Thursday, October 2, 2008

A Letter to My Congresswoman

Written on Oct. 2, 2008 at 10:14 p.m.

Dear Congresswoman McCollum:

I find it amazing that you have already voted to increase our National Debt by $700 Billion, and the fact that you are even considering supporting an even bigger bill of $810 Billion is completely unthinkable.

It's bad enough that we pay nearly $500 Billion each year on the interest on our National Debt but you want to raise that to $600 Billion. How much Federal Spending is enough? I highly encourage you to vote NO on the Wall Street bailout package. It's time we have some financial responsibility back in Washington and New York. Main Street American's right here in St. Paul, your home district, cannot afford this.

In addition, I would like to know your reasoning behind the vote, and what you plan on doing to eliminate our national debt. Please put it in writing to me at:



Jeffrey S. Williams

Wednesday, October 1, 2008

Gingrich: We Need Action Now

From Former Speaker of the House Newt Gingrich in his email commentary today.

Replace Secretary Paulson and Suspend Mark to Market
by Newt Gingrich (more by this author)
Posted 10/01/2008 ET

Following Monday's failure of the Paulson plan in the House, it is imperative that our leaders not hesitate to bring stability to our financial markets.

We need action now.

The Paulson Plan - is dead. The time has come for Congress to turn its attention to a plan that does the right things the right way instead of trying to fix the wrong way of this monstrosity of a Wall Street bailout bill.

As I said to Fox News' Greta Van Susteren Monday night, and spoke about at the National Press Club on Tuesday, there are two steps that could be taken that would send a needed signal to the world financial markets that America has leaders who recognize the gravity of the crisis and are capable of putting aside narrow partisan self-interest for the good of the country.

Step One: Replace Secretary Paulson
A plan that relies on the former chairman of Goldman Sachs presiding over disbursing hundreds of billions of dollars to Wall Street is a terrible concept and inevitably will lead to crony capitalism and the appearance of - if not the actual existence of - corruption.

The American people understand this and they don't trust the Paulson plan. Congress should never have been faced with this as its only option to solve the financial crisis. Congress never should have been confronted with this bill. And one man, above all others, is responsible.

That man is Henry Paulson, who may have been a great deal maker for Goldman Sachs, but has been an utter failure during this economic crisis.

It's time - passed time, in fact - for President Bush to fire Secretary Paulson.

President Bush should replace Paulson immediately with someone more capable of forging a deal that the American people can trust. Secretary Paulson's Deputy at Treasury is Robert Kimmitt. He does not have the Wall Street background that made Secretary Paulson so difficult to trust as a negotiating partner and should be much more open to alternatives because he has less invested in the "Paulson" plan.

Kimmitt need not go through the actual confirmation process to immediately take over negotiating with Congress. The sooner Paulson is replaced as the chief negotiator for the administration, the sooner we will have a deal the American people can support.

Step Two: Suspend the Mark-to-Market Accounting Rule
The second thing our leaders should do immediately is simple and uncontroversial: Suspend the "mark-to-market" accounting rule that is exacerbating this crisis.

Under this artificial rule, the value of assets of banks moves up and down with economic conditions, regardless of their underlying worth. So in a time of economic crisis - such as the current subprime mortgage crisis - the value of bank assets gets caught in a downward spiral, causing investor panic and a drying up of credit.

In 2004, the European Central Bank issued this now eerily prescient opinion of the mark-to-market rule:

"With a real estate crisis or a stock market crash... [a bank] under [mark-to-market] accounting might aggravate the effects of the shock. Banks may be encouraged to react by panic selling and tightening lending standards, thus contributing to a further deepening of the crisis."

A Smart First Step
I've spent the past few days talking with businesspeople across the country - from Oklahoma, Georgia, Nevada and California - and they agree: this artificial accounting rule is needlessly making the financial crisis worse.

On Monday I appeared on Fox News' On the Record with Greta van Susteren and called for mark-to-market to be suspended.

I also wrote this op-ed yesterday for urging the same course of action.

I gave a speech at the National Press Club in which I discussed in depth the need to end this problem now. You can read the text and view it here.

Then, later that afternoon, the Securities and Exchange Commission took a smart first step by issuing a "clarification" giving companies more leeway in estimating the value of mortgage related investments. You can read more here. Securities and Exchange Commission Chairman Chris Cox deserves credit for recognizing how this accounting requirement is needlessly exacerbating our current financial difficulties.

The Bush Administration's Expensive Legacy
Taking these two steps - replacing Secretary Paulson and suspending the mark-to-market rule - are absolutely necessary right now to give Congress the breathing room to develop a plan to replace the Paulson Plan and to re-establish trust with the American people.

The Bush Administration has now provided three case studies that have badly damaged the cause of conservatism.

First there was former FEMA head Michael Brown during Hurricane Katrina, whose incompetence convinced Americans that Republicans can't be trusted with governing.

Then there was Ambassador Jerry Bremer in Baghdad, whose decisions as the head of the American occupation of Iraq convinced Americans that Republicans can't be trusted to manage foreign policy.

And now we have Secretary Paulson at the Treasury, whose intransigence during the worst financial crisis since the Great Depression has convinced Americans that Republicans can't be trusted with their money.

It's a tragic and very expensive legacy. No conservative and no Republican should doubt how much it has hurt our cause and our party.

Rebuilding Public Trust with a Work Out, Not a Bailout
As I told Greta Van Susteren Monday night on Fox News, the fundamental flaw in the Paulson Plan was that it was seen by the American people as a deal designed by and for Wall Street.

Congress needs to go back to the drawing board and develop, not just a financial markets rescue bill (which should be a work out, not a bailout) but also an economic growth bill.

This economic growth package should do two fundamental things:

First of all, it needs to provide relief for our financial markets that is based on lending troubled institutions the capital to restore our credit markets, rather than buying their bad assets. The taxpayers should be asked to extend these institutions a line of credit until they can get back on their feet, rather than blindly acquire these institutions' toxic paper. This is the essential difference between a workout and a bailout.

Second, the plan should stop the flow of $700 billion each year out of our economy and into the coffers of foreign dictators by achieving energy independence. Not only would our national security be improved, but this much new energy income would cause our economy to boom and government revenues to grow.

A Final Warning: Don't Allow the House Democrats to Move the Plan Left
A lot of people are scratching their heads over what would cause House Speaker Nancy Pelosi to deliver such a bitterly partisan speech minutes before the House voted down the Paulson Plan - a plan she purported to support.

I think it's likely that Speaker Pelosi deliberately delivered her highly partisan speech at the last minute to get precisely the result that she got - the defeat of the Paulson Plan. The danger now is that she and the liberal Democrats in the House will spend the next couple days re-loading the bill with all the leftwing pork projects that Senator McCain and the House Republicans were able to remove from it.

This danger makes it imperative that Republicans unify behind Minority Leader John Boehner in resisting moving any rescue plan to the left. The stakes are too high for the American people to allow liberal Democrats to use the current crisis to line the coffers of their special interest allies.

My Response to "Why Kline Voted Yes"

Here is my response to Janet Beihoffer, who is a great American and great conservative that I just happen to disagree with at this time. The person who forwarded this to me I wish to keep anonymous.


_______ forwarded me your email, and, as a fiscal conservative, I have to honestly disagree with your assessment.
Part of the problem our party is facing is the fact that we talk about offering free-market solutions to government problems. We, as fiscal conservatives, are against government intervention in the private sector. The market will correct itself if we just let it.
Does that mean that some businesses will go belly up? Yes. But new businesses will be created to fill the void. Does that mean that some people will lose their homes? Probably. But these are the people who shouldn't be renting their homes from a bank or mortgage company to begin with.
Look at the housing market, to begin with. I, personally, have a credit score of approximately 600 because of bad debts that I incurred (student loans). For any type of conventional mortgage, I do not qualify because my debt service subtracted from my income, does not leave me with enough to make mortgage payments at the high interest rates I "might" qualify for. Does that mean I should go and take a mortgage from Fannie Mae or Freddie Mac and expect to stay in my home when I could not afford the mortgage to begin with?
We fiscal conservatives stress the principle of "let the market decide." If the market decides that I am a poor risk to lend money to (like a mortgage), then they have every right to deny me financing.
The problem occurred when government mandated that certain income groups or people groups (minorities and first time buyers to name two of the groups) must comprise a certain percentage of mortgages underwritten.
Since these people should not have qualified for financing to begin with, and Wall Street firms (starting with the mortgage originators and moving up) bought the "safe" mortgage-backed securities, I do not think that the U.S. taxpayers, like me, need to be on the hook for someone elses problem. The Federal government is not bailing me out from my student loan debt, despite the fact I've had occasional bouts of underemployment or unemployment that have prohibited me from paying them back right away. Still, it is not the government's fault that I took the money for school. I incurred the obligation and therefore I am left with the debt. (By the way, for the record - I never asked the Federal government for a bailout and don't expect one either. Besides, should I have made the cop out of going through bankruptcy instead of doing the right thing and just paying down my debt, student loan debt is not dischargable through bankruptcy anyway).
Essentially what I am saying is this bill, regardless of the money for ACORN or other liberal special interest groups being stripped, was a bad deal because nobody wanted to assume responsibility for anything and put we taxpayers on the hook for the whole amount. It does not matter if smaller businesses are involved or not. Further governmental intervention will not solve the problem but only make matters worse. Government (Federal, State and Local) has to just step out of the way and let the markets work.
That is a core principle of being a Republican and that is the type of fiscal responsibility we fight for in our party's platform. Why change now? Just because President Bush and Treasury Secretary Paulson have gotten away from fiscal conservatism? Believe me, that's what's gotten our party in the sad state that it's at. That's why we lost the 2006 elections so bad and that's why it has taken so long to get the momentum rolling in our direction in 2008.
As our beloved 40th President, Ronald Wilson Reagan once remarked (and I paraphrase), "Government is not the solution to our problems. Government is the problem."

Best wishes!

Jeffrey S. Williams
House District 55A Co-chair
4th Congressional District Vice Chair

(I am sending this on my own accord and not "officially" on behalf of the BPOU or 4th Congressional District)

P.S. I have CC'd (names are being withheld) and am posting a copy of it on my blog, I hope you don't mind.

P.P.S. Just so you don't think I'm too critical, I do want you to know that I appreciate all that you have done and continue to do for our great party. This is just an area where we might have some vehement disagreement.

Why Kline voted Yes

Written by Janet Beihoffer, 2nd Congressional District (MN) Republican Party Chair.

My Congressman, John Kline, voted to support the solution to address our financial problems. I have read a ton on both sides and will be writing a blog post "An Everyman's Explanation of the MESS" ( and in an attempt to put in English what is really going on with this fiasco. There are three components: the mortgage industry; banks; and other. It's the "other" category that is driving the need for a solution. While the mortgage and banking topics have been in the press, what has not been explained in all the headlines, rhetoric, hype, etc. is this: there are 100's if not 1000s of companies who got into the financing business starting in the 1980's. These companies include manufacturers, insurance, brokerage, etc. - all outside of the banking industry. They are all loaning each other money for a plethora of reasons. All wanted to make their profit on loaning money. The "bailout" was not so much for the barons/bankers of Wall Street as it was for those other companies who provide jobs, pension plans, etc.

Whether or not you agree with this, it simply is.

Now for John Kline: he understood this. He also knows that the Democrats control Congress. He knows that Democrat Pelosi and company had no intention of including House Republicans in any solution - that is until Treasury Secretary Paulson called McCain back to help. McCain got the House involved; the original plan (Paulson, Dems, Paulson) included money that was going to be funneled to ACORN and other Democrat (non-profit???) support groups which in turn would be funneled back to Democrats. Once McCain and the Republican House got involved, all the perks/earmarks/subsidies were removed; golden parachutes were removed; some real oversite procedures were put in place. So Kline voted for the offered solution.

If you go here, you can read all of Kline's short post but this info is key:

“Today, members of Congress were asked to make a difficult decision. As it became increasingly clear that the financial crisis facing America was extending beyond Wall Street and threatening the jobs, homes, and retirement security of the men and women reporting for work on Main Streets throughout Minnesota and across America, we were asked to cast our vote for an imperfect, but important, solution. Unfortunately, this bill did not pass, and the crisis continues.

The result was imperfect, but it was a bipartisan solution that I believed was in the best interest of provided increased protection for the American taxpayer by instituting greater oversight and transparency. My Republican colleagues and I stood firm against the original, seriously flawed plan, as well as irresponsible provisions supported by my Democratic colleagues – including slush funds for left-leaning political organizations. We demanded that Wall Street finance its recovery through a federal insurance program. We also fought to ensure no golden parachutes would be available to corporate executives who made reckless decisions. But the bill failed, and we must, once again, return to negotiations." John Kline

Perfect, no; plausible,yes. Now the issue is whether or not there can be another plan that can keep the good stuff from this one as well as address outstanding issues that other Republicans want addressed. Unfortunately, our party is in the minority. The Democrats can pass any bill they want. You can bet the last dollar you have that they will include their friends in other bills. While Obama is fiddling, our economy is burning (up) and we need something. What? Phew, don't know but a stop gap measure needs to be put in place so we can regroup; then, have the government get out of the way. At least McCain is trying to do something - I know, we have our differences but...

Remember, most of the millionaires and billionaires are Democrats (Gates, Buffett, Oprah Winfrey, H'wood moguls, media barons, the Google and Yahoo mega millionaires as well as most of the mega millionaires, etc.). They won't miss the money but the rest of us will. Republicans are the party of the people. Too bad we do a lousy job of marketing that fact.

We are Americans; we solve problems when we have most of the facts.

Tuesday, September 30, 2008

AZ Rep. Shadegg Takes on Treasury Sec. Paulson

Ariz. Rep. John Shadegg Takes on Henry Paulson
Tuesday, September 30, 2008 11:37 AM

By: Jim Meyers

“The sky is not falling,” declares Rep. John Shadegg, and Congress will act to deal with the economic crisis without giving Treasury Secretary Henry Paulson a “blank check.”

The Arizona Republican writes in Monday’s USA Today: “Every Republican who voted against the Emergency Economic Stabilization Act on Monday believes that Congress must address this crisis. They take it seriously and stand ready to vote for reasonable legislation…

“Paulson’s $700 billion plan was fundamentally flawed. The bill asked for a blank check. It did not specify which assets could be purchased or the procedure by which they would be purchased…

“Secretary Paulson is getting a lesson in civics. The world he has entered is different than the wheeling-and-dealing Goldman Sachs world where he made his fortune.”

Shadegg called for the suspension of the “mark to market” accounting rule that requires mortgage-backed securities to be valued at “fire-sale prices.” That would help prevent the current crisis from reoccurring, but Shadegg said it is “incomprehensible” that Paulson and Congressional Democrats refused to include such a provision in the bill.

He also called for an increase in the Federal Deposit Insurance Corp.’s $100,000 limit on coverage to alleviate the concerns of millions of Americans, and said “it’s hard to imagine why anyone would oppose such a change.”

Rep. Shadegg, who was first elected in 1994 and has held a number of GOP leadership positions in the House, concluded: “We have ample time to reach an acceptable compromise if all parties act in good faith. The Democratic House majority can move to reconsider its bill if Speaker Nancy Pelosi will allow an amendment to improve it by making changes, including those I have outlined.

“This market can be solved in the very near future, and the market will come back.”

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