I’m glad to report that the era of appeasement in this financial crisis seems finally to have ended. In the past several weeks, there has been a call for better accountability, both retroactively and moving forward, from both parties. We all seem to agree that the first tranche of TARP (Troubled Assets Relief Program, or the bank bailout) was poorly administered and that many of the banks receiving funds through this federal program—the same banks responsible for this financial crisis in the first place—have continued to take advantage of taxpayers’ money by using the government outlay in ways that have not helped the economy.
Credit has not loosened up. The housing market continues to suffer, and people who couldn’t afford their mortgages six months ago have seen no change. The market’s increase last week, following U.S. Treasury Secretary Tim Geithner’s introduction of the public-private partnership for investing, does not help folks in the Fifth District. For the big banks, little has changed in their attitude: rather than worrying about how to help bring the nation out of this crisis, they continue to insist that they be let onto the lifeboat first.
For my part, I’ve consistently opposed TARP and all the loopholes it contained, and as I mentioned last week, I’ve also pushed to block the bonuses that would reward some of the worst actors in this economy. The House voted to block the second tranche of TARP, while also voting to pass strict new rules to govern the distribution of funds in case the bill did pass. The Senate allowed the second round of TARP to go through, then did not pass our accountability measures. In the economic recovery (or stimulus) package, we voted to limit bonuses in an effort to get language in somewhere that would put pressure on the banks. I’ve supported both Republican and Democratic efforts to rein in bonuses like those at AIG, and Rep. Rangel’s bill in that vein passed the House with bipartisan support.
The AIG bonus scare has served as a wake-up call to those who got us into this mess and thought they might get a free pass out of it. They are beginning to realize that’s not the case, that the American people are calling for better accountability and even punitive measures to disincentivize this kind of behavior from now on. Lawmakers on both sides of the aisle are fed up with the greed that continues even in these difficult economic times, and the trust for Wall Street is quickly waning.
Rather than focus on helping those who got us into this mess try to climb their way out, we need to rebuild the system from the ground up, asking for help from financial players we can trust—the community banks and small business owners. We should invite them to the table, ask for their help in solving this crisis, and make sure that any accountability measures we put in place for Wall Street do not adversely affect them. We’ve spent enough time prioritizing the worst actors in this crisis; let’s turn the tables and start focusing on our communities again.
– Tom Perriello represents the Fifth District in the United States Congress.
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