Halloween on Wall Street started much too early this year, and it was all trick and no treat. It has been really scary. Scary, like when we review reports on retirement accounts and other mutual fund holdings, and scary to even turn on the news to hear the newest, breathless threat to our economy here and globally. We have, as you know, been in much, much better shape than many other parts of the country.
As we wrestled with the bailout bill, I heard the genuine concerns of so many of our neighbors, especially those who had just retired or thought they were about to retire. People have been asking: “Will I have to delay my retirement?” or “Now that I am retired, will I be able to stay retired?” I haven’t received this much mail and phone calls, well over 5,000 during a period of less than two weeks, since President Bush invaded Iraq. While these communications were overwhelmingly against the bailout as proposed, some accepted the notion that voting for the proposal was the only alternative to doing nothing.
Unlike Wall Street CEOs, most folks in their golden years don’t have golden parachutes. I voted against the bailout, and here is why. In short, I stood up against the leadership to oppose a Wall Street bailout that did not provide adequate protection for taxpayers. I demanded that those who caused the crisis should bear at least some of the cleanup costs. This was not really a question of action or inaction. Of course, we needed to act, but we need to act responsibly to really get our economy moving again. Whether negotiating for a new car or a new house, you have to be able to say “no” to a bad deal – the rule is no less true when almost a trillion dollars in taxpayer dollars is at stake.
Protecting Taxpayer Dollars
When asked for so much in taxpayers’ dollars almost overnight, I bear a responsibility to secure a reasonable value for that expenditure. The entire bailout is to be financed initially with borrowed money, but we should not merely replace private overborrowing with public overborrowing. Furthermore, this plan does not represent the most effective way to recapitalize our financial system. The continued crisis bears this out. In addition, the bill authorizes bailing out not only American institutions, but the entire world -- as our banks can purchase foreign held mortgage securities and resell them to the government.
In a House floor speech, I commended Warren Buffet on his confidence in American business, but I noted that his combined investment of $8 billion in General Electric and Goldman Sachs was not a charitable donation. He was not purchasing toxic securities that nobody wants; he bought buying preferred stock. I asked: “Why should American taxpayers get anything less? Why should he buy the preferred, while we get the leftovers?” Now, the UK is bailing out its banks, and, like Buffet but unlike the deal Treasury Secretary Paulson wanted, the UK is getting preferred stock.
Keeping Social Security Secure
The stock market turmoil renews my conviction that privatizing Social Security would be a great mistake. This rollercoaster ride is shocking enough. We can all be grateful that the same Wall Street speculators who wrecked our financial system did not get a chance to gamble with the Social Security Trust Fund. I will continue to oppose risky privatization efforts. Social Security has not missed a dime in payments in seven decades; we must keep it that secure.
Maintaining an Eagle Eye On Taxpayer Funds
Certainly, people of goodwill had sincere differences of opinion on the wisdom of this particular financial rescue package. I certainly do not claim a monopoly on truth. The crisis is by no means over, and our responsibility going forward is to keep and eagle eye on the funds taxpayers are being asked to contribute. If taxpayers are going to be forced to clean up the broken furniture at a party they were not invited to, then at least we should ensure that their investments are protected. The challenges are not easy. But difficult times bring out what's best about America. We have endured through greater challenges. We are in this together; we will find solutions together.
Contact Me
Readers who wish to write me about the economic crisis or other federal issues can send a message by mail to 300 E. 8th Street, Suite 763, Austin, TX 78701, by e-mail to lloyd.doggett@mail.house.gov, or through my website at www.house.gov/doggett.
U.S. Congressman Lloyd Doggett is currently serving his seventh term in the House of Representatives. He was recently one of only two members of Congress to be honored with the AARP Legislative Achievement Award for his work to preserve and improve Medicare. Rep. Doggett is a senior member of the Ways and Means, Budget, and Joint Economic Committees. He and his wife Libby have two daughters—one a physician and one a teacher, and two granddaughters.