An Open Letter To Rep. Frank Wolf Concerning The Wall Street Bailout

Frank Wolf
241 Cannon Building
Washington, DC 20515

Subj: Emergency Economic Stabilization Act

Mr. Wolf,

As you already know, Senators Warner and Webb have voted “Yes” to bailing out the Wall Street Banks and Institutions that got themselves into a serious mess by engaging in extremely poor business practices. This bailout amounts to the Federal Government using my hard earned money to give a huge payday to a group of Wall Street executives while completely failing to hold accountable any of the people who caused this whole situation to begin with.

Further, this bill is being shoved down our collective throats since there have been no hearings, no debates and no investigations into the exact cause of the problem.

I recommend that at least four people be brought before Congress and put under oath to explain their exact roles in this matter. These four are Rep. Barney Frank (D-MA), Sen. Chris Dodd (D-CT), Franklin Raines, who made $90 million in personal income off of Fannie and Jim Johnson who made over $20 million. I, for one, would like to know how these last two made money while everyone else lost money.

Beyond all of this is the pork that has been tacked onto this bailout. Main Street is going to bail out Wall Street for some Puerto Rican Rum and maybe some NASCAR tracks? How about that “Wool Research?” God knows we can never have too much of that now, can we? And what about those “Wooden Arrows designed for use by children?” Maybe we can line the Wall Street CEOs up against the wall and shoot them with the arrows!

This $700 billion legislation just went up to $850 billion, and now the House is talking about tacking even more pork onto this!

It doesn’t matter whether this bill is 3 pages or 3000 pages. It is still a socialist bailout that will saddle me and my children with bills that will take decades to pay off, if we can even pay them off at all.

Perhaps you should take the time to read through the entire bill before voting to require the American Taxpayer to handle more debt than we can afford.

Also, you should know that the contributions made to you in gratitude for your “Yes” vote on the original bill have not gone unnoticed. To wit:

Securities brokers & investment companies: $28,150
Finance, Insurance & Real Estate: $27,250
Commercial banks & bank holding companies: $21,700
Credit Unions: $13,250
Investment banking: $11,800
Credit agencies & finance companies: $11,250
Private Equity & Investment Firms: $7,800
Venture capital: $7,500
Banks & lending institutions: $6,000
Stock exchanges: $1,950
Savings banks & Savings and loans: $400
Commodity brokers/dealers: $250

The total you received from entities who support this bailout is $137,300. That is how much you have effectively been paid to hand me and my children this huge debt of at least $850 billion plus whatever other pork you and your peers decide to put into this thing. The latest estimate I saw was a final bill of $905 billion.

There is a reason these banks and lending institutions are failing. It is because the market is dictating that the fail. Once they do, businesses that engage in wiser practices will step up and take their place.

Please do the right thing and vote “No” on this bailout bill, or if you cannot do that, please explain to me why I have to provide a huge payday to Wall Street while those who got us into this mess get to walk away with no accountability and at the same time, are shoving my money into their pockets.

Thank you.

'Crony' Capitalism Is Root Cause Of Fannie And Freddie Troubles: Democrats At The Center Of It All

Terry Jones at the Investor's Business Daily has a nice, clean, concise and accurate description of what happneed at Freddie Mac and Fannie Mae and why we taxpayers are being cajoled into paying for it.

The truth is that depspite the shrill calls from Barack Obama, Christopher Dodd and Barney Frank that it is "all the Republicans fault," it has been the Democrats at the center of the maelstrom. It was the Democrats who, at least twelve times, derailed Republican efforts at reforming Freddie and Fannie and as we showed in a previous blog post, Barney Frank was one of those opposed that reform very ferociously.

So, why did the Dems opposed the reform of Freddie and Fannie? Money. That's it. That's the whole reason.

Here is the history in a nutshell:

It all started, innocently enough, in 1994 with President Clinton's rewrite of the Carter-era Community Reinvestment Act. Ostensibly intended to help deserving minority families afford homes — a noble idea — it instead led to a reckless surge in mortgage lending that has pushed our financial system to the brink of chaos. ... Fannie and Freddie, the main vehicle for Clinton's multicultural housing policy, drove the explosion of the subprime housing market by buying up literally hundreds of billions of dollars in substandard loans — funding loans that ordinarily wouldn't have been made based on such time-honored notions as putting money down, having sufficient income, and maintaining a payment record indicating creditworthiness. With all the old rules out the window, Fannie and Freddie gobbled up the market. Using extraordinary leverage, they eventually controlled 90% of the secondary market mortgages. Their total portfolio of loans topped $5.4 trillion — half of all U.S. mortgage lending. They borrowed $1.5 trillion from U.S. capital markets with — wink, wink — an "implicit" government guarantee of the debts. This created the problem we are having today. As we noted a week ago, subprime lending surged from around $35 billion in 1994 to nearly $1 trillion last year — for total growth of 2,757% as of last year. No real market grows that fast for that long without being fixed.

And the part about money for the Dems? Read on:

Fannie and Freddie became huge contributors to Congress, spending millions to influence votes. As we've noted here before, the bulk of the money went to Democrats. ... Meanwhile, Fannie and Freddie also became a kind of jobs program for out-of-work Democrats. Franklin Raines and Jim Johnson, the CEOs under whom the worst excesses took place in the late 1990s to mid-2000s, were both high-placed Democratic operatives and advisers to presidential candidate Barack Obama. Clinton administration official Jamie Gorelick also got taken care of by the Fannie-Freddie circle. So did top Clinton aide Rahm Emanuel, among others.

And yet, despite the fact that the Dems are in the middle of this whole fiasco, Obama, Dodd and Frank are insistent that it is a Republican problem. Unfortunately, their surrogates in the media are spreading this misleading (or outright false) message.

But, do you remember all those campaign ads by Barack Obama about how their were lobbyists on John McCain's staff? Well, Obama should change his campaign slogan of "Change we can believe in" to "Hypocrisy for our own cause." Here is how Obama deals with those lobbyists:

Over the span of his career, Obama ranks No. 2 in campaign donations from Fannie and Freddie, taking over $125,000. Dodd, head of the Senate Banking panel, is tops at $165,000. Clinton, ranked 12th, has collected $75,000. ... It emerged that Clinton aide Raines, who took Fannie Mae's helm as CEO in 1999, took in nearly $100 million by the time he left in 2005. Others, including former Clinton Justice Department official Gorelick, took $75 million from the Fannie-Freddie piggy bank.

Today, Raines is a top advisor for the Obama campaign.

So, the next time somone accuses the Republicans of this Freddie and Fannie mess, ask the accuser what happened to all the money that the Dems made off of Freddie and Fannie and ask when was the last time the Dems tried to reform them.

You can access the complete article on-line here:

'Crony' Capitalism Is Root Cause Of Fannie And Freddie Troubles
Terry Jones
Investor's Business Daily
September 22, 2008