Bailout Management

Sent to Congresswoman Melissa Bean and Senator Dick Durbin, November 13, 2008

First I would like to congratulate you on your re-election. With the re-election of you and Dick Durbin, as well as the election of President-Elect Obama, election night was a thrilling evening.

During this campaign season I made the promise to myself to become more involved in our democracy. One of the greatest privileges Americans enjoy is the ability to contact our elected officials with our opinions, concerns and praise. Therefore, you will be hearing from me on a regular basis.

This being said, I am quite concerned about the execution path of the bailout bill. I believe I share the views of many Americans. In my opinion, the need to pass the bailout bill was a highly undesirable position, but necessary given the circumstances.

From my understanding, the bill called for active congressional oversight. This oversight does not appear to be happening. The situation is starting to carry the "stench" of much of the rest of the Bush years--do what we want and there is no need to keep the American people informed of our decision-making process, no need to tell anyone what we are actually doing.

This is entirely unacceptable and I ask that you do what you can to speak out in opposition to the situation.

Granted, the financial dilemma America faces is highly complex. Despite being a relatively sharp person, I can't even pretend to understand all of the complexities. It is probably safe to say that very few really have the background and the knowledge to have solid insight on the situation.

I can say with reasonable deal of certainty that I do not support bailout funds being used to fund acquisition activity, to fund employee (especially top executive) bonuses, nor to prop up shareholder dividends. This being said, if non-partisan experts believe in good judgment that it is appropriate to use bailout funds for the above mentioned purposes, I would want objective information as to why supporting these activities will help our overall economic situation.

The Bush administration has continually supported measures that allow money to swirl at a frenetic pace at the very top levels of our economy. The last eight years have almost been like the richest 3% of our population has been standing in a giant money booth (like you sometimes see at the fair)--money swirling around and this top 3% stuffing money in their pockets as fast as possible. However, the "money booth" of the last eight years contained monetary denominations much larger that one dollar bills.

$700 billion is a great deal of money and it cannot continue to be spent with Congress and the American people sitting in the dark. The stakes are just too high.

On another note, I have very mixed feelings about the prospects of bailing out the American auto industry. In recent times, the big three have been three of the most poorly managed companies in our economy. Should this poor management be rewarded without very core changes in operation? We will be in the same situation a year or two from now. On the other hand, can we afford to lose the hundreds of thousands of jobs attached directly and indirectly to the US auto industry right now? I don't know.

This also needs to be a public dialog backed by objective, smart, non-partisan information.

I would like to leave you with two final thoughts. One of the positive results of the mess that our country has inflicted on ourselves is that I am one of millions giving active thought as to how we can correct our current challenges. The following two thoughts are simple and maybe are obvious, but maybe there is some truth shrouded in simplistic notions.

1. We cannot allow corporate America to continue to privatize profit and socialize risk. The Wall Street that lobbies actively for deregulation and laissez-faire practices when times are good is the same Wall Street that is streaming to Capitol Hill with hats in hand. We cannot have it both ways and expect that our country will prosper.

2. If we have corporations that are truly “too big to fail,” perhaps corporations should not be allow to get that big. Or, at least not allowed to become “too big” without adequate capital and liquidity to navigate through economic downturns. I have no idea how this idea could be structured in a way that supports fair free-markets (emphasis on fair), yet protects the American economy from a handful of companies bringing our entire economy to its knees. Although, I have no idea how this idea could be structured, I do believe that there is merit to the thought.

Continued success as you head into your new term. We have many, many challenges before us. But, I feel confident that we can overcome them if politics is pushed aside and we all work to do what is best for the long-term health of our nation as well as to address the short-term crisis.

Sincerely,

Tonia Becker VerShaw