Just sent emails to Kerry, Kennedy, and Capuano

[prog]

I urge my fellow Americans to join with me on this action. You can find your state's senators here and find your district's representative here.

I dashed this off myself in a minute. You can copy it if you'd like, but I encourage you to come up with your own words, too.

Dear $TITLE $LASTNAME:

I urge you to oppose the proposed $700 billion bailout of foundering financial companies through a massive federal purchase of bad mortgages and other assets.

I am dismayed and disgusted at the idea of using, all told, $1.8 trillion dollars[1] of taxpayer money in order to rescue private-sector firms from their own greed-driven mistakes, and hope that you consider this issue worth fighting.

I look forward to learning of your position and actions regarding this matter.

Sincerely,

Jason McIntosh
Somerville, MA

[1] Source: http://www.cnbc.com/id/26808715

Conventional wisdom is that email, while it does have mass, still carries a fraction of the weight of snailmail or phone calls, so I plan on printing these out and mailing them to the same folks' offices.

Honest question: what is the experience of phoning your senator or representative like? I'm not sure that I want to have a two-way conversation with someone about this - I just want to make my stance and desires known, and then get out. The one time I phoned a senator's office, like four years ago (I don't even really recall what the issue was), I called off-hours and left a voicemail. That was OK. Rattling off a screed to a live human would be a tad more awkward, though.

Comments

[cortezopossum.livejournal.com]

I called once about the university wanting to change the function of a campus building from something that's useful for everyone to something that's questionably useful only for a handful of minorities.

I got a secretary but my guess is that she merely marked down on a tally sheet that I was 'for X / not Y'. Once people start calling in en-masse on a matter the only practical way to handle it is via tally sheet.

[hahathor.livejournal.com]

I've called my senators & representatives many times, and basically what happens is you talk to an intern, they thank you and tell you that your comments are noted. It's really not all that different from talking to voice mail, except that you get a personal thank you.

And thanks for the reminder - it's time to make some calls about this issue.

[kahuna-burger.livejournal.com]

I'm pretty annoyed by these sorts of bailouts too... esp in light of them "tightening up" personal bankruptcy laws to make sure that when individuals make bad financial choices they have to pay as much as possible for their mistakes. *cranky*

I have a friend who said that "predatory lending" was aok, because it was just the match of banks that were willing to make bad choices with consumers who were. I tried to point out that historically the consumers get screwed by those choices while the banks eventually get bailed out, but he didn't believe that would really happen that way.

[gemini6ice.livejournal.com]

I think the primary point is not to keep the private businesses afloat forever, but to keep them afloat long enough to pay off their debts so that the bankruptcy does not continue to domino effect.

These aren't hand-outs; they're loans, fwiu. These businesses will be paying the U.S. back. And, under stricter regulation (since the U.S. becomes the primary shareholder, no?), they will not continue to repeat their mistakes.

And it's not nearly as much of a waste of taxpayer money as the war in iraq, imho.

[radtea.livejournal.com]

Actually, no. They are hand-outs, as currently proposed.

At least that's what Paul Krugman says, and I'm inclined to believe him.

Krugman is saying that banks could unload their CDOs and RMBSs and whatnot today, but not at a price they're happy with. So the government will either overpay, relative to the current market, or not give the banks anything they couldn't have anyway, which is apparently not enough to sustain them through this "desperate crisis."

So the American taxpayer, bless them, will wind up owning a whole bunch of debt instruments that were purchased at above market prices in the fond hope that they will somehow eventually be worth more than their current value.

If buy something at an inflated price out of the goodness of my heart to help out a struggling business... that isn't a loan. The business has no debt obligation to me. It is a hand-out, and that is exactly what American banks are asking for.

This is one more thing that makes me deeply, deeply glad I am not an American, although my sympathy for you guys is reaching all-time highs. Paulson's bailout plan is the fiscal version of the PATRIOT Act: bad legislation rushed through Congress in a panic that expands government powers and attempts to place those powers beyond judicial review.

[gemini6ice.livejournal.com]

What companies are you talking about, exactly? I'm talking about AIG, for one. Which is a loan.

Banks like Merrill Lynch and WaMu? The government is doing no more than assisting in finding buyers.

Freddie Mac and Fannie Mac? The mortgage interest rates have settled down since they took over... which leads to (probably) fewer foreclosures and, consequently, the gov't seeing its investments returned over time with income on top.

The proposed "bad debt entity"? Yes, I agree with you, that would be a form of a hand-out if unnecessary premium prices were paid. But that isn't what we're talking about... I thought. However, the point of a bad debt entity is just to get these troublesome securities temporarily out of circulation... Why can't the gov't purchase them at market prices?

Krugman says "And even if the vicious circle is limited, the financial system will still be crippled by inadequate capital. [P] Or rather, it will be crippled by inadequate capital unless the federal government hugely overpays for the assets it buys, giving financial firms — and their stockholders and executives — a giant windfall at taxpayer expense." I have not seen any evidence that the federal plan actually entails inflated prices. This sounds like an assumption on Krugman's part.

If it's at market price they can sell it in the market

[radtea.livejournal.com]

If purchasing bad debt at market price would be adequate to salvage these incompetently managed companies then there would be no need for a bailout because the companies could sell their debt in the market at the market price. That's not an assumption, it's a tautology!

There is a price at which this toxic paper will circulate, and that's the market price. It's just way below what the incompetents need to survive.

So either the bailout plan is a needless waste of taxpayer money, buying debt that could be sold in the market at exactly the same price without putting the taxpayer on the hook for anything, or it will involve buying debt with taxpayer's money at inflated prices.

If the former, then obviously no bailout is needed and spending public rather than private dollars is unconsionable.

If the latter, then the taxpayer is paying incompetents a premium for the assurance that those self-same incompetents will prosper to screw up another day. As a free bonus they also get a huge power-grab by the Secretary of the Treasury, who wants the power to command without judicial oversight.

[radtea.livejournal.com]

Here's another commentator making the same point in somewhat different language:

http://www.247wallst.com/2008/09/paulson-plan-sh.html

It took me a while to get my head around Krugman's point, and I think McIntyre says it more clearly.