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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Perfectly written; thank you Senator!
It's not just the predatory mortgages, it's that they were rolled up repeatably and sold repeatably over and over again.
Essentially Wall Street found a way to once again sell JUNK just as it was caught doing in the 1980's.
And just like the 1980's, less than handful of persons will be held accountable.
Law with severe criminal consequences and punishments is needed that is applied to ALL financial instruments uniformly specifying their exact verifiable worth, origins, risk, and ownership.
Nice bluster. Why didn't the outraged, independent Senator filibuster?
See Neil Grossman's Profile
The doctors do make sure they understand the problem before delivering the treatment,
What?
A lot of 'em guess, Neil.
Senator Sanders, with all due respect, when there's an emergency coming in the hospital doctors and surgeons don't waste their time philosophying on the goods and bads of health care systems.
They stabilize the hurt bodies to avoid deaths.
The credit crunch is killing companies all around the world just now, because nobody trusts nobody.
This might be the Wall Street traders' fault, the bankers' fault, Phil Gram's fault, the scam of the swaps' fault, whatever.
Companies can't work without open lines of credit. The American government can't work without Chinese and Russian lines of credit. The average Joe can't survive without lines of credit. Credit has to be available. The bailout plan has to be passed.
Then you'll have time for philosophy. Philosophy is pretty nice with a full belly. It's not that interesting on an empty stomach.
Ill considered comparison: the human body and our convoluted, corrupted, dishonest economic system? Nah not even close, or an exercise worth spending any time.
Swing and a miss comment.
Philosophy is also shallow and not that interesting when it comes from a dishonest, shallow mind that is not quite up to the challenge of philosophical exercises.
The human body works on and sticks very close to its core principles- chemistry, thermodynamics, cellular physiology, etc. Very precise and honest.
Politics and philosophy are "hand in glove" champ. Stick to the Funny pages.
Cheap and easy credit is what got us in this mess in the first place. I think companies are going to need to reevaluate the way they do business...earn the money before you spend it.
This is why I have become an independent, because the republicans AND democrats passed this bill in the Senate last night, and probably will in the house, and it utterly makes me sick to my stomach. For anyone voting for McCain or Obama, is there any difference between these two candidates, or even the parties anymore? And anyone who argues the war, pro or con, they voted to authorize Bush the power to invade Iraq with a Bipartisan vote too. Sure they talk to their base to rev them up, but they govern side by side, and I wish we could throw them all out, cause this a club that has a monopoly on this system. Come on people, time to make a change in this country, and lets break the two party system!
I too was disappointed that Obama is pushing for this. He was summoned to Washington and he
was bought is my conclusion. We are loooking for change but that will be the LAST thing we can
expect in our lifetime. The going is too good for that slime. Just look what the bailout contains
and you know the purpose. I shall vote for Obama but I have no hope left. We deserve what we
get every time.
I agree.
The failure of this two party system is what I believe brought us Sen. Bernie Sanders, from Vermont.
Where is that independence he represents in the Senate?
He went there, and now it is go along to get along.
I stay sane by believing that Obama is just lying to everyone and pretending to be a regular partisan hack, when really he intends to kick ass and take names when he gets in office. I want to believe.
Check out the packages some of these guys got. It's not a crisis for everyone !!
http://money.cnn.com/galleries/2008/fortune/0809/gallery.ceos_banking.fortune/index.html?cnn=yes
Once again the U.S. taxpayer is getting the shaft. The 1st American Revolution was to overthrow the tyranny of a foreign ruler. When does the 2nd Revolution overthrow the tyranny of homegrown plutocrats?
The taxpayer is paying the bill either way, even without the bailout. A lot of people are going to lose their jobs and unlike the big boys responsible for this mess, the middle class don't get a multimillion farewell package when they are laid off.
Just getting rid of the current set of plutocrats doesn't solve the problem for long. The whole system is flawed. A system where the majority of the people have insufficient health care while others have to ask their financial advisor just how many houses, cars, yachts, etc. they own, because they've lost track.
Exactly, why don't they understand, if you don't pay the little guy the economy cannot and will not pick up. This was easy to see, no pay, high gas prices, I knew the stimulus would not help since this was an ongoing problem. I am not an expert but even I could
see where this was heading. Surely, I am not the only one, this bailout will have no
effect, just like the $ 680 billion did just a few days ago, so why would we think another
one would deliver magic?
This is the situation. Banks made loans they should not have made and people were mislead into thinking that they weren't assuming risk when they took out these loans. We can point the fingers all we want. Yes they made their beds, but their beds are in our house, and the bed is on fire. If we do not put the fire out the entire house could burn down.
This literally is a death spiral
Bernie, this is the clearest, most understandable article I have read about this debacle, and it's the only one that makes it really easy to understand just how much loot these folks have made. Your suggestion is one that the American people would actually get behind if they heard about it (although some might insist that you were punishing their favorite celebrities).
What I don't understand is, why do I have to go to the Huffington Post to read this? Why can't I find your op-ed piece in the Washington Post? It's just another indication of the way political discourse is outrageously skewed away from common sense.
Just like with Nafta, our Senate has sold out the American people once again with the Senate passage of this pork laden bailout.
Sen Sanders is one of the very few courageous people in congress that is actually looking out for and representing the interests of the people, which is his job as an elected official. The rest of this crooked bunch only look after the special interests ignoring the will of the people and should be resoundingly turned out of office in the upcoming election
Sanders is absolutely right that those who profitted from this mess should now bear the responsibility to pay for it.
If you want to help mainstreet the 700 billion would be way more wisely spent on improving infrastructure, investing in R&D and new technologies, and giving our struggling manufacturing base a big boost as well as help for the struggling middle class homeowner, This would create bottom stimulous that would be sustainable and long lasting. Bailing out wall street is simply giiving an aspirin to a hangover and delaying the inevitable meltdown making it much worse in the long run
And how come no one is talking about the 800 lb gorilla in the room - spending 10 billion a month in Iraq? if this money stayed home there is no doubt we would not be in such a terrible shape economically
It's the global economy (I'm supposed to say stupid here but I won't!) We kill people in lands we don't understand, die in those same lands, which helps our rich volk get even richer. We ARE the tools.
Please don't feel I was dissing you on your statement. I agree with your first para almost entirely.
This bill and other recently signed bills already address the R&D and new technologies issue as well as help our manufacturing base. There was a $25 billion dollar loan just passed for the auto companies and tax credits for alternative energy were also included in the current bill. The infrastructure issue is being dealt with by money being loaned to the states. I'm sure California will get their $7 billion loan soon. Most of the infrastructure talk is just propaganda, however, as there has been an enormous amount spent on that area by private, local, and state sources in the past four to five years that any additional federal government money being made available for that sector would be small relative to the amount spent already. About "those who profited from this mess should pay for it" is the problem we're trying to solve now as the investment banks don't have it. So now the federal government needs to support the mess caused by the investment banks and AIG and Fannie and Freddie and others because too much collateral damage is being caused by their forced deleveraging.
If you HAVE to vote to pass this to keep things from collapse, then you HAVE to put everything in place immediately, that is needed to find those responsible for creating this mess and PROSECUTING them to the fullest extent of the law, whatever that is anymore? Martha Stewart was sent to jail form one little mistake. These creatures who created this mess had BETTER FOLLOW SUIT.
darn you are mean to the POOR OLD WHITE MEN...Heck I would throw anyone including Buffett in jail who subverted taxes, that is collected SALES TAXES and KEPT THEM and did not remit them to the legal entity....I don't care if the entity agreed to this, it is not reasonable because it actually causes the taxes to increase to offset those.... And the same way for the Income Taxes kept as a part of the UTILITY RATES.. and don't give me any of this crap that 'I didn't know about it'. Either the buck starts at the top or there should be no bonuses....
I am sick about this bailout, we let Kenny Lay suck the life blood out of California to the tune of 60 billlion and NOBODY DID ANYTHING ABOUT THAT!!! and there was no offset or repayment of that...
ANY MONEY GOING OFFSHORE over $1000 should be taxed, the money can be remitted back at the end of the year with the proper tax forms...
Prosecute who? The folks who bought houses at the peak of the cycle, or at least those that bought at prices they could ill afford? Or do you punish the mortgage lenders who gave them the loans because they figured prices wouldn't go down and the borrower could simply refinance when their ARM expired? Or do you punish the ratings agencies because they rated these bonds AAA because defaults were at records lows, apparently not taking into account that defaults would rise dramatically when the cycle turned? Or do you punish the executives of companies that leveraged their balance sheets with mountains of this stuff, including even Fannie and Freddie????
"This is how Washington works," said Keith Ashdown of Taxpayers for Common Sense, a Washington research group.
"A big pot of pork is their recipe for final passage."
The special provisions include tax breaks for:
* Manufacturers of kids' wooden arrows - $6 million.
* Puerto Rican and Virgin Is- lands rum producers - $192 million.
* Wool research.
* Auto-racing tracks - $128 million.
* Corporations operating in American Samoa - $33 million.
* Small- to medium-budget film and television productions - $10 million
And all these earmarks are adding $150 billion to the original $700 billion -- nod, nod, wink wink.
Wanna bet this bill will be close to $2 trillion by the time this deal goes down?
Barack Obama just lost my vote!!!!!!!!
And mine.
Hey! Hey! Good on you! See for yourself folks, two votes for John McCain who voted the same!
and...now you are voting for maccain/palin?????
"the oversight board members have all been hand picked by the Bush administration"
RICO ACT
"Those found guilty of racketeering can be fined up to $25,000 and/or sentenced to 20 years in prison per racketeering count. In addition, the racketeer must forfeit all ill-gotten gains and interest in any business gained through a pattern of "racketeering activity.""
Read part of this Time article:
After voting against the Bush Administration's controversial $700 billion bailout package, Representative Elton Gallegly, 64, a California Republican, got on a plane to fly home to Los Angeles for Congress's three-day break in observance of the Jewish holidays. By the time he got off the plane late Monday, he'd lost $50,000 in retirement savings. "And I'm getting to the point in my life where I can't start over," Gallegly laments.
Though he says he doesn't regret his "No" vote, Gallegly is adamant that the House must pass a bill to stabilize the nation's fragile financial markets. Whereas phone calls to his office were once running 40 to 1 against the bill, now they're "a mixed bag. There are a lot of folks who, for good reason, are very concerned about their 401(k)s and their retirement savings, and it's a very serious and legitimate concern," he says.
It's amazing what a 778-point drop in the Dow Jones Industrial Average, wiping out $1.2 trillion in equity, can do to change public opinion
The fear was there allright, but the fear of the Senators for their own financial state, not ours.
Public opinion did not change. That is a lie. Oh BTW, after the vote, stock futures dropped.
the drop was just fear mongering by the brokers... nothing more... a it had the desired effect.
Dear Senator Sanders:
A heartfelt thanks for your vote today on behalf of the majority of the American people, the one's who dont support this investment firm bail out--we average working stiffs. I also appreciated your Website updates & online petition where you collected 45,000 signatures against the Bush/Paulson measure. I'm one who would benefit from the implementation of your programs--I'm 50 and have never had health insurance, neither I nor my parents ever owned a home--always had to live in rented apartments, I have never qualified for a car loan, so never had a new car, I am well educated but have never earned more than $17,500 a year.(There are a handful of blacks who have become millionaires through sports or entertainment usually, but most of us simply havent amassed as much wealth as whites (due to many factors, discrimination in work being a big one) since we fought for and won our freedom 143 years ago. Since Obama grew up under very modest circumstances I assumed he would be able to relate to the poor. So many on this site fight tooth and nail against your policies. I am one who would have nothing to lose and everything to gain by them--the redistribution of wealth from the Uber Riche to the rest of us 98%. In closing I can say I am disheartened by the result of the vote today, but always encouraged by you and your efforts.
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