An Open Letter to the U.S. Congress Regarding the Current Financial Crisis

It is difficult to believe that the U.S. government is contemplating taking on the bad assets of these institutions at probable taxpayer loss and effectively immunizing the bondholders (and shareholders) of these companies. . . the Treasury proposal to address current financial difficulties places corporate bondholders ahead of the public, rewards irresponsible risk-taking, and sets a precedent for future bailouts. Moreover, we know from a long history of economic experience across countries that a major expansion of government liabilities is invariably followed by multi-year periods of extremely high inflation, particularly when it is not matched by a similar expansion of economic production. Such inflation would initially be modest because of the current weakness in the economy, but could pose unusual challenges to the United States in the coming years.

This link from Mish Shedlock produces an email to the involved Senators: senator@shelby.senate.gov;senator@sessions.senate.gov;senator@biden.senate.gov;senator@akaka.senate.gov;senator_lugar@lugar.senate.gov;olympia@snowe.senate.gov;senator@kennedy.senate.gov;senator@stabenow.senate.gov;senator@levin.senate.gov;senator@klobuchar.senate.gov;kit_bond@bond.senate.gov;mccaskilltransition@mccaskill.senate.gov;senator@bennelson.senate.gov;senator@ensign.senate.gov;mailbox@sununu.senate.gov;senator_bingaman@bingaman.senate.gov;senator@dorgan.senate.gov;arlen_specter@specter.senate.gov;tim@johnson.senate.gov;senator@hutchison.senate.gov;senator_leahy@leahy.senate.gov;senator@warner.senate.gov;senator_murray@murray.senate.gov;senator_byrd@byrd.senate.gov;senator@rockefeller.senate.gov;senator_kohl@kohl.senate.gov;

Here is the body of a suggested letter which may be emailed:

Dear Senator

Instead of rushing into a $700 billion Paulson bailout proposal, please consider the following alternatives:

Mish’s Open Letter To Congress On The $700 Billion Paulson Bailout Plan
http://globaleconomicanalysis.blogspot.com/2008/09/open-letter-to-congress-on-700-billion.html

Hussman’s Open Letter to the U.S. Congress Regarding the Current Financial Crisis
http://www.hussmanfunds.com/wmc/wmc080922.htm

Your Name
Your Address
Your Phone Number
Your Email Address

“Congress can benefit the American public by maintaining a focus on responsibly assisting homeowners in distress rather than defending the stockholders and bondholders of overleveraged financial companies. It is essential to recognize that the failure of these companies need not result in “financial meltdown” provided that the “good bank” representing the vast majority of assets and liabilities is cut away, protecting customers and counterparties, so that the losses are properly borne out of the capital base of the companies that incurred them. “

I loved this guy when he starred in all those episodes of “The Paper Chase” and then did the ads for the investment firm, “They still make money the old fashioned way, they EARN it!”

I thought he was dead, though.

You're thinking of John Houseman. He died in 1988 at age 86.

"They make money the old fashioned way. They EARN it."

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