Senator Christopher J. Dodd
448 Russell Building
Washington, DC 20510
FAX (202) 224-1083
Dear Senator Dodd,
My name is Jim White and I am writing you from Gainesville, Florida. I was the commenter on Glenn Greenwald’s blog at Salon.com who first suggested last year that we work to find someone in the Senate to place a hold on retroactive immunity for the telecommunications companies. Although we did not win that battle, I want to express my sincere gratitude for your very hard work on behalf of our Constitution and on behalf of the citizens of the United States.
I am writing today to urge caution with regard to the Wall Street bail-out legislation being proposed this weekend by the Bush Administration. As we have learned from Naomi Klein’s well documented research in The Shock Doctrine, it is in times such as the currently ongoing crisis when significant damage can be done to the rights and the interests of the common citizen. Please examine the proposed legislation closely with regard to whether it decreases regulatory oversight of the markets and whether it enables a massive transfer of public wealth to private parties. Experience teaches us that those are the goals of many of those who likely have crafted this legislation, and yet, those goals also lie at the root cause of the current crisis.
Rather than merely creating a government agency to act as a virtual “toxic waste dump” for the bad debt many firms have accumulated, Ian Welsh at Firedoglake yesterday suggested that the efforts instead should center on the government entity buying individual mortgages, re-valuing the homes and then writing new, fixed mortgages at low rates. Such a program could place strict limits on subsequent refinancing and could allow government participation in profits when the home is sold later.
At the very least, if massive off-loading of debt from troubled companies is going to occur, my plea is that provisions are included in the legislation to insure that the highest levels of management in these troubled companies suffer economic losses at least as severe as those suffered by stockholders in those companies. If management in these companies is allowed to emerge from the crisis with their massive wealth unscathed, then our country truly will have entered a perverted form of socialism in which we have privatized the profit and socialized the risk of the highest levels of our economic activity. Economic losses for these upper level managers need to be personal, direct and significant. Of special importance is that the personal assets these managers have sent overseas need to be subject to these fines. The unifying theme I have seen expressed for this idea is “Seize ill-gotten gains”. If this is not a part of the overall program enacted, I fear massive civil unrest coupled with even more massive repression. The history and the warnings in Klein’s book should be heeded on this point.
If at all possible, I urge your committee to seek input from Naomi Klein. Her interview on BBC recorded on Thursday of this week provides evidence of the value of her interpretation of current events and what should be done. She would be able to point out the flaws in proposals that would tend toward exacerbating rather than relieving the crisis. Similarly, input from Joseph Stiglitz and Paul Krugman could provide counter-arguments to those who insist that the only solutions are centered on unregulated free markets and privatization of government functions.
As you so elegantly stated in the battle over retroactive immunity, our Constitution is a vital document whose genius lies in part in the system of checks and balances. Many of the problems our country now faces come from the loss of this function. The Wall Street crisis could serve as the opportunity finally to start turning our country back toward those principles on which it was founded. The Congress does not need merely to accept whatever legislation the Bush Administration crafts and to implement it without examination. Please take the lead in assuring that the legislation put forward will be based on Constitutional principles and that it will protect the rights and interests of all citizens, not just the wealth of large corporations.
Thank you for your continuing dedicated and distinguished service to our country.