Bailout Bill Lobbying Frenzy

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The consideration of the $700 billion bailout bill — now lovingly known as the Authorization for Use of Financial Force — has turned into a thriller as the clock winds down on the session of Congress (set to end on Friday) and the stability of markets and financial institutions. Lobbyists for large business trade groups are racing down tips and attempting to defuse unpalatable proposals, limits on executive compensation and bankruptcy relief for homeowners, like Jack Bauer would a nuclear device. According to The Hill, the Chamber of Commerce’s lobbyist Bruce Josten says, “If we don’t move quickly, we could be in the soup.”

One lobbyist is using a flow chart to track proposals, others are reading reports at 4 am. Red Bull sales are probably through the roof. One thing that’s for sure, these lobbyists, the one’s who have worked hard to prevent any kind of oversight of the financial system and the mortgage market leading up to this crisis, are now working to prevent anything punitive or helpful to those who’ve lost their homes in this mess.

Francis Creighton, vice president and chief lobbyist with the Mortgage Bankers Association: “Bankruptcy is such a divisive issue in this debate, and resurrecting bankruptcy right now is completely unproductive … This bill we are talking about is not a mortgage bill, not a housing bill. It’s supposed to address the threats to the entire economy.”

Steve Verdier, a lobbyist for the Independent Community Bankers Association (ICBA), on bankruptcy relief: “We are vigorously opposing that … If that happens, then the mortgage rates for other consumers are going to go up.”

American Banking Association in a letter to Congress: “Authorizing write-downs of mortgages by bankruptcy judges will increase the risks of mortgage lending at a time when the market is already struggling”

During the 2008 cycle the three trade groups represented by these individual lobbyists have spent $3.1 million on PAC contributions to congressional lawmakers. Over the same time period they’ve spent $8.9 million dollars on lobbying Congress. (Data from OpenSecrets.org) That amount of money gives them the access they need to get their message to Congress.

During this lobbying feeding frenzy, Congress should be asking themselves one simple question, “Should I be listening to the very people who helped cause this mess? Shouldn’t I try to listen to someone else?”

If lawmakers wanted to they could go to PublicMarkup.org and see what people are saying about each section of both the Dodd proposal and the Paulson proposal. It could be a useful way to have a discussion directly with people concerned about the bill, rather than the money merchants of K Street. Already, 81 comments have been left on the Dodd bill and 41 on the Paulson proposal.

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  • KD

    “There are people on Wall Street I’ve talked to that say this is NOT the way they would do it
    They would inject capitol and have a taxpayer participation…. They would Not take all the distressed assets which nobody knows how to evaluate and they may be worth pennies now and have the US Treasury pay above market prices for them and break the bank
    and not have enough money to do what is needed to be done for the prudent saver like funding the FDIC
    All these and other ideas are all percolating but they are shut out of Congress because Bush wants the Congress to give him everything he wants a Blank Check Shut up and then go back and run for re-election
    This is a Dictator we have here This is a Monarch This is King George the IV
    This is the most impeachable President in modern history This is the President that criminally got us into the Iraq war This is the President that didn’t know what to do after Katrina
    This is a bunch of Gangsters who have hijacked our Federal Government out of the White House and why do we expect them with their corporate buddies on Wall Street do anything that would help the average worker the average small investor the average taxpayer
    So that is why we have to slow it down
    If they don’t DEMAND a say they are going TO PAY PAY PAY
    The free market ideology of these Corporate capitalists is CRUMBLING but without any SHAME
    They are now saying
    Hey folks you all going to get hurt
    All you little people are going to get hurt
    So we got to be bailed out by YOUR tax dollars in Washington
    This is really OFFENSIVE to people
    This is really got down to their sense of GROSS GREED and lack of FAIRNESS
    And that is why
    the RUMBLE is beginning around the country and EVERYBODY should know the louder the RUMBLE the more the members of Congress that fear you THE PEOPLE than the corporations and their lobbyists in Washington and Wall street The more they fear you The better they are going to stand with you”
    Ralph Nader

  • KD

    The question is not What went wrong
    The question is What went right ? For a second
    Protect the taxpayers NOT the Corporate Criminals
    Revisions that SHOULD BE made
    Comprehensive Regulations
    Taxpayer participation
    Full Disclosure
    and more power to the Share Holders
    Re-enact FDR’s Glass-Steagall Act
    “Mr. Glass: Here [section 21] we prohibit the large private banks whose chief business is investment business, from receiving deposits. We separate them from the deposit banking business.
    Mr. Robinson of Arkansas: That means if they wish to receive deposits they must have separate institutions for that purpose?
    Mr. Glass: Yes.”

    Hey and What about Congressional hearings ?

  • Zakariah

    This entire issue can be wrapped into a very simple understanding: no one should be bailing out gratuitously rich corporations or their employees. It is a sad part of life when we have to pay for our mistakes; but the truth is, if mummy and daddy bail us out ever time we get into trouble, we never learn. I am sure that every one of us knows someone in their thirties who is till living at home under the protection of their parents who refuse to cut the chord. No one is bailing out the $100,000.000 in debt that I accrued while working towards the admirable task of attaining a university education. And the best anyone would do for me if my life collapsed because of my scholastic debt, would be to allow me to declare bankruptcy and live with destroyed credit for a long time. No one would come and buy my debt so that I could keep on living a lucrative life. The men and women who made mistakes in the housing market should pay for their mistakes like the rest of us, even if it means we have to scrape through a recession for a while.

    I have a better idea than bailing out the banks: Have the fed buy up all scholastic debt, mortgage debt, and credit card debt, than zero it out. Suddenly consumers will have billions, maybe trillions of extra dollars in money to pump into the economy. Why perpetuate the problem by keeping the fat cats filled with money, when the real problem is that all of the money is being hoarded by the very people the government is talking about bailing out. If consumers didn’t have so much debt to these greedy elite, there would be no problem to speak of.

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