Don't Bailout the Rich at Everyone's Expense

This is a letter I wrote today to my Congresswoman and Senators:

I’m writing to ask that you make sure that the bailout of the banking industry doesn’t become one more opportunity for the rich to become richer off the backs of the rest of us. I understand the reasons that so many have supported this bailout; I worked as support staff at Lehman Brothers during the last days of that firm and know personally that its bankruptcy hurt many more people than just those at the top who continued to squander money on perks and bad investments as the market crumbled. Yet so much that I read in the news suggests that these bailout proposals are more giveaways to hedge funds rather than smart investments designed to create a stronger, well-regulated banking system. I’m asking that you be the person to stand up for everyday Americans and make sure we aren’t ripped off by the same rich and powerful people who caused this crisis.

I have to admit, I don’t fully understand what’s going on with the bailout. While I learned some things about derivatives, mortgage-backed securities and other “novel” financial vehicles while working for Lehman, it really takes a PhD to fully grasp exactly what’s going on. But what I’m hearing from the media is troubling. I keep hearing about a plan for the government to buy up “toxic assets,” sell them at a song to hedge funds and issue guarantees against 90% of potential losses. So hedge funds and their already rich investors will reap all the potential benefits while we’ll be on the hook for almost all of the potential losses. That sounds like a serious giveaway to the rich to me.

I’m asking you to demand something in return for our money. Nationalize these banks. Get huge amounts of stock for a song. Take over failing institutions and kick the greedy idiots out. They are the ones who created this mess with their greed and short-sighted “make a buck and screw the rest” attitude. Now that they’re coming to us with hat and hand, I see no reason to show them mercy. If they want our money, they need to give us something valuable in return.

I’m also concerned about what I’m not hearing about. No news about any sweeping new regulation of the industry. No news about major reforms in how these firms do business. No demands that hedge funds and other businesses that mucked the system up now be transparent and above board. That’s really troubling. What a national tragedy it would be if we put ourselves and our children into massive debt to save our financial system, only to leave future generations a system just as screwed up as before.

This is what I’m asking: if we’re going to cripple our ability and our children’s ability to finance things like education, infrastructure, health care and national security by going into even more massive debt to save the banking industry, we need to get as much benefit out of it as we can and the rich and powerful need to pay for that. Please, be the person in Congress to make sure that happens. I promise that the people will rally around you in gratitude if you do.