Senate candidate Al Franken is taking a stand on the nationwide bailout of tumbling investment banks. We're not quite sure what a candidate not in public office can really do or say about it, but it's worth a try. We love more hearings and meetings, don't we? Shortly after releasing his statements, Sen. Norm Coleman took a similar stance.
Franken is echoing a New York Times editorial today that called for hearings to ensure the bailout funds are used to open up lending.
According to the NYTimes editorial:
Many of the recipients of this investment from taxpayers are not all that interested in making loans. And it appears that Mr. Paulson is not so bothered by their reluctance.
Mr. Paulson and the bailout recipients have some explaining to do. Congress should plan hearings as soon as possible — and take action to set a clear strategy.
In his column on Saturday, The Times’s Joe Nocera told about a conference call that he had listened in on recently between employees and executives of JPMorgan Chase. Asked how an infusion of $25 billion of bailout funds would change the bank’s lending policy, an executive said the money would be used to buy other banks.
“I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way,” the executive said. He added that the money could also be used as a backstop in case “recession turns into depression or what happens in the future.”
The problem is that the Treasury has refused to put conditions on the banks’ use of the bailout funds, allowing them, in effect, to make purchases of banks that are not on the verge of failure. That could help to maximize the banks’ profits — a worthy goal when the capital they are using is from private investors.
Here is what Franken had to say:
"Washington sprung into immediate action when Wall Street was in trouble, but there's been no help for struggling homeowners on Main Street and no solutions for middle-class families and small businesses hurt by the failed economic policies of the last eight years. And now we find that the $700 billion bailout is being used not to solve the problem, but to handpick winners and losers on Wall Street. That's an outrage.
Taxpayer dollars should be helping taxpayers, not going to pad the bottom lines of the Wall Street bankers whose bad bets got us into this mess. This is exactly why we should never have passed this bill without proper accountability. And it's time for Congress to take action."
Here is what Sen. Norm Coleman said shortly after Franken's statements:
Coleman says Treasury Secretary Henry Paulson must prohibit financial institutions that get taxpayer support from paying bonuses and dividends and ensure that taxpayer dollars get put to good use. Coleman says if the Treasury Department doesn't take those steps, "then I will."
Scary! No one wants Coleman up in their business.
Coleman voted for the bailout and Franken said he would have voted against it.