The Party’s Over
by Jennifer on 02.08.2010
Wall Street just doesn't get it. Last week insurance giant AIG announced that it would be paying out $100 million in bonuses—after America’s taxpayers bailed it out to the tune of at least $180 billion! Americans are simmering and ready to brew over.
Here in Ohio, people are hurting like they haven’t hurt since the great depression of the 1930’s. Last week a gentleman in Cleveland asked me what I thought the difference between a recession and a depression was. I know he saw little difference, and frankly it was hard to draw the line for him in his situation.
Over the course of my campaign, I have listened to heart-wrenching stories about families facing financial ruin who have lost their health insurance and now cannot afford to pay medical bills for their children’s special health needs. And I have seen small business owners struggling—and in some cases having to shut their doors completely, because they cannot get credit to keep their businesses going (even when they have purchase orders in hand). Meanwhile, Wall Street and the nation's large financial institutions are picking up right where they left off as if the biggest taxpayer funded bailout of our country’s history was just a “blip” on the radar screen. I’ve got news for them.
The party’s over.
The fact of the matter is, major banking regulation reform is needed—to make sure that never again will our citizens face the record foreclosures and loss of their homes that they have in the last 3 years, to make sure that never again will small businesses and medium-sized businesses like auto parts suppliers be denied credit that they need to keep and create jobs, and to make sure that hedging is not going on in our financial institutions that have callously trampled our trust to satisfy executive compensation packages while guaranteeing shareholder returns.
Senators Barbara Boxer of California and Jim Webb of Virginia introduced legislation last Thursday that would impose a 50-percent fee on executive bonuses of more than $400,000 from companies that received more than $5 billion from the government's Troubled Asset Relief Fund in 2009. The Boxer-Webb legislation would likely raise more than $10 billion for the U.S. Treasury—all of which would go into a fund for new low-interest, guaranteed direct loans to small businesses needing credit. While that’s a start to recoup taxpayer money, we can do more to get to the heart of the problem, and end Wall Street’s partying on our dime.
President Obama proposed levying an assessment on banks with assets of $50 billion or more based on the risk of their investments, similar to the risk basis to determine premiums for insurance policies. This would affect about 50 banks by requiring a fee of 0.15 percent on the liabilities of these institutions, excluding any insured deposits. This proposal—a tax on the risks banks take, is a direct way to “incentivize” banks to reform their practices. The fee would raise $90 billion over 10 years, paying taxpayers back and discouraging large banks from taking on non-deposit liabilities involving excessive risk.
Even though Canada has just five banking groups, these banks did not prove to be “too big to fail.” Canadian regulations limit the extent to which banks can take on risk. American banks, however have taken on nearly unabated risk because of Reagan-era deregulation. Brought back from the brink of disaster by American taxpayers, American financial institutions that received TARP bailout funds have chafed under even minimal regulation, some actually borrowing to repay TARP funds—all in time to award executive compensation bonuses.
Congressional House legislation awaits Senate passage to create a Canada-like Consumer Financial Protection Agency, to establish limits on leveraging, and to limit securitization of loans by requiring that lenders hold on to some of their loans. Yet, this bill is expected to languish in the U.S. Senate.
The party should have been over a long time ago.
I’ll take the tough steps to sponsor legislation that regulates banks on things like mortgage securitization and derivatives and the slicing and dicing of “tranches” made up of pieces and parts of aggregated mortgages, grouped--and even wagered on by banks—by risk of default. I’ll fight against banks gambling on the American dream—our homes—for nothing more than a better return and for fatter bonuses that reward wagering with other people’s money.
But I won't stop there. I’ll introduce legislation that will make it illegal for any corporate PAC or corporate executive whose institution received federal bailout dollars from contributing to federal candidates. People who are on the receiving end of government funded corporate aid should not be rewarding those who vote to give them the money. The establishment candidates on both sides of this race have already taken thousands from PACs and executives of banks who’ve received bailout funds.
I won't. Not today. Not tomorrow. Not ever. It’s not right, and I don’t believe the American people believe it’s right.
Most corporate givers do not make political contributions from a sense of altruism—they generally play in the political arena for business reasons—and that’s it. The votes of “establishment candidates” can usually be predicted by looking at their campaign finance reports. Not mine. My last report showed that people who gave less than $200 since I started my race a year ago contributed more than half of the money I raised last quarter.
My campaign is not about money. It's about people. And when money votes, it's a pretty scary thing. Just look at the so-far successful efforts to block health care reform.
As I told a CQPolitics reporter last weekend, ". . . in this economic environment, it's rather obscene when people start crowing about how many millions they have on hand."
I want to prove with our campaign that there is another way to run and win an election—we owe it to ourselves, and we owe it to our young people. So many people became involved for the first time ever in President Obama’s 2008 presidential campaign. We’ve got to give them—and us—a reason to keep hoping and pushing for the change we believed in. We’ve got to show them that we can believe in that change under even the fiercest resistance fueled by bedrock, moneyed Washington interests. It just takes people—a lot of people—who don’t give up.
This is our election, and we have to prove it. Click here to rush $25 or more to my campaign.
While banks and financial institutions have “covered their bases" and given to both my primary and expected general election opponents, I will continue to engage voters, coordinate ambitious volunteer efforts and surge in the polls. The ability to communicate with you has made that possible, and this will make all the difference for us in both May and November.
We’ll know the results of the primary election in less than three months. How do you want the future to look? Do you want a U.S. Senator who will be thinking first and foremost about what will bring more jobs back to Ohio, about what will help Ohio’s families and about what will restore a quality of life in Ohio and in America we haven’t seen in years? Or do you want to see an Ohio general election fight between two candidates who look nothing different than the opposing sides of the same dollar bill?
I know this fight won’t be easy, and I’ve been called a “defiant underdog.” But underdogs are scrappy, and they often win. This year may see the fiercest election fights Ohio will have seen in decades. I'm committed to winning, because I'm committed to you. The people of my state and country should no longer suffer the government transgressions brought on by the power and corruption of special interest money offered for no other reason than to consolidate and preserve the power of a wealthy few.
Let's show them the party's over. Please help me win. Click here to rush $25 or more to my campaign. With contributions from people like you, we can win this election. But we have to start now.
Thanks for your help.