their wealth, and at the end of 2007 owned over $1.5 trillion in wealth. That is just 400 families, a $670 billion increase in wealth since Bush has been in office.
In our country today, we have the most unequal distribution of income and wealth of any major country on earth, with the top 1 percent earning more income than the bottom 50 percent and the top 1 percent owning more wealth than the bottom 90 percent. We are living at a time when we have seen a massive transfer of wealth from the middle class to the very wealthiest people in this country, when, among others, CEOs of Wall Street firms received unbelievable amounts in bonuses, including $39 billion in bonuses in the year 2007 alone for just the five major investment houses. We have seen the incredible greed of the financial services industry manifested in the hundreds of millions of dollars they have spent on campaign contributions and lobbyists in order to deregulate their industry so that hedge funds and other unregulated financial institutions could flourish. We have seen them play with trillions and trillions dollars in esoteric financial instruments, in unregulated industries which no more than a handful of people even understand. We have seen the financial services industry charge 30 percent interest rates on credit card loans and tack on outrageous late fees and other costs to unsuspecting customers. We have seen them engaged in despicable predatory lending practices, taking advantage of the vulnerable and the uneducated. We have seen them send out billions of deceptive solicitations to almost every mailbox in America.
Most importantly, we have seen the financial services industry lure people into mortgages they could not afford to pay, which is one of the basic reasons why we are here tonight.
In the midst of all of this, we have a bailout package which says to the middle class that you are being asked to place at risk $700 billion, which is $2,200 for every man, woman, and child in this country. You're being asked to do that in order to undo the damage caused by this excessive Wall Street greed. In other words, the "Masters of the Universe," those brilliant Wall Street insiders who have made more money than the average American can even dream of, have brought our financial system to the brink of collapse. Now, as the American and world financial systems teeter on the edge of a meltdown, these multimillionaires are demanding that the middle class, which has already suffered under Bush's disastrous economic policies, pick up the pieces that they broke. That is wrong, and that is something that I will not support.
If we are going to bail out Wall Street, it should be those people who have caused the problem, those people who have benefited from Bush's tax breaks for millionaires and billionaires, those people who have taken advantage of deregulation, those people are the people who should pick up the tab, and not ordinary working people. I introduced an amendment which gave the Senate a very clear choice. We can pay for this bailout of Wall Street by asking people all across this country, small businesses on Main Street, homeowners on Maple Street, elderly couples on Oak Street, college students on Campus Avenue, working families on Sunrise Lane, we can ask them to pay for this bailout. That is one way we can go. Or, we can ask the people who have gained the most from the spasm of greed, the people whose incomes have been soaring under president bush, to pick up the tab.
I proposed to raise the tax rate on any individual earning $500,000 a year or more or any family earning $1 million a year or more by 10 percent. That increase in the tax rate, from 35 percent to 45 percent, would raise more than $300 billion in the next five years, almost half the cost of the bailout. If what all the supporters of this legislation say is correct, that the government will get back some of its money when the market calms down and the government sells some of the assets it has purchased, then $300 billion should be sufficient to make sure that 99.7 percent of taxpayers do not have to pay one nickel for this bailout.
Most of my constituents did not earn a $38 million bonus in 2005 or make over $100 million in total compensation in three years, as did Henry Paulson, the current secretary of the Treasury, and former CEO of Goldman Sachs. Most of my constituents did not make $354 million in total compensation over the past five years as did Richard Fuld of Lehman Brothers. Most of my constituents did not cash out $60 million in stock after a $29 billion bailout for Bear Stearns after that failing company was bought out by J.P. Morgan Chase. Most of my constituents did not get a $161 million severance package as E. Stanley O'Neill, former CEO Merrill Lynch did.
Last week I placed on my Web site, www.sanders.senate.gov, a letter to Secretary Paulson in support of my amendment. It said that it should be those people best able to pay for this bailout, those people who have made out like bandits in recent years, they should be asked to pay for this bailout. It should not be the middle class. To my amazement, some 48,000 people cosigned this petition, and the names keep coming in. The message is very simple: "We had nothing to do with causing this bailout. We are already under economic duress. Go to those people who have made out like bandits. Go to those people who have caused this crisis and ask them to pay for the bailout."
The time has come to assure our constituents in Vermont and all over this country that we are listening and understand their anger and their frustration. The time has come to say that we have the courage to stand up to all of the powerful financial institution lobbyists who are running amok all over the Capitol building, from the Chamber of Commerce to the American Bankers Association, to the Business Roundtable, all of these groups who make huge campaign contributions, spend all kinds of money on lobbyists, they're here loud and clear. They don't want to pay for this bailout, they want middle America to pay for it.
The bailout package is far better than the absurd proposal originally presented to us by the Bush administration, but is still short of where we should be. We can do better.
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All that would need to be done is change that horrible "No-Bankruptcy" bill bush signed as soon as he stole '04 and the economy would be right back on track.
Read this:
http://www.nytimes.com/2008/10/02/opinion/02thu1.html?ref=opinion
Given the increasing trend of our politicians to impoverish America; essentially "raping and pillaging" the very people they claim to espouse, and given the disastrous administration of George Bush (among others), I had lost all hope of hearing any intelligent discourse (by anyone regardless of their party or place). I was astounded to find in Senator Bernie Sanders what I thought had become an extinct animal in the world of politics. Someone that stood up and pointed out the obvious in terms everyone can understand, addressing core issues, and pointing out the obvious that this situation is precisely the result of greed agenda rampant throughout our entire infrastructure; a thralldom with "money and power" absolutely choreographed and intentional to ensure profit to a select few - with an utter disregard of the collective whole.
Particularly infuriating: how C-SPAN and other networks selectively choose the materials they present to the public. So far the only one I found that immediately observed Sander's well informed observations was the Huffington post. Instead, we get more rhetoric and propaganda - and a big blank check to Secretary Paulson of Goldman Sachs????- (WTF?) whom has been given complete exemption from accountability -- another WTF. *Section 8 of Paulson’s plan states: “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.*
PLEASE POST THE ENTIRE VIDEO OF SANDERS TALK FOR THE PUBLIC!
I was one of the 48,000 people who signed your petition, emailed links to my friends and family, and posted links here on HuffPo.
Keep up the great work, Sen. Sanders!
Keep being the voice of reason and honesty.
Thanks for bringing up the CEO compensation "limitations," which are in fact virtually nonexistent. In a closed conference call with the Treasury and selected investors, Wall St was told not to worry about limits to their multimillion dollar bonuses, since there are ways around the regulations. An audio of this call (sept 29) is posted on youtube.
Thank you, Senator Sanders. You see the truth.
And why has nobody in the MSM mentioning China's role in this, or how our government has put us in this position?
The following is from a highly respected daily paper in Germany, called Die Zeit.
(for the full story, go to: http://watchingamerica.com/News/7388/the-new-money-power/
The New Money Power
By Frank Sieren
25 September 2008
How Peking forced its biggest debtor, the USA, to negotiate the financial crisis
"The Chinese Central Bank was an important player in the U.S. financial crisis right from the beginning.
"The Chinese didn’t only jump in with U.S. financial investor Blackstone, which since has lost much of its previous value, but also with Morgan Stanley. "
"...the Chinese had put 376 billion dollars into the...Freddie and Fannie duo... it became abruptly apparent to Chinese creditors that both were on the rocks...July until the beginning of September they sharply decreased their support. ..."
"...at the opening of the Olympic games when President George W. Bush met with leaders of the Chinese government. ..the Chinese didn’t beat around the bush for very long. The liabilities were to be taken over by the state, they demanded...it wasn’t just the heat during the ceremonies that was causing George W. Bush to perspire....If you don’t pay it back, we’ll have to convert our dollar holdings to Euros...And who will be willing to loan you any money in the future if we won’t?"
And these are the same capitalists who beat the red drum against communism/socialism, and in their infinite wisdom and self-interests, they have surrendered to Chinese communism/socialism, which begs the question:
Was communism/socialism ever really a threat?
THE BAILOUT MONEY WILL GO TO FOREIGN SOIL, NOT "MAIN STREET"
The Senate was sold a crock!!! It may not be too late to stop it. Read and pass along:
http://globaleconomicanalysis.blogspot.com/2008/10/rep-brad-sherman-on-bailing-out-foreign.html
the Senate knows exactly what it was doing.
as will the House...
I've been wondering when China would threaten our government with converting all the Dollars they hold into Euros. As we become weaker and weaker, it's bound to happen.
So, my question is now.....if China is demanding we take toxic paper off their hands, who is going to loan us the money to do so? We borrow most of our deficeit from China. Are we simply converting toxic investments to TBills and handing them over to China? And, if this is the case, where does it end? Why would China not realize they have the upper hand and continue the extortion?
They send us toxic toys, contaminated pet foods and now powdered milk laden with toxic chemicals....300 million pounds this year alone. This milk powder has been used in baked goods like cookies and candies and consumed by unwitting Americans. Yet, our FDA has barely whispered a word about it -- apparently we will let the rest of the world do the ground work and lie to the people about the safety of the American food supply
America needs to wake up and show China that it can't push us around. It's time to stop buying their garbage and spend a little more to keep our money at home.
I just began to realize this a few days ago. It's the Chinese who are demanding that Wall Street and the US government make good on the junk Wall Street sold as triple A (meaning it was supposed to be good, but it wasn't -- and the sellers knew damn well it wasn't good).
Keep it flowing Sen.Sanders ! Thanks
No, Senator, you are NOT the only person who thinks so. Not at all.
Please continue your good work.
Bernie, you keep saying the "we" didn't have anything to do with this mess. However, you ignore the fact that the "toxic assets" are the mortgages of people living in houses they can't afford. Unless you ostricize "those" people from "we" or you accept the fact that we indeed have to something to do with this mess. The average US household has NEGATIVE savings. Guess what Bernie: US IS we.
You can focus the blame as much as you want onto financial institutions all your socialist heart desires; it is most certainly your right to be wrong, as it is the right of the ignorant to nod their heads in mindless approval. But just because you have the right doesn't make you right.
If WE don't take responsibility for the mess that WE are in then WE will all have plenty of time on our hands to point fingers.
How about some ways to fix this mess for less than 700B USD:
Suspending mark-to-market altogether, or implementation of a sober valuation system, increasing the FDIC rate (which looks at be part of the new plan), creating a capital gains tax holiday season to lubricate the market (*gasp*), or giving judges flexibility to restructure mortgages in bankruptcy court are all low cost ways to bring stability to the market without putting taxpayers on the hook for every distressed residential property in the country.
If you are not part of the solution Bernie, you're part of the problem.
Us IS NOT WE, not ALL of us.
Eight years ago, my family made about half of what we make now. And we lived better. About that time we bought a starter home, within our means in a community with great schools. Our family and friends turned up their noses, choosing much more posh residences. We went with a local bank who did not sell their mortgages, and a bi-weekly option, and put a sizable chunk down....
Thank god. Because here we are in 2008, we can still afford our mortgage payments. Several of our friends are now living in apartments, having lost their homes due to sketchy motgage lending practices, and overextending themselves on sprawling residences....
However, my family that doesnt use credit cards, saves for christmas and a vacation every year, and sticks to a monthly budget has had to endure " going without" more times than I can count because the price of gas, heating fuel, health insurance premiums, prescriptions, and groceries
has skyrocketed since we purchased our first home.
God Bless Bernie Sanders. Why make the greedy rich twice on our dime?
Waddaya mean We, Kimosabe? Three decades of Reganomics -- like your plan for yet more fat-cat tax cuts -- have gutted the middle class and transferred nearly all wealth to the top percent. That's why people can't afford their mortgages. Enjoy your neocon myths. They won't protect you when the mobs come.
It was thirty years ago, but I was a bartender at the Montpelier Tavern Hotel and served drinks to the Representatives....oh I wish I was there now!
What this bill also does not address, and is the crux of all problems to be addressed, is what dumping more fiat currency into our system does to our dollar. It destroys it.
We need to end the Federal Reserve or else we lose our ability to have a sovereign country with liberties and freedom. Already the DSA is pressuring global financial socialists to oversea our currency.
Why is this a purposeful event Mr. Sanders? These are the questioins to be answered. The answers must keep us fighting for our Constitution and Liberty.
End the Fed is a good start. Please, support HR 2755.
Thank you for your service to our country and to your constituents. You have not sold out or forgotten why you are there.
TURNS OUT THAT THe BAILOUT BILL IS NOT ABOUT AMERICAN BANKS OR ASSETS.
THE TRUTH WAS OUTED TUESDAY ON CNBC's KUDLOW SHOW BY Rep. BRAD SHERMAN (D-CA).
It is not to protect you. It's not to protect Main Street. Its not even about Wall Street.
No, its about Shanghai, London, Berlin and Sydney.
The truth is that we are going to be paying taxes to cover the bad foreign investments.
When Paulson was called on this he had the gaul to say the bill will be vetoed if this is changed.
25% of the U.S. is going to go whisking out of this country !
This deserves an impeachment petition immediately !
More at http://supportedthebailout.org and http://FedupUSA.org.
CALL YOUR CONGRESSPEOPLE! THIS BILL MUST NOT PASS.
Yes, Paulsen has insisted that junk bought by foreigners be covered. The Chinese, Japanese, Europeans want to sell back their junk -- threatening to withhold credit.
As I watched you debate and fight for the people on C Span, I was saddened by how very few there fighting for us.
Well done sir.
BTW, Coburn should release all the holds he put on the bills "to save taxpayer money".
He voted yes. He is a hypocrite.
Thank you and keep fighting in the corrupt Senate. Hopefully Americans will vote for new Senators who will fight with you.
You can blame Senator Obama as much as you like but the problem is the MAJORITY. YOU are the majority and YOU continue to overwhelmingly elect Senators and Representatives that do not have the best interest of ALL AMERICANS. You are easily swayed by your emotions and you fail to analyze and use your intellect. Sarah Palin is a perfect example of this mentality. If she can't recognize ONE single source where she gathers information from, then it should signify that she does not have a quest for knowledge. If you expect Senator Obama to make the necessary changes, then YOU need to change. If many of YOU will VOTE for the type of politicians that are logical, intellectual, and can reach solutions even if they do not always agree with them, then you will give a politician like Senator Obama a practical chance to make changes. All politicians should have a mutual purpose when they seek political office - to positively progress the nation for its citizens.
Americans need a CITIZENS REVOLT. Every citizen should review every bill and/or legislation that has been authored, co-authored, supported, or denounced by your Congressperson and if that person does not promote your interests, organize a campaign to ensure they are voted OUT OF OFFICE. That's the only way a real change can happen. You have to remove the greedy, manipulators out of Washington.
It's all a scam! - Just like the spoiled kid that takes his ball and bat and goes home because he can't make up his own rules. The banks have seized up the credit because they want Congress to bail them out. What a bunch of suckers we are. Write your Representative and tell them to vote no to cry baby brats!
I saw your speech on the floor yesterday. Thank you for standing up to these crooks and actually REPRESENTING We The People!
We will remember this and when the Fed Reserve Notes we hold are worth nothing you will be one of the few people from the old order we will trust.
Thank you, Bernie. Good perspectives. Why not add to the wish list something that will encourage honesty, good faith, courtesy, and respectful customer service for these shameless sharks in the banking business? Ask them to forego mindless and greedy service charges, usurious financial penalties, vicious chiseling schemes, and "gotcha" interest increases.
Not so long ago, the man in the White House, slightly embarrassed that some of his gang got careless, decreed that they should take courses in ethics. Why not add to the legislative package a rule declaring that banks must be honest and ethical in dealing with their customers, that customer service training must be a serious concern at all levels, and that exploitative banking policies will be penalized? Unless these people join the human race, why should we have to pay for their poor judgment, their arrogant decisions, and their predatory practices?
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