Tuesday, September 30, 2008

Mary Fallin

Last week I wrote to my representatives in Washington about the bail-out. I actually received a response from Mary Fallin in my email today:

September 30, 2008

Mr. Rob Abiera
Oklahoma City, OK

Dear Mr. Abiera:

Thank you for contacting me about ongoing efforts to confront the crisis in our financial system. I share your deep concerns over this crisis. First, rest assured that Congress and the administration are continuing to work to develop legislation that will be both effective and prudent - and I am working with my colleagues in the House to that end. Our goal is to craft a bill that addresses both the immediate crisis and assures stability and responsibility in the out years. It is also absolutely vital that this legislation protects the taxpayers.

After much deliberation, I voted against the initial bill presented to the House on Monday, September 29. I felt - as did 227 other representatives from both parties - that the bill contained serious flaws and that it failed to shield taxpayers from being placed in a position of underwriting a massive bailout of organizations that had acted unwisely and irresponsibly. Our goal should not be a bailout; it needs to focus on a productive workout, plus reforms that will prevent such a crisis from happening again. As your representative, I cannot in good conscience sign a blank check without appropriate safeguards and assurances that those funds will return to the treasury once the crisis has passed.

In the end I agreed with the overwhelming majority of Fifth District residents who contacted me to express their views. They believe that government has a duty to act, but not at the expense of basic principles like common-sense financial discipline and individual responsibility. Our work is not yet done here in Washington, but I am confident we will be able to craft a bill that protects taxpayer interests and preserves the fiscal integrity and continued freedom of our financial markets.


Mary Fallin
Member of Congress

Since Congress is still working on another version of the bail-out, I thought I'd send her a reply. The House website is not responding, so I can't use the contact form on her site, but now I have her email address, so I simply sent it directly from my computer.

I included a letter by John Lewis which was posted on NoodleFood earlier today.

Dear Congresswoman Fallin,

Thank you for voting against the bail-out on Monday. I am writing to urge you to continue to resist any effort to use this situation as an excuse to extend the government's power over our economy. Please continue to vote against any kind of bail-out - what is happening now is not a failure of the market but a failure of government intervention. The free market will work if it is allowed to remain free.

Freedom is not just an "ideology". It works.

As further explanation, I am forwarding the following letter, which I am in full agreement with: now is not the time to extend the government's power, but to start repealing regulations.

Rob Abiera
Oklahoma City

Date: Monday, September 29, 2008
From: John Lewis
To: Congressman David Price of North Carolina
Subject: Reply from Congressman David Price

Dear Congressman Price;

Thank you for your frank and fast response. I should be clear. I am opposed to bailing out these firms. But what I am more opposed to is the entire political culture of regulation--including manipulation of interest rates, Sarbanes-Oxley, changes in accounting rules, the Community Renewal Act, and a scad of others--that has fostered this mess. Two weeks ago no politician in Washington knew this was coming. Suddenly, after several all-nighters, they have enough knowledge to grant a quarter of a trillion dollars to a government bureaucrat, to dole out as he sees fit--and to promise another half-trillion, should his actions make it worse.

Meanwhile, the country focuses on the allegedly evil CEOs, "speculators" (read "investors"), and loan initiators who were earlier damned for NOT making loan money available to high-risk borrowers. I remind you that the Community Renewal Act penalizes firms for not making such risky loans. Now, suddenly, those firms are villified for following the law. Well, that's government--it faces no penalties, except a periodic popularity contest, and can contradict itself with impunity.

Most of all, I resent the politicians and punditrs who are claiming, contrary to evidence, that it is now "impossible to get a loan" on Main Street. It is impossible to borrow millions on Wall Street, but regional banks that made prudent investors are not in danger--unless the government further coerces them.

The government is not saving Main Street--it is nationalizing it. Is it not true that, with the takeover of Fannie Mae and Freddie Mac, the government now holds paper on tens of millions of American mortgages? What does granting American citizens "equity positions" and "profits" in companies seized by the government mean, except communism? Don't we condemn Hugo Chavez for nationalizing oil companies?

I will also recall, as a student of economics, that the Great Depression was caused by a string of obnoxious legislation, and was then cruelly extended by massive government interference. Contrary to prevailing, but long-discredited, opinion, the government did not save us from that mess. It created, and prolonged, it. Twenty years earlier, JP Morgan ended the panic of 1908 in a few weeks--bankers in 1929 could not so act. Today, Morgan would have been jailed for the private pooling of assets he arranged. Is it not true that AIG was told by the Attorney General of New York that it would not be allowed to sell sound assets in order to save the holding company? Who is to blame for the collapse of a huge, and largely sound company, excpet those who forbhid its executives from acting?

You will forgive me if I have no respect for the likes of Senator Schumer, who started a run on a bank with his irresponsible statements and then claimed virtue for them, or Senator McCain, up to his neck in the Keating scandal, or Senator Dodd, whose reputation was on the rocks until this crisis saved him, or Senator Obama, who had not a clue at a White House meeting last week, and then went on-script before the press to cover his ignorance. You will please forgive me if promises of "oversight" by these PR men do not instill confidence.

I much more respect the CEOs who have spent their years in the business, and who face actual consequences for their errors. They do not have access to hundreds of billions of dollars of other people's money--and they do not expect their stockholders to approve busines plans that cannot foretell whether they will lose three-quarters of a trillion dollars, or get some of it back in five or twenty years. They do not have their hands in the pocket of every person who produces in this country.

The truly brave politicians are those who recognize that the government is largely to blame for this mess, and should start emergency repeal of regulations now. Only this can allow responsible CEOs to start making decisions based on sound economics, rather than fear of breaking a law.

John Lewis

Dr. John David Lewis
Visiting Associate Professor of Political Science, Duke University
I also sent Lewis's letter to Inhofe and Coburn.

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