Thursday, October 02, 2008

So What Happened In The Senate Yesterday?


Your host with one of last night's very few heroes

Yesterday morning when I woke up and put on the TV I saw Chuck Schumer talking about why the bailout recovery bill needed to pass and how they would sweeten it up to get some House Republicans to jump on board, I knew progressives and regular American working families were going to be screwed again for the benefit of the crooked dealers who finance the careers of people like Chuck Schumer and Mitch McConnell and provide them with their levers to power.

Four senators I trust to always put working families first-- Russ Feingold, Bernie Sanders, Jon Tester and Ron Wyden-- voted no. Feingold said the bill was "well intentioned" and an improvement over the bill Paulson tried using Shock and Awe to ramrod through but that it is still "deeply flawed."
 It fails to offset the cost of the plan, leaving taxpayers to bear the burden of serious lapses of judgment by private financial institutions, their regulators, and the enablers in Washington who paved the way for this catastrophe by removing the safeguards that had protected consumers and the economy since the great depression. The bailout legislation also fails to reform the flawed regulatory structure that permitted this crisis to arise in the first place. And it doesn't do enough to address the root cause of the credit market collapse, namely the housing crisis. Taxpayers deserve a plan that puts their concerns ahead of those who got us into this mess.

Blue America Senate candidate in Oregon, Jeff Merkley, also explained why he would have voted no, as well. (He's running against Bush rubber stamp and huge recipient of Wall Street bribes, Gordon Smith, who, of course, voted yes.) Jeff commended Oregon's other senator, Ron Wyden for voting in the interest of regular working families. Jeff:
"I have dedicated much of my life to advocating for consumers and I believe it is just wrong to spend $700 billion of taxpayer money to bailout the very Wall Street financiers who created this crisis. This bill will allow those same executives to walk away with golden parachutes, while doing nothing to end the abuses of oversight that caused this mess or help working families who need their own economic rescue. This proposal is badly flawed and adding a number of important unrelated items, no matter how worthy, does not fix the problems with this bailout. 
"While we must act quickly to avoid further instability in the market, we must also act prudently to ensure that the medicine doesn't make the patient sicker. Last week I laid out clear principles to address this crisis. To protect taxpayers we should require that the government only purchase distressed assets from American companies and not foreign banks. Second, CEOs on Wall Street who created this crisis should not be walking away with millions in their pockets. I want a deal that provides sufficient oversight and accountability of our markets. And we cannot ignore the suffering on Main Street, sidelining our homeowners and allowing deceptive practices to lead more families into bankruptcy.
"Like Congressman DeFazio and Senator Wyden, I am committed to the Secure Rural Schools Act and will fight each and every day for Oregon's rural communities. Now my opponent will attack me and say I am opposed to county payments and various tax cuts, but absolutely nothing could be further from the truth.
"This is what they do in Washington. They take a bad proposal and add $150 billion of sweeteners to satisfy enough people. This is not how to solve problems.
"The crisis on Wall Street and the need for a bailout is an indictment of the failed economic policies of Gordon Smith and George Bush. Their philosophy resulted in unimaginable abuses and excesses on Wall Street and now Washington is making taxpayers clean up the mess. Congress and the Administration should go back to the drawing board and come back with a proposal that prevents more economic pain for families and small businesses and meets some minimum standards to protect taxpayers and guarantee accountability on Wall Street."
Rick Noriega, the Blue America-endorsed Senate candidate in Texas is running against John Cornyn, one of the biggest beneficiaries of legalized bribes from the bad guys in the bailout saga. Last night Rick explained to Texans who, unlike Cornyn, he would have oppose the bill:
"Tonight, the US Senate voted on the new plan to bail out the financial system. I have grave concerns about this bailout at the expense of Texas families.

While we urgently need a rescue bill, and I believe that Congress should work quickly to pass legislation to aid our ailing economy, this is a leadership challenge for reform. This bailout should not just be a rescue; it should also be a reform of the system. This attempt still places too much emphasis on rescue, and not enough on reform.

It's hard not to think that this bailout is an undeserved reward to the people who got us into this economic crisis. Taxpayers are being asked to clean up the Administration and Wall Street's mess, and both have asked the taxpayers for a blank check. I do not believe we should give them one.

Now is the time to address how we have gone off the rails-- time to insist on changes to the lack of oversight that led to this crisis. My fear is that this bailout doesn't do that. The lack of prudence and unfettered wheeling and dealing that allowed abusive and reckless loans, shoddy investments, poorly understood financial instruments, and market excess would still be in place after this bill passed. It's like spending $700 billion to clean up a flood in your house without fixing the leak in the roof.

For a bailout of this magnitude to be successful, it needs real accountability. There are virtually no limits on what the Treasury can do with this money and there are insufficient checks on the Secretary of the Treasury. At this point, I am not confident that the Bush administration can manage anything competently, much less a $700 billion blank check.

Several days ago, I outlined what I would support in a potential bailout:

· Real assistance for homeowners

· Real regulation

· Limits on out of control executive pay

· Accountability

This bailout does not contain enough help for ordinary Americans, and this bill is supposed to be about economic rescue, not corporate welfare. Even worse, foreign companies would also be beneficiaries of taxpayer largesse. As such, I can not support it.

The Senate has amended previous versions of the bailout to include a variety of tax breaks that I can support. Instead of fixing the bailout so that it is truly responsive to our economic needs, it has been littered with extras to buy votes.

Texans should not support a bailout that has insufficient protections for the taxpayers, doesn't go far enough in reining in out of control executive salaries, has little relief for people in real distress, and doesn't heal the systemic rot that led to this crisis in the first place."

Last Sunday, when this whole Paulson bailout/giveaway scheme was still in the Shock & Awe stage, we presented Bernie Sanders' alternative plan, one more concerned with ordinary Americans than with the Masters of the Universe. Today Bernie was one a small handful of senators who voted no for the right reasons.
"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,, 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."

Now that's a senator worth the salary we pay them! This year alone the Finance, Insurance and Real Estate sector gave "donations" (bribes) of $339,649,585 to federal elected officials, 50/50 between the two corrupt Inside the Beltway political parties-- and over $2 billion since 1990. Removing presidential candidates, the five biggest recipients of this largesse in the Senate (this year alone):

Norm Coleman (R-MN)- $2,054,683
Mitch McConnell (R-KY)- $1,814,704
John Cornyn (R-TX)- $1,690,392
Max Baucus (D-MT)- $1,462,115
John Sununu (R-NH)- $1,340,760

Needless to say, they all voted for their corporate masters' interests, as did these sleazy crooks, each of whom is up for re-election in November and each of whom has taken over three quarters of a million dollars this year: Susan Collins (R-ME- $1,038,484), Mary Landrieu (D-LA- $942,397), Gordon Smith (R-OR- $937,931), Lamar Alexander (R-TN- $812,372), Saxby Chambliss (R-GA- $791,271), and Mark Pryor (D-AK- $766,856). We'd be better off if Michael Moore was a senator instead of all these combined.
The richest 400 Americans-- that's right, just four hundred people-- own MORE than the bottom 150 million Americans combined. 400 rich Americans have got more stashed away than half the entire country! Their combined net worth is $1.6 trillion. During the eight years of the Bush Administration, their wealth has increased by nearly $700 billion-- the same amount that they are now demanding we give to them for the "bailout." Why don't they just spend the money they made under Bush to bail themselves out? They'd still have nearly a trillion dollars left over to spread amongst themselves!

Read Moore's whole plan.

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