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A letter from Louie...

Discussion in 'Financial Cents' started by Jonas Parker, Sep 26, 2008.

  1. Jonas Parker

    Jonas Parker Hooligan

    Proving that at least one of the congress-critters "gets it".

    Friday, September 26, 2008 11:01 AM
    From: "Rep. Louie Gohmert" <tx01ima@mail.house.gov>

    September 26 in the Year of our Lord 2008

    Mr. Jonas Parker

    Dear Mr. Parker,

    Thank you for contacting me regarding the financial bailout. I appreciate having the benefit of your views on this issue. I am also quite grateful that you and I are so much in agreement over the problems with Secretary Paulson's proposal to create the biggest socialist extension of the United States government in it's entire history.

    This is a very frustrating time here. Our capitalist, free market world is under attack by insiders who have acted out of unrestrained greed, and outsiders who want to have more government to dictate every aspect of our lives. I have sent a letter to Secretary of the Treasury Henry Paulson and Federal Reserve Chairman Ben Bernanke expressing my deep concerns over the increasing government bailouts of private sector companies. These bailouts have set a dangerous and unmistakable precedent for the federal government to always bailout the greedy or imprudent from the consequences of their own poor economic decisions. We must restore decency and consumer confidence in our market system by reinstating accountability and consequences for the officers of publicly traded corporations, by giving incentives to do the right thing, and the loss of improperly gained assets for doing the wrong things. Accountability is what keeps our markets free and makes our economy strong.

    I have told Sec. Paulson that I will not accept a socialist solution to this crisis. Some of my solutions include having the mortgage-based securities packaged so that others than OPEC can buy them and service them. Also, requiring officers of the failed financial institutions to have their millions brought back to be part of the employee pension fund and to address indebtedness under circumstances in which they caused the insolvency I have considered. I have proposed giving banks the option of carrying FDIC insurance on its deposits of $100,000 or $1,000,000, at the bank's choice. Furthermore, I have thought about providing substantial tax incentives to purchase the mortgage-based securities so taxpayers don't have a new bureaucracy that does. Potentially, we could also have a form of FDIC type insurance on the security assets that are purchased by the private sector. There are other suggestions, but those are some of the basics.

    You and so many other American taxpayers have made clear that you do not want to be bailing out Wall Street corporations. The thought of asking my constituents to pay for the gross improprieties of Wall Street corporations is abhorrent to me. Please be assured that I will continue to monitor this significant issue and will continue to work with my colleagues so that the housing and mortgage industry are more transparent, accountable, reliable and fair. If I can ever be of service, please do not hesitate to let me hear from you again. As frustrating as it may be, it never ceases to be a true honor to serve you in the United States House of Representatives.

    With kindest regards, I am
    Very Truly Yours,

    Hon. Louie Gohmert
  2. ghrit

    ghrit Ambulatory anachronism Administrator Founding Member

    He is on the right track. However, I disagree with providing incentives for doing the right thing, that leaves too many holes, judgments to be made. Doing the "right thing" should be it's own reward, not to mention those that behave "right" will see their business increase as their honesty becomes known.

    It is a fine idea to return excessive reward money to the companies that reward their officers regardless of success or failure, but probably would face court challenges beyond dreams. Those parachutes are contractually established in most cases, and judges MUST NOT be given leeway to overrule an existing, legally derived and fairly negotiated contract lest all contracts be called into question. Perhaps some future limitations could be established, but ex post facto cannot be condoned. In the meantime, write off the rewards as an expense of doing business, and let them use the reward money to defend themselves in the almost certain to be initiated stockholder suits. Those corp beanbags will probably lose, thus lose the money anyway. (Too bad the attorneys will make money, but even rats have to eat. Sorry Jerry, but you know it is true.)

    It is extremely difficult to punish stupidity or bad business judgment, simply because there is no measure for either one ahead of the fact; that is, no established way to assess judgment questions beforehand. The beanbags that got us here had no way, nor guidance (beyond what the rest of the industry was doing) to know they were treading on their own foreskins. Those that did recognize what was going on prudently stayed out. Unfortunate that there were not enough of them, and didn't make enough noise, or were poo-pooed until they shut up.
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