Today, ALG President Bill Wilson urged the U.S. Senate to block debate on the Dodd financial takeover bill, and to start over with new legislation to address what it called "the root, government causes of the crisis."
In Wilson's letter to Senators, he wrote, "The American people will be more than livid with Senators that adopt an approach that expands government powers when the essential cause of the financial crisis was a government that was (and remains) unaccountable to the risks it was (and is) taking."
Wilson laid blame for the financial crisis at the feet of government-run Fannie Mae, Freddie Mac, the Department of Housing and Urban Development, the Federal Housing Administration, and the Federal Reserve, which according to the letter weakened lending standards, underwrote risky mortgages, and created an unprecedented expansion in lending through artificially low interest rates.
Instead, Wilson wrote, the Dodd bill "in addition to creating a $50 billion revolving 'orderly liquidation fund,' will codify an unlimited bailout-takeover authority. This federal authority will endanger companies across the nation with unlimited government takeovers of their assets, operations, and ownership. No investment would be safe, and once seized, a company's shareholders would have no recourse in federal courts, even if the takeover was unwarranted."
According to an Americans for Limited Government summary of the legislation, there would be no limit on how much money could flow through the 'orderly liquidation fund' in total, nor would it require any Congressional authorization for firms to be seized, the funds to be spent, or new assessments to be levied by the FDIC to replenish the fund.
Wrote Wilson in his letter, "This will create moral hazard of the first order, and institutionalize 'too big to fail' for all time."
The bill would also shield from judicial review any government seizure of a company: "no court shall have jurisdiction over… any claim or action for payment from, or any action seeking a determination of rights with respect to, the assets of any covered financial company for which the Corporation has been appointed receiver."
Wilson wrote that this particular provision raised "serious Fifth Amendment due process property rights concerns" saying that any company could be seized under the broad provisions of the bill and would have no recourse in federal court.
Wilson wrote that the only solution was for Senators to "vote against proceeding to the current bill, and to demand a completely new bill that actually addresses the root, government causes of the crisis. In this instance, there is much to be said for starting over and getting it done right."
Let's keep the pressure on! Tonight, Harry Reid is forcing the Senate to vote to proceed to this bill. Using Capwiz, you can click here to get your Senators' office numbers to call, and here to send an email message to them. Let's make it real simple and tell the Senate:
This bill does not address the root, government causes of the crisis.
Would give the government unlimited power to seize companies, raise taxes, and spend funds without any Congressional approval.
Leave investors and shareholders with no legal recourse in federal court should their investments be seized by the government.
The only hope the American people have to defeat this complete financial takeover is for Senate Republicans to filibuster it. Any short of that will lead the nation down a rabbit hole of endless takeovers, bailouts, taxes and spending.
In today's Liberty Action Report, Barack Obama has a lot in common with Philip Dru, Administrator, the Obama agenda is being pushed rapidly, and is Ron Paul setting the stage for 2012 presidential run? Plus, the Wall Street Journal points out the true "systemic" risk in Europe is the moral hazard created bailing out Greece and other debtor nations.
Please send your letters to the editor to Robert@getliberty.org. We publish all points of view!
Keep fighting, folks!
For Liberty,
Robert Romano
Senior Editor of ALG News
www.getliberty.org
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