In Defense of the Economic Stabilization Act (Bailout)

Here is the e-mail I received from my Congressman Christopher Shays (R) in defense of the economic plan that did not pass yesterday in the House. I feel he is one of the few who is voting for the plan that really is sympathetic to those who oppose it, but is willing to say why he is voting for it. Here is the text of his e-mail:

"Dear Friend,

We sent you an email over the weekend about Treasury Secretary Henry Paulson’s request for emergency action to deal with the financial crisis. Today, I spoke on the House floor in favor of passage and voted for H.R. 3997, the Emergency Economic Stabilization Act, but unfortunately it failed to pass the House by a vote of 205 to 228.

In light of this failure, our economy still needs Congress to act.

It is possible this bill will be reintroduced and passed in its present form or slightly amended. In either case, I am determined to be part of the solution and not the problem.

Last night, I proposed an amendment to H.R. 3997 to increase Federal Deposit Insurance Corporation insurance to $300,000, but unfortunately no amendments were allowed by the Rules Committee when it reported out the bill this morning.

Statement on Emergency Economic Stabilization Act

Most of my constituents consider this a bail out. Some of them, in fact, are willing to walk bread lines in order to see wealthy Wall Street tycoons pay for their greed. The fact is, that would be irresponsible.

While this is not 1929 all over again, it could be if we step aside and let the wonders of the market work its will in this environment. We can’t let the foolishness and greed on Wall Street bring down Main Street; at least I don’t intend to.

We are witnessing the economy come to a grinding halt. Money is simply not being lent to individuals who need it. For businesses, this has meant an inability to borrow, to expand, invest in new equipment, stock shelves or even meet short-term cash needs, such as payroll. For individuals, it has threatened the assets of everyone who has an IRA or 401(k), college savings, pension plan or owns a home.

It has been difficult for me to hear so many members act like they were not responsible for this credit crisis when they had the opportunity to advocate reform, or at least support it, but chose not to.

We will have plenty of time to determine what went wrong and what individuals and institutions are responsible, but this is not the day or time to focus on who is at fault and what systemic changes need to be made.

I recognize today’s liquidity injection is a short-term solution to a long-term systemic problem. Those of us who return, and I make no assumption about my own election, have our work cut out for us in the next Congress.

I will vote for the Emergency Economic Stabilization Act and thank my colleagues in both chambers, and on both sides of the aisle, for their bipartisan efforts to avert a more serious economic crisis.

I believe the negotiators have worked in good faith, but we all have lingering questions. My own continue to be whether $700 billion is actually enough; why we are not increasing the FDIC deposit insurance above $100,000 so depositors don’t withdraw their funds; and why we are not addressing directly the capital markets problem like we did in the early 1980’s. I believe this legislation will address in the short-term the liquidity problem. And in the end, I believe tax payers, at a minimum, will be held harmless or even see a positive return on this expenditure.

If this bill passes and it puts liquidity in the market like we hope, we should be given the time we need to make some long-term changes.

I urge my colleagues to carefully weigh the effects of action or inaction and allow this solution not only to pass, but to work."