DeFazio unveils a non taxpayer-as-sucker fix to credit crisis instead of a bail out

The fundamental problem with forcing you and I and every other American to risk $2300 of each our taxes to buy stupid loans from investment banks that -- if they were so smart, the Wall Street wizards never would have bought in the first place -- is that we are being taken for suckers.

We pay for the bad investments: socialism for financial losses. Instead, they should pay for it.

And we should fix the credit crisis by fixing the credit crisis, not by buying off the stupid investments that Wall Street made.

There are lots of better ways to fix the credit crisis. Representative Peter DeFazio of Oregon has introduced a low-cost NO BAILOUTS Act (people like acronyms in DC).

Here is the text from his Dear Colleague letter to other Members of Congress. They should each dump the Bush Administration proposal to buy bad investments (as if we should trust them not to let the taxpayer get ripped off by the investment banks!) and instead focus on fixing the credit crisis:

The Paulson Premise Flawed
Simon Johnson, a former chief
economist as the International Monetary Fund, stated today in the New York Times
of Paulson’s plan, “It’s our view that this package, in a fundamental sense,
will not solve the problem.” Other economic analysts noted yesterday that
the credit markets around the world were almost entirely dysfunctional even when
political leaders and investors assumed that Congress had reached a deal and
would easily approve the bailout. There is no reason to believe Paulson’s
plan will work.


Alternatives
We have
credible alternatives to the Paulson/Bush $700 billion gamble. William
Isaac, the chairman of the FDIC during the previous worst financial crisis in
the United States during the 1980s, believes Congress can address the current
crisis with simple changes to Securities and Exchange Commission (SEC)
rules. Mr. Isaac points out that while we face serious financial
challenges today, many banks are still in good shape. This allows Congress
to take swift, uncomplicated steps to ensure the financial markets return to
working order. After that, we can work to resolve the housing crisis and pass
effective job stimulus.
Today I am offering an alternative to the
Wall Street bailout that will correct the capital shortfalls experienced by many
financial institutions and help protect the integrity and quality of the
securities market. My plan could be implemented promptly meeting the
demands of the Bush Administration to act immediately without putting the
American taxpayer on the hook for billions of dollars.

I really hope Congress doesn't get rolled by the Bush Administration .... again.