Today the American people are faced with the choice of committing more than a trillion dollars of public money to rescue the financial system, or facing a complete collapse of the credit markets, and all the real economic activity that lives on credit. A comprehensive rescue plan is the right course. But the questions that remain are —how will this plan be implemented, and what will it mean for ordinary Americans? Will we finally help the millions of Americans losing their jobs, their homes, their health insurance, and their pensions? Or will this be another bailout without conditions, leaving Main Street in crisis and guaranteeing Wall Street’s crisis will continue in another form? Whatever the details of the plan, one thing is certain— no one-- no politician, no investment banker, no television commentator, no economist -- should ever be able to say again with a straight face that here in the United States we just let markets do whatever markets do and everything works out for the best, that financial markets are best regulated when they are least regulated. And no one should bring that kind of thinking to the problems of working people.
The AFL-CIO calls on Congress and the Bush Administration to craft a program for rescuing the mortgage markets that is governed by people devoted to the public interest, that stops the tidal wave of foreclosures, and that provides liquidity, but not an open-ended subsidy, to the institutions that created and benefited from the practices that led to catastrophe. Congress must absolutely ensure that the administration's plan is not just bailing out Wall Street, but also responds to the real pain on Main Street.
The AFL-CIO supports a program for stabilizing money markets and a ban on short selling in the financial services industry. Both are necessary to avoid a panic and the destruction of our financial infrastructure. But these steps are not permanent solutions to our economic and financial problems.
Permanent solutions can be found in the economic program of Barack Obama—reregulation of the financial markets, a government focused on creating good jobs by investing in infrastructure and solutions to our energy crisis, health care for all Americans, a government that will protect and improve Americans’ retirement security, and a guarantee that American workers can bargain for their fair share of the wealth they create.
Today the Administration and Congress are trying to add up the costs of the Bush Administration’s approach of government by and for the wealthiest Americans. It looks like it will be the largest financial rescue in American history, a commitment that must be made. The only choice left to us at this point is to ensure that we put in place a viable framework for financial re-regulation going forward, so that the greed and dishonesty that led us into this mess are not rewarded further by the short-term solutions needed to avert a complete meltdown.
Contact: Steve Smith (202) 637-5018
