In my previous no bailout post, I encouraged you to call your representatives. One of my senators, Dianne Feinstein, sent me a response this afternoon that contained a statement she made on the Senate floor yesterday. She said:
My constituents by the thousands have made their views clear. I believe they are responding to the original 3-page proposal by the Secretary of the Treasury.
Let me be clear, Senator Feinstein. I do oppose Secretary Paulson’s 3-page proposal. But I also oppose any any other taxpayer funded rescue plan. You are misrepresenting your constituents and trying to use us as political capital for furthering your agenda for the rescue plan.
In her statement, Senator Feinstein also said:
Hurricane Ike shut down refineries on the gulf coast 2 weeks ago, and now, today, people are waiting hours in lines for gasoline in the South. Similarly, the collapse of the financial sector would have severe consequences for Americans all across the economic spectrum: for the person who owns the grocery store, the laundry, the bank, the insurance company. Then, if the worst happens, layoffs. And even more than that, somebody shows up for work and finds their business has closed because the owner of that business can’t get credit to buy the goods he hopes to sell that week or that month.
This is classic FUD. It also appears Senator Feinstein doesn’t know how businesses work. The kind of credit you use to purchase goods does not require financial institutions. It is called Net 30 (or some variation) and there is no bank or financial institution involved. It works like this: Suppose you sell computers. You have a Net 30 agreement with the computer manufacturer which allows you to get the computers for 30 days before you have to pay for them. This gives you a chance to sell them before your bill is due.
That Senator Feinstein is married to investment banker Richard C. Blum gives me additional concern that she is seeing this crisis from an investment banker’s point of view – a point of view that sees the current financial mess as such an important problem that it will affect everyone.
So let me be clear, Senator. Do not go through with any financial rescue package. Do not buy or insure “toxic loans” or other difficult to value securities. Do not invest taxpayer dollars in failing businesses (or any other businesses for that matter). Do not provide lines of credit to high risk institutions (or any institutions for that matter).
Reader, I encourage you again to call all your representatives and let them know you oppose any financial rescue plan. It’s time to keep the pressure on.