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Dear Member of Congress:
On behalf of hundreds of thousands of FreedomWorks members nationwide I urge you to vote against the $700 billion Wall Street bailout. Grassroots activists across the political spectrum have been calling Capitol Hill day and night in overwhelming opposition to this legislation. Members of Congress should listen to them and oppose this bill. Grassroots opposition has been so vehement because it does not take someone with the Wall Street resume of Treasury Secretary Henry Paulson to see who gets fleeced in this bailout.
The American people understand that this bill would force responsible individuals to pay for the irresponsible while doing nothing to address the root of the problem that brought about this crisis. The root government distortions that caused the housing bubble and contagion of bad financial paper in investment banks and other financial institutions – particularly originating from Fannie Mae and Freddie Mac – have been wholly ignored in this bailout. Failure to address these and other systemic causes of the current crisis ensures that Congress will be back again in the future, proposing yet another taxpayer bailout.
This so-called compromise bill is not a compromise at all. It contains all the failings of the original Paulson Plan and is nothing more than the same plan with the parts moved around. While House Republicans did good work to remove unacceptable Democratic add-ons, those add-ons were not in the initial Paulson plan we opposed initially, leaving supporters of free, responsible capitalism and limited government with little reason to prefer this bill to the original Paulson proposal.
This bill guarantees long term damage to our economy and prosperity for, at best, temporary short-term stability. It does so by permanently enshrining the tie between big government and Wall Street that got us in this mess in the first place through Fannie Mae and Freddie Mac. If passed, it will mean political connections, not business acumen, will determine who leads America’s financial institutions, and that political considerations will determine the allocation of capital in the United States, rather than the demands of the market. With $700 billion of someone else’s money on the line now, and a political strong hold on the financial sector for the foreseeable future, it is naïve to think otherwise.
Fannie and Freddie brought us too many houses, too many risky loans, financial junk in the form of mortgage-backed securities, too many foreclosures, and too many banks looking for a bailout. It is the model that brought us Franklin Raines as Fannie Mae CEO, and the deep and troubling web of lobbyists, political contributions, sweetheart loans, scandals and accounting irregularities authorities are still trying to figure out.
By spreading the government sponsored disease that brought us this crisis to the rest of the financial sector, this legislation not only sows the seeds for the next financial crisis, it ensures it will be much worse. If this legislation passes, it will be seen in hindsight as a legislative failure akin to the enactment of the Smoot-Hawley Act, or Nixon’s wage and price controls.
Like those historic mistakes, this legislation will not only fail to cure the problem it purportedly attacks, it will exacerbate it by preventing necessary corrections and shifting power over economic decisions into the political realm.
I strongly encourage you to vote against his legislation.
President and CEO