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By Bob Hamilton
It’s
not surprising that the American people are against the $700 billion financial
rescue plan, which was rejected by Congress on Monday. We’ve
seen this movie before, where the government steps in with taxpayer funds to
rescue those who overdosed on greed, and we’re not interested in seeing
it again. After our government lied and mismanaged its way into a
quagmire in Iraq that has increased the burden for taxpayers by trillions,
why should we trust them now? They say we must fork over another $700
billion to stabilize the financial system, the same financial system that allowed
banks and mortgage companies to knowingly issue bad mortgages and convert them
to risky investments that were sold to investors as safe. At the same
time, too many of our political leaders in Washington seem more concerned about
the next election than solving the financial crisis, which leaves us disinclined
to trust them either.
After spending my career in banking and financial services, I understand the
importance of maintaining the flow of funds through the financial system. Because
it is impossible to know how much bad debt each financial institution is holding,
the need to cover potential losses and mutual lack of confidence is freezing
up the credit market. With the flow of funds halted, many businesses
won’t be able to buy inventory; homebuyers who spot a good deal won’t
be able to buy a house; students won’t be able to get a loan to go to
college; farmers won’t be able to buy seed for next season’s crops.
First came the implosion of the housing market, which has been painful enough,
followed by the implosion of banks. Yesterday we saw a huge drop in the stock
market, which translates into financial losses for millions of Americans, many
already retired and expecting to live off of their 401K’s. Feeling less
wealthy, consumers will stop spending.
Next, you’ll see businesses cutting back their operations because they
can’t get enough credit to operate normally or because the consumer is
no longer buying their products. Unemployment will grow uncomfortably high
and many businesses will fail as the economy spirals downward. More
families will be unable to meet their mortgage payments and face foreclosure.
We end up with exactly what we don’t want – a lot of people who
are capable of working, who want to work, but can’t find a job. Tax revenue
and the value of the dollar will shrink; the deficit and interest rates will
increase. This is not a pretty picture.
While the climate of trust and confidence in our leaders in Washington
is at a low point, we must nevertheless remain committed to working out a
plan to get our financial system moving again. I think it’s
good that Paulson’s original plan was rejected. Telling the American
people, “Just give me $700 billion and trust me” doesn’t
work anymore.
The American people deserve a transparent government going forward. We want
to know what’s being done with our money. We want people held
accountable for their mistakes. And we want a system with enough controls to
prevent future abuses.
Even though it’s an unpopular position right now, I support
the efforts in Congress to pass legislation to restore confidence in our
financial system. Surely our representatives can work together for
the good of our country and negotiate a plan that spares the taxpayers as
much as possible and places more of the burden on those with a larger role
in creating the problem.
Bob Hamilton is the Democratic Candidate for the 49th Congressional seat,
running against Republican Darryl Issa.www.roberthamiltonforcongress.com
The opinions expressed in this editorial reflect the views of the author and do not necessarily reflect the views of East County Magazine or its publisher. If
you wish to submit an editorial for consideration, please contact editor@eastcountymagazine.org.
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