Dear Mr. Halsey:
Thank you for taking the time to contact me to voice your concerns with the financial crisis we're facing. I hear you loud and clear and want to assure you that I took your thoughts to heart prior to casting my vote. I appreciate having the chance to respond to your well-founded frustration.
I am deeply concerned about the financial crisis and its impact on our already troubled economy. While this crisis may seem to be only about Wall Street, in reality it touches each and every Minnesotan. Jobs, personal and retirement savings, loans for businesses, college and car loans, and mortgages are all at stake. Prior to the vote, I received a multitude of real-life stories from Minnesotans who were facing issues such as the inability to make payroll or get a student loan.
I am frustrated that the case-by-case approach up to this point in dealing with the financial crisis had failed to solve the problem. Unfortunately, we entered a new and dangerous phase in which our entire financial system hangs in the balance. Dramatic action was required to respond to economic disaster. I did not take lightly for one minute allocating $700 billion in taxpayer money. In fact, I am infuriated that we are at this point, but I did come to the ultimate conclusion that it was necessary.
In response to the crisis, which was brought on by outright greed, mismanagement and a failed financial regulatory system, the Administration proposed on September 19, 2008, a $700 billion plan to systematically stabilize the financial system and protect the economy by buying toxic mortgage-related assets that have been paralyzing the financial system. As originally proposed, I could not support the Administration's plan. In fact, on September 29, I sent a letter to Senate Banking Committee Chairman Dodd, Ranking Member Shelby, House Financial Services Chairman Frank, and Ranking Member Bachus making it known that in order to gain my support, any financial rescue plan needed to uphold the principles of Wall Street accountability, taxpayer protections, and no blank checks or golden parachute payouts to Wall Street executives.
As you may know, on October 1, 2008, I joined 73 of my colleagues in passing revised financial stabilization legislation that included my required principles. More specifically, the financial stabilization legislation doesn't give a blank check for Wall Street, provides for strong oversight and judicial review, limits executive compensation, and prohibits golden parachutes for participating institutions. Signed by President Bush on October 3, this legislation provides $700 billion, in installments, for programs to buy and insure these toxic assets. $250 billion will be given upfront; another $100 billion if the President certifies need, and the last $350 billion will be subject to Congressional disapproval.
It is important to point out that these assets have underlying value. In fact, the Congressional Budget Office has determined that the net cost to the taxpayer would be "substantially less than $700 billion." Moreover, a number of well-respected market observers have suggested that the government could actually earn a profit on these assets. In the event that a profit is not made, the President must report to Congress with a plan on how to make up any shortfall from the financial industry. And if there are profits, they must be used for debt reduction.
In addition, this legislation directs the Securities and Exchange Commission (SEC) to suspend mark-to-market accounting if it is found to be in the public interest, raises the Federal Deposit Insurance Corporation (FDIC) insurance limit from $100,000 to $250,000, provides responsible homeowner relief such as a three-year extension of mortgage debt forgiveness, and protects middle-class Minnesotans from higher taxes.
Going forward, we cannot go back to business as usual. The need to aggressively undertake financial regulatory reform is a top priority of mine and will remain so until we pass much-needed legislation. Our current system is broken - we must have a forward looking regulatory system for our 21st century economy. We need greater transparency and accountability across our entire financial system so that regulators and consumers fully understand financial products and their possible risks. We also need to put more "cops on the beat" to better police Wall Street.
You may also be interested to know that I have called on Wall Street executives to repay any and all ill-gotten bonuses they may have received, and I have also asked Attorney General Mukasey to investigate whether Wall Street executives engaged in criminal conspiracy and fraudulent activities. Executives who clearly helped to create this crisis must be held accountable, and those who have broken our laws should be punished through fines and jail time.
This was not an easy vote. In fact, this was one of the most politically unpopular votes I have had to take. But the thing is, I don't think Minnesotans sent me to
to cast easy votes. You sent me here to weigh pros and cons and do what is best for our state. At the end of the day, and after laying everything out on the table, the dangers of not acting far outweighed any political fallout that may come because of my vote. Washington
These are extremely challenging times. Please know I will continue to do everything in my power to support the economy and protect the taxpayer.
While we may not view this issue the same way, I do appreciate the chance to respond. I respect and appreciate your advice and hope you will continue to share your thoughts and ideas with me.
United States Senate
Oct 8, 2008
Regarding the economy, fuel costs, housing and government
I am not convinced and I do not think this will go away and making people think it can be fixed in less than a few Senate terms is naive.
My Permaculture group designs self sustaining gardens, orchards and vineyards. We install the designs to feed the households. We can feed a family of four on a quarter acre. My own families are getting a heads up for next summer. I have put in four gardens so far.
I am not betting on the government or corporate America to make things right.
I just thought this was off a few years from now. I keep anticipating things out too far.
I was off on $4 gas by six months. I was off on our agrarian transition by 6 years.
Corporate America has jump started the transition.
The transition has started and it will not be finished for a generation.
Plant a garden and get some chickens.