Miller-Meeks: Congress Must Set Aside Politics, Address Root Causes Of Financial Crisis
Congress must address the root cause of the financial sector's crisis to prevent Wall Street's problems from spreading even farther and creating additional damage to the broader economy, GOP congressional candidate Mariannette Miller-Meeks said today.
"The $700-billion bailout that Congress defeated Monday was not the answer. But, doing nothing is not appropriate, either, and will have severe repercussions to our economy," Miller-Meeks said. "We need to quickly stabilize the financial system with the least cost to the taxpayers. If we fail to quickly get the credit market flowing, Main Street jobs will be at risk and businesses will not be able to purchase equipment, supplies, expand or even continue in business,. Now is not the time for nitpicking and political bickering. Now is the time for action - smart, courageous action."
She said Congress should remove language from Community Reinvestment Act that encouraged excessive risk-taking by Fannie Mae and Freddie Mac and authorized the development of bundled mortgage debt obligations creating this morass and passing the risk onto others. Miller-Meeks advocates temporarily suspending mark-to-market accounting so that banks can stabilize their accounts instead of writing down good loans that will be repaid in full.
"Home owners who are dutifully paying their mortgages on their primary home and have been honest in their application, should be protected with new mortgage product or stabilization of the housing prices. We should penalize those responsible for the losses and keep current executives in place without golden parachutes. Unfortunately, those who benefited most are already gone from those institutions," she said. "Ultimately, we have to be leaders and quickly stabilize the financial system and economy with the knowledge that taxpayers will benefit with a well-crafted plan."
Miller-Meeks said the federal government does have an appropriate role in the crisis, including purchasing some institutions and securities at fair market value and selling them at fair market value to the benefit of taxpayers. She believes all proceeds from the eventual sale of such assets should pay down the national debt or provide a tax dividend to taxpayers.
Miller-Meeks said she would have sided with the three Iowa congressmen who voted against the bill. Rep. David Loebsack, Miller-Meeks' opponent, voted for the bailout. "Steve King is absolutely right when he says doing 'something' is not enough; we have to do the right thing. That means we need to approve a plan so that Wall Street won't expect a bailout every time they make the wrong decisions," she said. "To paraphrase Martin Luther King, Jr., we can't afford socialism for the rich and raw capitalism for the rest of us. Unfortunately, David Loebsack doesn't seem to understand that or the real-world challenges facing the people he's supposed to represent."
Miller-Meeks favors allowing the Federal Deposit Insurance Corporation to ease capital requirement for banks so they can ride out the current credit crunch. She also believes the Securities and Exchange Commission should modify fair value accounting so assets aren't considered worthless during a market panic and instead can be valued on the basis of their true economic value. She also favors development of a plan to let private investors fund the bailout through guaranteed recovery bonds or to set up insurance programs to ensure Wall Street bankrolls its own recovery.
"Frankly, we also have to make sure we don't have a repeat of the Clinton administration's social experimentation that forces banks to loan to people who cannot afford to pay it back. That government-knows-best, borrow-to-day-and-maybe-pay-it-back-someday mentality contributed to our current financial crisis, too, and we can't afford to let it continue," Miller-Meeks said. "One way to stop it is to replace our current congressman with someone who will be responsible and accountable to the people of this district."