sanders on the bailout

Sanders Op-Ed: Why I voted against the bailout -- 10/04/2008

By Sen. Bernie Sanders, I-Vt.

The Bush administration and Wall Street bankers got what they wanted -- a $700 billion bailout with all the risk.

To me, it is grossly unfair that the middle class, whose standard of living is declining, is forced to pick up the tab for Wall Street's greed and irresponsibility, and not the top 1 percent who have benefited from Bush's reckless policies. While the middle class has declined under President Bush's failed economic policies, there has been a massive transfer of wealth from working families to the very rich. Incredibly, for the first seven years of Bush's tenure, the wealthiest 400 individuals in our country saw a $670 billion increase in their wealth. That is just 400 families.

That is why I proposed raising the tax rate on any individual earning $500,000 a year or more or any family earning $1 million a year or more by 10 percent. It would have raised $300 billion in the next five years, almost half the cost of the bailout. If what all the supporters of this legislation say is correct, that the government will get back some of its money when the market calms down and the government sells some of the assets it has purchased, then $300 billion would have been sufficient to make sure that 99.7 percent of taxpayers do not have to pay one nickel for this bailout.

Let me be clear: In the midst of the severe financial crisis facing our country, Congress had a duty to act, but this legislation does not accomplish what must be done.

This bill does not effectively address the issue of what the taxpayers of our country will actually own after they invest hundreds of billions of dollars in toxic assets.

This bill does not effectively address the issue of oversight because the oversight board members have all been hand-picked by the Bush administration.

This bill does not effectively deal with the crisis of foreclosures and addressing that very serious issue, which is impacting millions of low- and moderate-income Americans, in the aggressive way that we should be.

This bill does not effectively deal with the issue of executive compensation and golden parachutes. Under this bill, the CEOs and the Wall Street insiders will still, with a little bit of imagination, continue to make out like bandits.

This bill does not deal at all with how we got into this crisis in the first place and the need to undo the deregulatory fervor that created trillions of dollars in complicated and unregulated financial instruments such as credit default swaps and hedge funds.

This bill does not address the doctrine of "too big to fail." In fact, within the last several weeks we have sat idly by and watched gigantic financial institutions like the Bank of America swallow up other gigantic financial institutions like Countrywide and Merrill Lynch. Well, who is going to bail out the Bank of America if it begins to fail?

This bill does not deal with the absurdity of having the fox guarding the hen house. Maybe I'm the only person in America who thinks so, but I have a hard time understanding why we are giving $700 billion to the secretary of the Treasury, the former CEO of Goldman Sachs, who along with other financial institutions, actually got us into this problem.

This bill does not address the major economic crisis we face: growing unemployment, low wages, and the need to create millions of decent-paying jobs rebuilding our infrastructure and moving us to energy efficiency and sustainable energy.

Congress must act, but this bill was the wrong way to go.

This piece appeared in The Burlington Free Press.