[StBernard] Senate Financial Reform Bill Extends Bailouts, Doesn't Reform

[Westley Annis]

Dear Friend, 

	

The bailouts of big Wall Street financial firms and auto companies were
watershed moments in modern American history. I fought against those
bailouts because I believed that the federal government should not dominate
and control the economy in that fashion, picking winners and losers with our
tax dollars. 

	

The recent financial crisis has brought to light serious problems with our
financial system and the laws that govern it, and this demands serious,
systemic reform.  But the recently passed Senate financial reform actually
makes some problems worse and completely ignores others. 

	

This Senate bill not only wouldn't end the practice of picking winners and
losers; it would institutionalize it. 

	

Washington's bailout mania would continue under the auspices of trying to
protect failed firms that are "too big to fail." The bill's new "resolution
mechanism" would provide sweeping authority to the Federal Deposit Insurance
Corp. to borrow from our Treasury to support failing firms.  And it would
even provide the FDIC with enough latitude to run a large financial holding
company for up to five years - and would let bureaucrats favor some
creditors and stockholders over others. Again, government picking winners
and losers, often based on politics. 

	

The legislation also would create a new all-powerful super-bureaucracy with
unbridled authority. This new super-bureaucracy wouldn't just regulate
banks: It would micromanage any transaction involving four or more
installment payments. That covers your family orthodontist and vet, too. 

	

Finally, the bill doesn't even address the two major contributors to the
housing loan failures that dragged down our economy: Fannie Mae and Freddie
Mac. These two taxpayer-supported entities became the backstops for reckless
loans. They actually encouraged and offered the government's consent to the
irresponsible lending practices that were the root cause of the crisis. 

	

Americans are fed up with Washington's bloated spending, taxpayer bailouts
and government overreach. This bill isn't a "good start" at reform. It's
just more of the above. 

Sincerely,
David Vitter
U.S. Senator