Ten Reasons to Oppose the Wall Street Bailout
1. NO REFORM: The plan
attempts to mask, rather than reform, imbalances in credit markets and in U.S.
economic public policy. The plan props up reckless and failed banks by buying
“troubled assets” instead of focusing on real reforms that go after government
sponsored culprits Fannie Mae and Freddie Mac, and sustainable policies that
will increase the availability of private capital and expanded economic
2. TREASURY POWER GRAB: The plan raises Constitutional
concerns by dramatically expanding the power of the current and future Treasury
Secretaries, giving the government agency power to directly purchase assets from
for-profit financial and non-financial firms.
3. STUNNING PRICE TAG: The $700
billion bailout figure is as much money as the combined annual budgets of the
Departments of Defense, Education and Health and Human Services. It amounts to
$2,300 for every man, woman, and child in America.
NATIONAL DEBT: Instead of cutting spending elsewhere, Congress will borrow all
$700 billion on global capital markets, and the bill raises the national debt
ceiling to a staggering $11.3 trillion.
5. GLOBAL BAILOUT: The plan includes
taxpayer purchases of distressed assets from foreign banks.
RESPONSIBLE AMERICAN BANKS: The plan punishes responsible U.S. banks by keeping
reckless, insolvent investment banks in business. As BB&T CEO John Allison
wrote in a letter to Congress on Sept. 23rd, “….this is primarily a bailout of
poorly run financial institutions…. Corrections are not all bad. The market
correction process eliminates irrational competitors.”
7. FLAWED PROCESS:
Members of Congress and the public will have less than 24 hours and no hearings
to discuss and understand the impact of this sweeping plan. This rush to pass a
wildly unpopular plan without benefit of significant public debate and input
will also undermine its legitimacy and effectiveness.
8. BY WALL STREET, FOR
WALL STREET: Treasury Secretary Paulson, the architect of the plan, was formerly
the head of Goldman Sachs, one of the firms responsible for the mess and a
direct beneficiary of the bailout. Further, the advisers managing the
bailout auctions and assets will be Wall Street firms and will likely receive
billions of tax dollars in fees.
9. OTHER OPTIONS NOT EXHAUSTED: The idea
that taxpayers will make money on the bailout is not credible. There are ready
buyers for these “troubled assets” — Merrill Lynch sold its entire portfolio of
mortgage backed securities in July– provided the price is low enough. If a
profit was possible, private speculators would readily buy these troubled
10. MORALLY OFFENSIVE: The plan violates basic principles of American
capitalism and honest governance by creating a system of “private profits,
socialized losses” that transfers money from taxpayers directly to Wall Street
investment banks. Free market capitalism only functions if individuals and firms
are held accountable and are allowed to both succeed and profit, and also to
sustain losses and even fail.
This is from http://nowallstreetbailout.com/why2.php