Letter to Senators Elizabeth Dole and Richard Burr (R-NC) regarding the Emergency Economic Stabilization Act

Written by: Jim Neal on Oct 1, 2008 4:52 PM EDT

October 1, 2008

The Honorable Elizabeth Dole
The Honorable Richard Burr
United States Senate Washington, DC 20510

Dear Senators Dole and Burr,

I write you as a constituent and as head of a non-profit organization which brings a voice to those marginalized folks in North Carolina most in need of a government responsive to their plight. I urge you to vote no on the Emergency Economic Stabilization Act of 2008 tonight.

The Act fails to provide adequate protection to taxpayers and homeowners. The Act privatizes the losses of shareholder-owned financial institutions, and grants extraordinary powers to the executive branch to expend taxpayer funds in a capricious fashion without meaningful Congressional oversight.  Abandoning mark-to-market financial accounting regulations renders financial statements of reporting companies as a sham. The Act does not target assistance to those across our state most in need in these perilous times.

A yes vote on the Emergency Economic Stabilization Act of 2008 will have dubious effect on the health of North Carolina’s economy. Premised on the fear that “action is better than no action” ignores probable attendant affects of the Act, such as devaluation of the dollar, stagflation, signaling private sector participants that the American taxpayer will bail out bad behavior, and encouraging the bailout of other industry sectors under stress.  Moreover, the abrogation of Congressional oversight in the Act denigrates the doctrine of checks and balances intended to curb abuses of power by one of the three branches of our Federal government. Congress’ recent record of ceding authority to the executive branch, most notably in its Authorization for Use of Military Force Against Iraq Resolution of 2002, has had adverse consequence for our nation. The power entrusted to the Treasury Department is unprecedented and the oversight provisions of the Act rely on hindsight.

I am a former investment banker who advised public and private financial institutions during my tenure with Goldman Sachs, Salomon Brothers Inc and Bear Stearns. I’m acquainted with the executive managements of many of the public financial institutions party to the ongoing purge by the market of failed businesses; I was a colleague with investment bankers currently advising Secretary Paulson.Though an honorable public servant, Secretary Paulson did place nearly $800 million of common stock which he owned in Goldman Sachs into a blind trust attendant to his confirmation two years ago.The Act gives rise to similar conflicts of interest.

The concerted bailout efforts thus far have succeeded in protecting the interest of shareholders first. I ask that you stand up for your stakeholders: the people whom you represent in North Carolina.

Sincerely yours,

Jim Neal

Tags:
Location: Chapel Hill, NC 27514