I received a reply to my letter to Senator Tom Coburn regarding the bail out.
I have addressed just a few of the assinine statements the Senator thought we should all believe
Our country finds itself in the midst of difficult economic circumstances due to tremendous strain on worldwide financial markets. I believe the challenges created by this situation are so great that failure to address them could spill over into the broader economy and negatively affect every American.
In case you have not noticed, Mr. Senator, they have spilled over into the broader economy and they are affecting every American.
In recent months, the Treasury Department and the Federal Reserve have attempted to address the situation through arrangements with Bear Stearns, insurer AIG, and Fannie Mae and Freddie Mac. While many Oklahomans are rightly uncomfortable with bailing out large banks and corporations at the expense of taxpayers, the purpose of the legislation was to protect ordinary Americans and not Wall Street executives. The economic stabilization bill addresses a different problem in a different way, and is just a set of tools that can prevent a worsening crisis for Oklahoma citizens.
Now, Senator, this is the biggest load of bullshit I have ever heard. The sole purpose was to bail out Wall Street and its executives. AIG had a party with taxpayer money. You are not protecting ordinary Americans by having us foot this bill and any others that you can push through Congress with threats and scare tactics.
The financial institutions holding those troubled mortgages have, in turn, found themselves unable to collect on those mortgages or resell them to other investors.
What you really mean here is that they stole all the money there was to steal and there is no one left to screw.
What is missing from this account is the role Congress played in creating these economic troubles in the first place. For years, Congress pursued "affordable housing" policies with the goal of providing loans (subprime loans) to borrowers that could not pay them back. Fannie Mae and Freddie Mac - companies charted by Congress - encouraged banks to make subprime loans by purchasing the loans from banks and turning them into investments. Investors believed that the mortgage-backed investments were a safe investment because of the implied backing of the federal government and purchased them in great amounts.
As much as members of Congress want to find scapegoats, the root of this problem is political greed. Members of Congress from both parties wanted short-term political credit for promoting home ownership even though they were putting our entire economy at risk by encouraging people to buy homes they couldn't afford. Then, instead of conducting thorough oversight and correcting obvious problems with unstable entities like Fannie Mae and Freddie Mac, members of Congress chose to ignore the problem and distract themselves with unprecedented amounts of pork-barrel spending.
How dare you try to lay this blame all on the borrowers.
In June 2002, President Bush issued America's Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that existed between the homeownership rates of minorities and non-minorities. The President also announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade. Under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at an all time high of 69.2 percent. Minority homeownership set a new record of 51 percent in the second quarter, up 0.2 percentage point from the first quarter and up 2.1 percentage points from a year ago. Then in 2004 Alan Greenspan asserted that homeowners could save a ton of money if they took out an adjustable rate mortgage instead of a fixed rate mortgage when interest rates were at their lowest with only one way to go and that was up.
If the American people are angry about the financial situation of this great country, there is only one place they need to direct their anger - the United States Congress. The economic recovery bill does not represent a new and sudden departure from free market principles as much as it represents an emergency response to congressional actions that have ignored free market principles, and our Constitution, for decades. If anyone in Washington should offer their resignation it should be the members of Congress who peddled the fantasy of free home ownership without risk. No institution in our country is more responsible for the myth of borrowing without consequences than the United States Congress.
In 2006, along with nineteen other Senators, I called for major regulatory reform with regard to Fannie Mae and Freddie Mac. We warned of the dangers of these laxly regulated entities, and the enormous risk they could pose to the housing market, the financial system, and the economy as a whole. Yet Congress failed to take any action and the problem grew worse until we have found ourselves faced with an imminent financial catastrophe.
Oh, I do lay all the blame on Congress, but not for the reasons you give. The reason Congress is responsible is the repeal of the Glass-Steagall Act. In 1987, some of the reasons for NOT repealing this bill were:
Conflicts of interest characterize the granting of credit – lending – and the use of credit – investing – by the same entity, which led to abuses that originally produced the Act.
Depository institutions possess enormous financial power, by virtue of their control of other people’s money; its extent must be limited to ensure soundness and competition in the market for funds, whether loans or investments.
Depository institutions are supposed to be managed to limit risk. Their managers thus may not be conditioned to operate prudently in more speculative securities businesses.
I will do everything in my power to ensure that this bill does not lead us down a slippery slope to European style socialism and slow economic growth. I will also promise taxpayers that I will do everything in my power to block what I expect will be hundreds of attempts by politicians in Washington to continue business-as-usual borrowing and spending in the next Congress.
Do you mean socialism for banks and big business? Or do you mean socialism that benefits your constituents? You vote with George Bush 80% of the time and are a firm believer in the trickle down, piss on my head and tell me it’s raining economics. I know Senator Coburn, from your record, that you are all about socialism...just as long as it is socialism for big business