Market Falls Again
Country Needs to Save Homes and Jobs
No More Bailouts
| FOR IMMEDIATE RELEASE | CONTACT: Congressman Dennis Kucinich |
WASHINGTON - October 6 - Congressman Dennis Kucinich, (D-OH), who is one of the leaders challenging the $700 billion bailout of Wall Street, said that in light of the continued decline of the stock market, the lack of meaningful protections for homeowners and the likely collapse of additional mortgage backed securities such as Alt-A loans, that Wall Street might seek additional bailout funds.
"Think about it. Congress passed a $700 billion bailout and the market is continuing to plunge! At 3 p.m., the market was down close to 700 points. Already economists and the news media indicate that the $700 billion bailout passed on Friday is not enough," stated Kucinich.
"If Wall Street does come back for another bailout, we must be prepared in advance to say NO," stated Kucinich. "The bailouts of Wall Street must stop. It will never be enough. When the Federal Government gets involved in picking winners and losers on Wall Street, we open up a financial whirlpool of insatiable greed," he said.
"The fundamental problem that led to the credit crisis is that millions of homeowners are in jeopardy, and millions of people are out of work. Congress rushed to bail out Wall Street but sits on its hands when millions of homeowners are at risk," he said. "The only way to prevent another bailout is to take action which will directly impact the market stress at its root - - the millions of homeowners who face default on their mortgages. This is the path toward market stabilization," he said.
Kucinich has persistently advocated legislation that would give the government controlling interest in mortgage backed securities to "help homeowners save their homes by working out their payments, through restructuring the principal and the interest rate on their loans."
"We are now facing the perfect financial storm. The elements are the deficit spending for the war of 3 to 4 trillion dollars, the trillion more in tax cuts, the war itself, the lack of serious investment in our country and now $700 billion to Wall Street. We are being hollowed out. We are going to see more unemployment and more people losing their homes. With $700 billion we could have made a real investment in the country, in jobs, in infrastructure and in homes. Now we must invest in homeowners to prevent any additional bailout," add Kucinich.
Kucinich said he is preparing a bill, which will "prime the pump of the economy through helping people save their homes while putting millions of people back to work."
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Dennis Kucinich on the Democrats’ Bailout Betrayal
The passing of the $850-billion bailout pulled the plug on the New Deal. The Great Society is now gasping for air, mortally wounded, coughing up blood. It will not recover. It was murdered by the Democratic Party.
We are on our own. And don't expect any help from Barack Obama and Joe Biden, who lobbied hard for the bill and voted for it. Ignore their rhetoric. Look coldly at the ballots they cast against us. We, as citizens, have only a handful of representatives left in Washington, most of whom were left sputtering in rage and frustration on the House floor. The sad irony is that some of them were Republican.
"This was the largest single act of class warfare in the modern history of this country," Rep. Dennis Kucinich, D-Ohio, who led the fight in the House against the bailout, told me by phone from Cleveland. "It is a direct attack on the American people's ability to be able to stabilize their homes and their neighborhoods. This single vote will define the careers of everyone. We are back to taxation without representation, to markets that are openly rigged."
"We buried the New Deal," he said of the vote. "Instead of Democrats going back to classic New Deal economics where we prime the pump of the economy and start money circulating among the population through saving homes, creating jobs and building a new infrastructure,
our leaders chose to accelerate the wealth of the nation upwards. They did so in a way that was destructive of free-market principles. They ripped away all the familiar moorings. We are in an uncharted sea where the traditional roles of the political parties are being switched. The Democrats have unfortunately become so enamored and beholden to Wall Street that we are not functioning to defend the economic interest of the broad base of the American people. It was up to the Republicans to protect not just a so-called free market but the American taxpayer and attempt to block this. This is an outrage. This was democracy's Black Friday."
Obama arrived on the Senate floor Brutus-like to thrust a knife into the back of the working and middle class. He lobbied hard for the bill. He did so, according to some who met with him on Capitol Hill, because he feared that if he opposed the bailout and it triggered a market collapse it could cost him the election. Better to placate the thieves on Wall Street than stand up for the masses of enraged and swindled citizens.
Obama's betrayal is the betrayal of the Democratic Party. The Democrats gave us the Financial Services Modernization Act of 1999, which ripped down the firewalls that were put in place by the 1933 Glass-Steagall Act. The 1933 act, designed to prevent the kind of meltdown we are now experiencing, established the Federal Deposit Insurance Corp. (FDIC). It set in place banking reforms to stop speculators from hijacking the financial system. With Glass-Steagall demolished, and the passage of NAFTA, the Democrats, led by Bill Clinton, tumbled gleefully into bed with corporations and Wall Street speculators. They achieved fundraising parity with the Republicans. They used institutions like Fannie Mae and Freddie Mac as a welfare gravy train. The Democrats, including Obama, are as compromised as the Republicans.
Obama's voting record in the Senate is in line with the corrupt Democratic mainstream, including Biden, who works on behalf of corporations and especially the credit card industry. Obama knows where power lies in the United States. It is not with the citizens, who with ratios of 100 to 1 pleaded with their representatives in Washington not to loot the national treasury to bail out Wall Street investment firms. Power lies with the corporations. These corporations, not us, pick who runs for president. You cannot be a candidate without their blessing and money. These corporations, including the Commission on Presidential Debates, a private corporation, determine who gets to speak and what issues candidates can or cannot challenge, from universal, not-for-profit, single-payer health care to Wall Street bailouts to NAFTA. If you do not follow the corporate script you become as marginal and invisible as Ralph Nader or Bob Barr or Cynthia McKinney.
Obama has always served his corporate masters. He opposed Rep. John Murtha's call for immediate withdrawal from Iraq and supported continued funding for the war. He voted in July 2005 to reauthorize the Patriot Act. He did not support an amendment that was part of a bankruptcy bill that would have capped credit card interest rates at 30 percent. He opposed a bill that would have reformed the notorious Mining Law of 1872, which allows mineral companies to rape federal land for profit. He did not back the single-payer health care bill HR 676, sponsored by Kucinich and John Conyers. He advocates the death penalty and nuclear power. He backed the class-action "reform" bill-the Class Action Fairness Act (CAFA)-that was part of a large lobbying effort by financial firms, which make up Obama's second-biggest single bloc of donors. CAFA would effectively shut down state courts as a venue to hear most class-action lawsuits. Workers, under CAFA, would no longer have redress in many of the courts where these cases have a chance of defying powerful corporations. CAFA moves these cases into corporate-friendly federal courts dominated by Republican judges.
Obama's support for the bailout, however, is his most egregious betrayal. He had a brief, shining moment to prove he could lead, to capitalize on a popular revolt that cut across the political spectrum. He never attempted to address or mobilize the aspirations and passions of the vast majority of Americans. He was as craven, servile and cowardly as the party he represents. He returned to the campaign trail after Friday's vote as a slick and polished sales representative for our corporate state, telling us to calm down and accept the inevitable.
"Some of the most powerful speeches against this were given by members of the Republican Party who are on the political right," Kucinich said. "They did a superb job in poking holes in the underlying assumptions of the bailout.
They say what they believe. Give me somebody who says what they believe and I can figure out how to get them to a new place. When people say one thing and do another it is very hard to be able to move a debate."
So let us honor, in our moment of defeat, the handful of elected officials who valiantly defied their party leaderships in the House to stage a remarkable revolt that at first succeeded. Kucinich is one. There were others-Brad Sherman, Marcy Kaptur, Peter DeFazio, Lloyd Doggett and Robert C. "Bobby" Scott. They are about all that is left of the old Democratic Party, the party that once looked out for the poor and the working class. Send them a note of thanks. They deserve it. And if you live in their districts make sure you get to the polls in November. They did not sell you out.
"We had two take-it-or-leave-it propositions and the second one was worse than the first," Kucinich said, referring to the plan that came loaded with pages of tax cuts. "Tax cuts are antithetical to a bailout.
We never solved the problem. There were never any hearings on the bill. This premise, that we could prop up the stock market with a $700-billion investment and create some liquidity, was flawed. The problem is that banks do not want to loan to each other. It is not a liquidity problem. Banks are afraid they are going to collapse in short selling. There is a war going on between security firms and banks. Banks are under assault. They are not loaning. The dynamic is driven by the Accounting Standards Board, the Securities and Exchange Commission and the Fed."
The root of the financial crisis, as critics of the bailout plan point out, is that millions of homeowners cannot pay their mortgages. The bailout, as the market decline on Friday following the vote illustrated, does not address the crisis. It solves nothing for the 10 million Americans who face foreclosure. It solves nothing for the growing numbers of unemployed and underemployed. It may well be the equivalent of tossing $850 billion of taxpayer money (including $150 billion in tax cuts) into a furnace and watching passively as our economy continues its plunge.
"We face a perfect financial storm," Kucinich warned. "The elements are the deficit spending for the war of 3 to 4 trillion dollars, the trillion and more tax cuts, the war itself and the lack of serious investment in the country. We are being hollowed out. We are going to see more unemployment and more people losing their homes. With $700 billion we could have made a real investment in the country, in jobs, in infrastructure and in homes. Instead, we got robbed."
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