I had written letters to my two florida Senators, Mel Martinez and Bill Nelson, as well as my representative Adam Putnam, regarding my opposition to any use of taxpayer money to bail out either Wall Street financiers or distressed homeowners in an (futile) attempt to prevent further economic corrections to occur in the financial markets. I received a response from Senator Martinez, with an attachment containing his remarks to the floor during the congressional hearings on the bailout proposal. I am posting my correspondence with the Senator below. By scrolling down, you will see the communication back and forth, with my original e-mail to him at the bottom. I am awaiting replies from Senator Bill Nelson and Rep. Adam Putnam.
E-mail of 9/25/08 from Tom Mullen to Senator Martinez
Dear Senator Martinez,
I am in receipt of your reply via e-mail to my correspondence of September 23, 2008. I appreciate you taking the time to address my concerns, but again I am not satisfied with the answers that you have given me. Your letter states that you are “working hard to ensure that your tax dollars will not be wasted on any plan that rewards irresponsible or illegal activities by investment bankers on Wall Street.”
Whether or not the irresponsible are rewarded or punished is irrelevant.
Your comments during the Congressional hearing include,
“Congress should consider limiting executive compensation in any package we discuss…Congress will have to engage in active oversight of Treasury as they implement whatever plan we approve. So there should be no blank check. There will be no blank check.”
Senator, I have to assume that you are deliberately trying to obfuscate the issue, or that you have a pitiable lack of understanding about the principles that our country was founded upon. Our Declaration of Independence states that each person is “endowed by their Creator with certain unalienable rights.” These are INDIVIDUAL RIGHTS. They are not subject to revocation by government, not even by majority vote. That is why our founders gave us a constitutional republic, instead of a democracy.
The most important of these rights, Senator, are property rights – the right to the fruit of one’s labor. In the words of Thomas Jefferson,
“To take from one because it is thought that his own industry and that of his father's has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association--'the guarantee to every one of a free exercise of his industry and the fruits acquired by it.”
As should be quite obvious to you, Jefferson’s words apply directly to the situation before us today. It is not a matter that there be “no blank check.” There should be NO CHECK WHATSOEVER. This is not a question of what is “best for the economy.” The crux of the matter is that THE FEDERAL GOVERNMENT DOES NOT HAVE THE RIGHT to forcibly take money from me and use it to buy up a financial institution’s bad debt, or to provide assistance to a distressed borrower. The federal government does not have the right to seize my property, even if it believes doing so will be better for the majority of its citizens (which this bailout won’t be anyway).
Therefore, Senator, I have one question that I request a direct answer to. Do you recognize my UNALIENABLE right to the fruits of my labor, or do you believe that your elected status allows you to revoke this right? I will await your response.
E-mail of 9/25/08 from Senator Martinez to Tom Mullen
Dear Mr. Mullen:
Thank you for contacting me regarding the financial crisis facing our country. I appreciate you contacting me regarding this important issue.
I have heard from thousands of Floridians in recent days who are worried about this financial crisis and are concerned about the actions that Congress and the Administration may take in addressing it. I believe that our country is facing a very serious situation, and I share many Floridians’ concerns about the economic consequences to our country if we fail to act appropriately. We need to enact legislation that enables our economy to continue functioning while imposing new regulations and safeguards to ensure that this situation never occurs again.
The exact form that this legislation will take is not yet decided, but I assure you that I am working hard to ensure that your tax dollars will not be wasted on any plan that rewards irresponsible or illegal activities by investment bankers on Wall Street. There must be accountability in any plan approved, and those who have given rise to this crisis need to be investigated and prosecuted to the full extent of the law for any wrong-doing that occurred.
I am enclosing a copy of remarks I made on the floor of the Senate regarding the current crisis and its origins in the housing market. I believe that this problem is far too complex and serious to be handled in the same ultra-partisan fashion that has unfortunately characterized much of the 110th Congress. I assure you that I am committed to working with all of my colleagues to address this crisis and enact meaningful reforms to protect homeowners and ensure the long-term economic prosperity of our country.
Again, thank you for contacting me regarding this important issue. If I may be of assistance to you in the future, please do not hesitate to contact me.
United States Senator
Financial Rescue Plan
Speech to the U.S. Senate
U.S. Senator Mel Martinez
Wednesday, September 24, 2008
This Congress is about to consider the most important legislation affecting our financial markets – certainly for a generation – possibly in our country’s history.
The American people must understand exactly what is at stake as we begin consideration.
What has happened is that the credit markets have quit functioning. Credit cards, car loans, home equity loans, home mortgages, business loans.
Business loans to keep large and small businesses operating have ceased to exist. The financial markets are not functioning putting in jeopardy our entire economy.
Without timely government intervention, the financial system as we know it will no longer exist.
This isn’t a Wall Street versus Main Street argument. This is about every American’s ability to pursue his or her American Dream. Without liquidity in the marketplace, financial transactions come to a halt – and that will create a complete collapse of the financial system.
So the need to act has become clear. Treasury Secretary Paulson has asked for the authority to purchase illiquid assets from financial institutions in an attempt to get the markets functioning again.
But with that authority, comes great responsibility and Congress has an obligation to the US taxpayer to ensure that any program is crafted and carried out with appropriate oversight.
Congress should consider limiting executive compensation in any package we discuss.
Congress will have to engage in active oversight of Treasury as they implement whatever plan we approve. So there should be no blank check. There will be no blank check.
Let me also mention I am pleased to learn of ongoing investigations into the activities of Fannie Mae, Freddie Mac, AIG, and Lehman Brothers. This is the worst financial crisis that our country has encountered in recent history and we owe it to taxpayers to get to the bottom of any wrong doing that occurred.
We need to prosecute any inappropriate behavior on the part of these companies to the fullest extent of the law. If we are going to have to fix this problem, those that created need to be held accountable.
After the dust clears, Congress cannot lose sight of one of the main reasons why we are so heavily encumbered by this crisis – why our financial system is so deeply troubled at this moment in time.
Fannie Mae and Freddie Mac were huge contributors to the problem because of their thin capitalization, ever-expanding portfolios and risky practices.
They fueled and funneled the risky securities that Wall Street bought and sold and made lots of money while ignoring the systemic risk their moves posed to the financial system.
In 2003, when I was HUD secretary, I came before this Congress with Treasury Secretary Snow and warned of the loose regulation of the GSEs and the risk posed by their undercapitalization.
We asked Congress to create a world class regulator to properly provide oversight to these financial entities that had become so large that they had an implied government guarantee and they were deemed too big to fail.
In 2005, Federal Reserve Chairman Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie, “…continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road.”
We are now at the end of that road.
As we go forward, not only will Congress have to determine the future role of these entities, we need to take a very close look at the practices that brought us to this place.
Throughout all of this work, we cannot lose sight of the root cause of this financial debacle – the housing crisis.
Floridians are among the hardest hit in the nation.
Housing prices continue to fall; inventories continue to rise; and a growing number of homeowners are facing their own personal foreclosure crisis.
To find the bottom of the housing crisis, to stabilize prices, we need to act. Congress can approve home buying incentives. Congress can approve a tax credit for down payments. That would at least encourage people to enter the marketplace, would reduce housing inventories, and get the money flowing back into the market.
As Congress debates this package, let’s remember who we work for – the American taxpayer. Our priority should be making decisions that serve their best interest. No blank check. Strict oversight. Accountability. Taxpayer recourse.
It is in every American’s best interest that we act. I look forward to creating the right legislation that averts a financial crisis that will affect every American – a financial crisis perhaps bigger than the Great Depression.
It is a time for responsible leadership. It is not a time for an easy out or a pulpit for populist rhetoric. We need to rise to this moment – for the good of our country.
E-mail of 9/23/08 from Tom Mullen to Senator Martinez
Dear Senator Martinez,
I am writing to urge you to vote against the proposed "bail out" of lenders and borrowers proposed by Sec. Paulson and Chairman Bernanke. Again I find that my property is under attack by the very government that I pay to protect it. There is no moral or practical justification for passing this bill. Economically, it will only serve to postpone the inevitable adjustment in home prices and deleveraging of malinvestment that accompanies all inflationary bubbles.
More importantly, it amounts to armed theft of my property, a crime you are sworn to protect me against, not perpetrate. I have written in the past opposing the seizure of my property for the purposes of redistribution to someone else, and have been frustrated. You have one more chance to earn my consideration of a vote in your next election. Please do not let me down.
Senator Bill Nelson of Florida
Senator Mel Martinez of Florida
Representative Adam Putnam of Florida, 12th District