9-25-08, 9:59 am
A letter addressed to Congress and signed by more than a dozen labor and community leaders, including the presidents of both national labor federations, demanded this week a 'common sense' approach to the Wall Street bailout that includes several conditions that will address the needs of working families.
The groups, representing more than 20 million Americans, also announced that their members and supporters are participating in hundreds of events to be held across the country on Thursday, Sept 25, to demand conditions on the Wall Street bailout.
The letter opened by describing the Wall Street bailout, as it stands, as a sort of blackmail of taxpayers in response to a 'banker's strike.' 'Every man, woman, and child in America is now being told to ante up $2,000 – an estimated $700 billion in all – to bail out Wall Street’s recklessness, or the very people who created this crisis are telling us that they will bring down our entire economy,' the letter read.
It went on to reject as 'irresponsible and unacceptable' the Bush administration's plan to give the Treasury Department unchecked power 'to spend $700 billion to bail out any financial institution across the world.'
The letter demanded that Congress include at least six key provisions in any bailout package. First, there must be public oversight to check the power of the administration in distributing the bailout funds. The letter demand that 'any funds must be controlled by an independent entity, with consumers and workers given seats on its board.' In addition, Congress should empower itself to oversee who is appointed to this independent entity.
Taxpayers should also be protected from unscrupulous corporations who want to use the bailout to unload bad debts onto the government. To do so, Congress should allow taxpayers to 'get equity' in any such firms who try to sell 'toxic paper' to the government above its current value. In this way, the letter argued, taxpayers can realize a return on their investment in the bailout and/or prevent unscrupulous corporations from profiting from this disaster.
In addition, any bailout deal must include new regulatory powers and oversight. 'No bailout can go forward,' the letter went on, 'without requiring the necessary regulation to insure this does not happen again.' Any corporation that seeks assistance should be required to agree to allow close scrutiny of its dealings, and 'it should have stringent capital requirement imposed upon it.'
The general economic crisis must be addressed as well, the groups demanded in their joint letter to Congress. Rushing to fix Wall Street's problems alone won't avoid economic recession. The letter called for 'major public investment in new energy and conservation, rebuilding schools and infrastructure, extending unemployment and food stamps, helping states avoid crippling cuts in police and health services.'
CEOs and executives must also be held accountable, the letter added. 'Any firm that applies for relief must agree to cancel all stock option programs and CEOs should have stringent limits placed on their compensation until the Company has repaid all taxpayer assistance.'
Finally, much of the crisis on Wall Street was caused by the collapse of the housing bubble. But predatory lenders should not be aided at the expense of the victims of the lending scams. 'Many homeowners, however, were misled by predatory lenders into taking mortgages that they didn’t understand and couldn’t afford,' the letter insisted. 'No bail out of the banks should take place without measures to help people in trouble stay in their homes.' The groups demanded changes in bankruptcy code to allow homeowners facing foreclosure to renegotiate their agreements and stay in their homes.
So far, resistance by the American people and by labor and its allies as ground the bailout process to a halt. In a speech Wednesday, Sept. 25, Bush appeared to be bending to public pressure and backed off of his demand for an immediate bailout with unlimited power for the Treasury Department and with no strings attached. Thursday, Sept. 25th, thousands of Americans will be protesting a bailout for Wall Street that ignores the needs of Main Street.
Read the text of the letter below, or
The Bailout: A Call For Common Sense
Every man, woman and child in America is now being told to ante up $2,000 – an estimated $700 billion in all – to bail out Wall Street’s recklessness, or the very people who created this crisis are telling us that they will bring down our entire economy.
The Treasury Department’s proposal that the Secretary be given essentially unlimited authority to spend $700 billion to bail out any financial institution across the world is irresponsible and unacceptable.
We urge the Congress to insist on some basic conditions for any bailout.
1. Public Oversight. This kind of power can never be centralized in a single individual – much less one who did not even stand for election. Any funds must be controlled by an independent entity, with consumers and workers given seats on its board. Congress should be empowered to name independent monitors and to approve all board members.
2. Protect the Taxpayer. The Treasury bill would have taxpayers buying paper that nobody else wants at prices far above its current value. If a firm wants to auction off its toxic paper to the U.S. government, taxpayers should get equity in that firm equal to any amount paid in excess of the paper’s value. This will deter profitable firms from using the government as a dumpster for their toxic paper. And it will insure that if the bailout works and the firms become profitable, taxpayers, not simply bankers, benefit from the upside.
3. Curb the casino. This crisis was caused because sensible regulations of the banking system that worked for dozens of years were dismantled or went unenforced. No bailout can go forward without requiring the necessary regulation to insure this does not happen again. Any institution which receives assistance should agree to come under a microscope going forward in terms of disclosure requirements, and it should have stringent capital requirement imposed upon it.
4. Invest in the real economy. Ending the bankers strike is not sufficient to avoid the recession into which we have been driven. Major public investment in new energy and conservation, rebuilding schools and infrastructure, extending unemployment and food stamps, and in helping states avoid crippling cuts in police and health services is vital to get the real economy moving and put people back to work. No bailout should proceed without being linked to support for a major public investment plan to get the economy going.
5. Hold CEOs and boards of directors accountable. Wall Street CEOs shouldn’t be pocketing millions while taxpayers are forced to bail them out. Any firm that applies for relief must agree to cancel all stock option programs and CEOs should have stringent limits placed on their compensation until the Company has repaid all taxpayer assistance.
6. Aid the victims, not just the predators. Both bankers and homeowners made foolish bets that home prices would keep rising. Many homeowners, however, were misled by predatory lenders into taking mortgages that they didn’t understand and couldn’t afford. It would be simply obscene to help the predators and not those that they preyed upon. No bailout of the banks should take place without measures to help people in trouble stay in their homes. Explicit provisions should ensure use of the full array of financial and legal tools available to the government to stop foreclosures and restructure home mortgage loans for ordinary Americans. Where workouts are not feasible, people should be allowed to stay in their homes as renters.
John Sweeney, President, AFL-CIO Andy Stern, President, Service Employees International Union (SEIU) Gerald McEntee, President, American Federation of State, County and Municipal Employees (AFSCME) Randi Weingarten, President, American Federation of Teachers (AFT) Larry Cohen, President, Communications Workers of America (CWA) Dennis Van Roekel, President, National Education Association (NEA) Leo Gerard, President, United Steelworkers (USW) Maude Hurd, National President, ACORN Nan Aron, President, Alliance for Justice Amy Issacs, National Director, Americans for Democratic Action Robert Borosage, Co-Director, Campaign for America’s Future Kevin Zeese, Executive Director, Campaign for Fresh Air & Clean Politics John Podesta, President, Center for American Progress Action Fund Deepak Bhargava, President, Center for Community Change Deborah Weinstein, Executive Director, Coalition for Human Needs Donald Mathis, President, Community Action Partnership Jane Hamsher, firedoglake.com James D. Weill, President, Food Research & Action Center (FRAC) Brent Blackwelder, President, Friends of the Earth John Cavanagh, Director, Institute for Policy Studies Sarita Gupta, Executive Director, Jobs with Justice Wade Henderson, President, Leadership Conference on Civil Rights Carissa Picard, Esq., President, Military Spouses for Change Eli Pariser, Executive Director, MoveOn.org Political Action Sally Greenberg, Executive Director, National Consumers League Christine L. Owens, Executive Director, National Employment Law Project Gary Bass, Executive Director, OMB Watch Joanne Carter, Executive Director, RESULTS William McNary, President, USAction Paula Brantner, Executive Director, Workplace Fairness Dan Cantor, Executive Director, Working Families Party Mark Lotwis, Executive Director, 21st Century Democrats
