No More Bailouts for Wall Street
William Wilson, President, Americans for Limited Government
James C. Miller III, former Reagan Budget Director
Amy Kremer, Director Grassroots & Coalitions, TeaPartyExpress.org
Colin Hanna, President, Let Freedom Ring
Andrea Lafferty, Executive Director, Traditional Values Coalition
Richard Viguerie, Chairman, ConservativeHQ.com
Mario H. Lopez, President, Hispanic Leadership Fund
Gene Mills, Executive Director, Louisiana Family Forum
J. Kenneth Blackwell, former Treasurer, State of Ohio
Susan Carleson, Chairman & CEO, American Civil Rights Union
Grover Norquist, President, Americans for Tax Reform
Jennifer Hulsey, Co-Founder, American Grassroots Coalition
Gary Bauer, President, American Values
Jim Martin, Chairman, 60 Plus Association
Tony Perkins, President, Family Research Council
Brent Bozell, President, Media Research Center
Mathew D. Staver, Founder & Chairman, Liberty Counsel
Alfred Regnery, Publisher, American Spectator
Kay Daly, President, Coalition for a Fair Judiciary
David McIntosh, former Member of Congress, Indiana
Wendy Wright, President, Concerned Women for America
Tom Winter, Editor in Chief, Human Events
Rev. Louis P. Sheldon, Chairman, Traditional Values Coalition
T. Kenneth Cribb, former Chief Domestic Adviser to President Reagan
MEMO FOR THE MOVEMENT
NO MORE BAILOUTS FOR WALL STREET
RE: Senator Dodd’s Financial “Bailout” Bill is bad for the American taxpayer and particularly for entrepreneurs.
“The Dodd Bill has unlimited executive bailout authority. That's something Wall Street desperately wants but doesn't dare ask for."
-- Democratic Congressman Brad Sherman of California
ACTION: We urge you to speak out in opposition to more bailouts and government spending. We need regulation that will not harm the economy and will not institutionalize a bailout culture. Don’t let the liberal Democrats tell conservatives that they are “pro-Wall Street” when concerns lie with the American economy as a whole.
ISSUE-IN-BRIEF: The Dodd Bill does not end bailouts. What it does do is restrict credit, which will have negative effects on the economy as a whole and particularly on entrepreneurs. Some aspects of the bill have little to do with financial regulation and much to do with supporting special interests.
The Slush Fund
- The bill gives the administration power to take over companies they believe to be risky. It has a $50 billion fund for this purpose, meaning families on Main Street would be paying to bail out firms on Wall Street.
- This $50 billion fund would in fact be a tax on ordinary Americans, as taxes on banks would be passed on in costs to American depositors and borrowers. Consumers, including families, small businesses and family farms, would pay that $50 billion through higher costs for credit products.
- This slush fund encourages irresponsible behavior because the creditors know that they will be bailed out if they lose on risky bets.
The Fox and the Hen House
- The bill would authorize the Federal Reserve to define what a “nonbank financial company” is and regulate it.
- The bill creates a “Bureau of Consumer Financial Protection”, which sounds nice, but the agency has broad power to limit the financial products available to consumers.
- Eric Stein, former leader of the embattled Center for Responsible Lending (CRL), now sits at the Treasury Department and would likely be responsible for shaping this Consumer Financial Protection Agency. The CRL was funded by John Paulson so that it allegedly would harass banks into making loans to unqualified buyers while Paulson shorted sub-prime mortgages for Goldman Sachs. Big Government described Stein’s potential regulating on behalf of consumers as a “fox” guarding the “hen house.”
- Polling data indicate that only 14 percent of Americans support the creation of a financial consumer protection agency, while 65 percent oppose.
- The bill allows a two-thirds vote of the Financial Stability Oversight Council to say that any financial company can come under its oversight and authorizes the FDIC and Treasury to treat the firm’s shareholders and creditors as they choose, with little regard to existing laws.
- Treasury and FDIC are given authority to grant an unlimited amount of loan guarantees to risky firms, without congressional approval.
- The bill gives unions a say on how much pay executives make and gives them a brand-new agency funded directly by the Fed.
- The bill creates “proxy access” whereby a corporation's board of directors are dictated by a majority vote, rather than plurality, which gives incentives for corporate directions to cut deals with unions to avoid a fight.
Killing the Economy
- The Dodd Bill would require start-ups to file with the SEC before seeking investments, which would cause delays while the start-up waits for bureaucrats to review the requests. So if you have a start-up idea, you have to hope that some foreign firm in a less-regulated country will not beat you to the market during that time the government approves your investments.
- The new regulation would also make it harder to find investors. Accredited investors would be limited to those with assets of over $2.5 million, previously only $1 million net worth was required, or a personal income of $ 450,000 (up from $250,000). This extra, and unnecessary, regulation makes it harder for close friends and family members to invest in new ideas.
Silent on Fannie Mae and Freddie Mac
- The bill contains no reform of Fannie Mae or Freddie Mac—the giant mortgage entities—which for practical purposes are now wholly controlled by the federal government.
FOR ADDITIONAL INFORMATION ON HOW THE DODD BILL HURTS THE AMERICAN TAXPAYER WHILE REWARDING WALL STREET, PLEASE VISIT THESE WEBSITES:
(All organizations listed are for identification purposes only)
1015 Fifteenth St. N.W., Suite 1100
Washington, D.C. 20005
Phone: (202) 488-7000
Fax: (202) 488-0806