As I said at the beginning of the year at our first Town Hall meeting, this is as economically murky a time as I’ve ever seen. Recent events and the concerns over the stability of the global financial markets have captured the world’s attention. The defeat of the proposed financial recovery plan by the U.S. House of Representatives on Monday has only added to the concern and confusion.
While the press has termed it a “bailout,” thereby implying it just aids a bunch of overly-rich Wall Streeters, the facts are it most aids the very people who should benefit … Main Street America. There are thousands of banks across America, not just the big banks getting the attention, and they are all connected in their dealings. Meaning if the big ones are having issues, those same issues exist in smaller ones, or will soon. As banks run into issues, they stop lending to everyone, small and large, the whole system slows down, and the recession risk deepens for everyone. It is an interconnected world.
It also has been incorrectly suggested that the $700 billion is just “given.” It is not. Existing mortgage loans are bought at market value, meaning what it’s worth today. For example, while a bank may have loaned $60,000, if that loan is worth only $42,000 today that is all they would get. When the government sells that same loan later, they would recover the $42,000 or hopefully more.
This may be more than you wanted to know, but this is a time when making your voice heard can really make a difference. This legislation is good for Main Street America. Credit markets need to be able to flow for people to go on with their lives … buying a house, buying a car, financing education … it is important to us all. Right now, credit markets are gripped by fear and our government is trying to take the actions needed to ensure a tough time doesn’t become an extended, extremely difficult time for people across America.
You can help by urging your members of Congress to enact this legislation that will restore confidence and bring stability to the financial markets. While the legislation that failed on Monday was imperfect (all legislation is), its swift passage would have been a big step toward restoring confidence in the financial markets and making credit more widely available across the country for everyone.
Both Houses of Congress will reconvene over the next two days, so it’s important to make your voice heard right away. Please call (202) 225-3121 and ask for your Congressional representative by name to express your concerns. Please ask them to find a path, work out the issues, and pass a bill to stabilize our markets.
Not all of you will agree, of course, and I do understand that. But I can also assure you that, as an American business leader, this legislation truly is important to the well-being of Main Street America.
Your immediate support is very much appreciated. Thank you.