Congressional candidates at forum talk about Wall Street meltdown
Syracuse Post-Standard
Mike McAndrew
September 18th, 2008
About 70 people from congregations across Onondaga County today heard the three 25th Congressional District candidates talk about the crisis in the nation's financial markets at a forum at a Syracuse church.
The forum at Hopps Memorial Christian Methodist Episcopal Church was sponsored by the Alliance of Communities Transforming Syracuse (ACTS), an alliance of more than 20 faith communities and community groups. The audience included members of Christian, Jewish and Muslim congregations from the inner city and the suburbs.
Republican Dale Sweetland, Democrat Dan Maffei and Green Populist Party candidate Howie Hawkins were each given five minutes to answer a question about the crisis in the financial sector, which this week saw Wall Street bank Lehman Brothers spiral into bankruptcy and Congress agree to bail out AIG, one of the world's largest insurance companies, with an $85 billion loan.
The question posed was: "What do you believe are the causes of the current crisis and what role should the federal government should play in regulating and stabilizing the national economy?"
Here are excerpts from their answers:
Sweetland:
"I believe that the cause of all this turmoil is the overexuberance of Congress and presidents over the last 20 years to say let's turn Fannie Mae and Freddie Mac loose and let them buy mortgages that all the banks and subprime lenders were able to sell and loan. So that greed overtook those banks and those financial institutions. They said look at this, Freddie Mac and Fannie Mae will buy those mortgages so they're not risky at all for us. That drove the housing market and housing costs up. In order to enable people to own homes, they had to loan more and more money and more money. They loaned money to a lot of people who couldn't afford to pay them back. So Fannie Mae and Freddie Mac then needed to be bailed out because they got in trouble. Fannie Mae and Freddie Mac are a public-private partnership. And the public entity failed in its oversight in both those institutions. Now, the bailout of Freddie Mac and Fannie Mae, they bailed them out. But they aren't doing anything to reform those two institutions.
"I read on my television screen, that in return for $85 billion, the federal governent will own 79.9 percent of AIG. I wonder who on the behalf of taxpayers will be sitting on the board of directors to help manage AIG to help get our $85 billion back.
"We need to all ask who's next? Who's next? Because once you go down this road, many more will come. It is pure greed that I see in the financial markets."
Maffei:
"For the last eight years, our economic policies have been completely out of whack with the priorities it should have. We should be focusing our economic and financial policies on helping working families and small businesses. Instead we have been helping very, very wealthy people and large multinational businesses. With the bailout, in some ways we are doing that again. But part of the reason why they have these bailouts is a lot of working families would be hurt if we didn't do the Fannie Mae, Freddie Mac bailouts. I'm not sure if it's the right solution. In fact, I'm quite skeptical of it. But I know that was part of the reason, the motivation. "We've got to have a government that stands up for regular citizens."
Hawkins:
"As for the financial crisis, I think the root cause of that is about 35 years of tax cuts for the wealthy and corporations, and deregulation. There's been excess capacity in most industries since about 1970. So what they decided is supply-side trickle-down economics is the way to get the economy going. But because there weren't many profitable outlets in the real economy, they speculated. They did mergers and acquisitions. They extended this credit card thing so the whole working class is higher in debt than it's ever been. The subprime mortgage scams. They build up these assets, most recently commodities specuation, and they let people who had the money to invest do this without regulation. The assets were overinflated and now the whole thing came crashing down.
"What we've got to do is restore the New Deal regulations. They were there for a reason. The separation between savings, commercial banking and investment banking. I think its crazy to have over the weekend Bank of American buy Lehman Brothers. They have no idea what's on Lehman Brothers' books. It's very risky."
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