Vote independent or face consequences
Last night Sen. Obama, who has gotten more money per time in office from Fannie Mae and Freddie Mac officials than anybody in Congress, rewarded his special interest contributors with a $700 billion line of credit that has no time limit and almost no outside supervision of the treasury secretary. "Maverick" John McCain also hypocritically voted for this 450 page bill, which is loaded with special interest goodies he pretends to oppose.
If we really wanted bipartisan reform that didn't reward Wall Street crooks, Democrat Congressman Peter DeFazio has a plan any honest Republican could endorse: "No BAILOUTS Act - Bringing Accounting, Increased Liquidity, Oversight and Upholding Taxpayer Security. The plan would:
1) require the Securities and Exchange Commission (SEC) to require an economic value standard to measure the capital of financial institutions. This bill will require SEC to implement a rule to suspend the application of fair value accounting standards to financial institutions, which marks assets to the market value, no matter the conditions of the market. When no meaningful market exists, as is the current market for mortgage backed securities, this standard requires institutions to value assets at fire-sale prices. This creates a capital shortfall on paper. Using the economic value standard as bank examiners have traditionally done will immediately correct the capital shortfalls experienced by many institutions.
2) Require the SEC to restrict naked short sells permanently by implementing a rule that blocks naked selling, selling a stock short without first borrowing the shares or ensuring the shares can be borrowed. Such practices many times harm the companies represented in the sales and hurt their efforts to raise capital. There is no economic value produced by naked short sales but there are significant negative effects.
3) Require the SEC to restore the uptick rule permanently by implementing a rule that blocks short sales without an uptick in the market. On Sept. 19, 2008, the SEC approved a temporary pause of short selling in financial companies "to protect the integrity and quality of the securities market and strengthen investor confidence." This rule prevents market crashes brought on by irrational short term market behavior.
4) "Net Worth Certificate Program," which would require the FDIC to implement a net worth certificate program. The FDIC would determine banks with short-term capital needs and the ability to financially recover in the foreseeable future. For those entities that qualify, the FDIC should purchase net worth certificates in these institutions. In exchange, these institutions would issue promissory notes to repay the FDIC, counting the amount "borrowed" as capital on their balance sheets. This exchange provides short term capital, with no cash outlay. Interest rates on the certificates and the FDIC notes should be identical so no subsidy is necessary. Participating banks must be subject to strict oversight by the FDIC including oversight of top executive compensation and if necessary the removal of poor management. Financial records and business plans should be subject to scrutiny while participating in the program. In 1982, Congress approved a program, known as the Net Worth Certificate Program, that allowed banks and thrifts to apply for immediate capital assistance. From 1982 to 1993, banks with total assets of $40 billion participated in the program. The majority of these banks, 75 percent, required no further assistance beyond the certificate program.
5) Increase the FDIC Insurance limit from $100,000 to $250,000, which would require the FDIC to raise its limit to provide depositors confidence that their money is safe and help eliminate runs on banks, which are destabilizing to the industry.
Unfortunately, this type of bill has little chance of passing. My suggestion is a "bipartisan" approach of voting against anyone who votes for the disgusting bailout that passed the Senate. If you are a Republican that can't stomach voting for the Democrat running against Mark Kirk or a Democrat who can't vote for the Republican running against Sen. Durbin or the "bipartisan" Obama/McCain tag team of crooks, let me suggest voting third party as I will. If we don't start putting country over party, we won't have a country worthy of the once proud name of United States of America much longer.
Grant D. Noble
Lake Forest