House Refuses to Bailout Wall Street Predicted Financial 'Armageddon' Fails to Materialize

Press Release

Democratic challenger Bob Conley, running for South Carolina's U.S. Senate seat, is strongly opposed to the bailout of Wall Street at the expense of Main Street. "The refusal by the U.S. House of Representatives to spend $700 Billion taxpayer dollars to infuse financial markets with new capital is a big win for the Middle Class," said Conley. "It also shatters the assertion by ‘smart money' luminaries that a quick bailout scheme is essential to avoid an economic Armageddon," Conley said.

"The fact is that Wall Street is already in self-correction mode without the aid of taxpayer dollars," said Conley. He cites JP Morgan's acquisition of the failed S&L Washington Mutual, the nation's largest, and Citigroup's acquisition of ailing Wachovia, the nation's fourth largest bank. Early this year, Bank of America acquired struggling Countrywide Financial Corp., then the nation's largest mortgage lender, and more recently acquired Merrill Lynch as it was faltering. The assets of global investment banker Lehman Brothers are being sold off to healthier firms. "None of these transactions involved plundering the U.S. Treasury," said Conley.

"The prediction of Lindsey Graham and others on Capitol Hill that our economy would essentially collapse without a massive taxpayer bailout of Wall Street also proved to be nonsense," said Conley. "The Dow Jones, representing only 30 companies, fell 777 points yesterday," noted Conley. "That's only the 17th largest one day percentage decline ever registered -- hardly an economic Armageddon."

"The problem with the bailout legislation under consideration by the House was that it did not address the underlying causes of the excesses on Wall Street," said Conley. "The Glass-Steagall Act was signed into law in 1933 for good reason. The current situation on Wall Street is that reason, yet Lindsey Graham and others on Capitol Hill chose to ignore this lesson of history when they repealed Glass-Steagall in 1999," Conley said.

"The continuing credit shortage is part of this natural market correction," Conley said. "The days of fast, easy money -- which caused this problem -- are gone. Adjusting to this new era of normalcy will serve all of us well."

"Those who engineered our economic crisis, including Lindsey Graham, have been proven wrong all along, yet portray themselves as worthy of another term in office," said Conley. "South Carolinians should be absolutely livid at the prospect of Lindsey Graham in the U.S. Senate for another six years."

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