Bachmann, who considers U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke as attempting to assume unprecedented powers, cited several conditions ideally part of any bailout action by the government not that she likes a bailout.
by T.W. Budig
ECM Capitol reporter
Sixth Congressional District Congresswoman Michele Bachmann and Democratic challenger Elwyn Tinklenberg don't want corporate leaders overlooked in any federal bailout of financial services industry.
Bachmann, who considers U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke as attempting to assume unprecedented powers, cited several conditions ideally part of any bailout action by the government not that she likes a bailout.
"We're talking about the federal government bailing out private institutions a bad, bad scenario, said Bachmann, speaking Monday (Sept. 22).
"If it's going to take place, No. 1 no private shareholder, no private board member, officer, should receive one cent of compensation from the public treasury, she said.
Congresswoman Michele Bachmann shared many thoughts about a proposed government bailout of private financial institutions. (Photo by Chris Schafer, Princeton Union-Eagle)
"Not one cent, repeated Bachmann. "They should completely lose whatever investment they had in this private company, she said.
While expressing support for federal action, Tinklenberg argued that without including corporate reforms in the package only part of the problem is being addressed.
Risky behavior
Indeed, a bailout without reform could prompt riskier behavior in the future.
"I don't think we can have the CEOs of these companies just get away with tens of millions, and in some cases, hundreds of millions of dollars for having created this mess, said Tinklenberg, speaking Friday (Sept. 19).
"We need to make sure that those people who have profited dramatically by the excesses are also the people who suffer when those excesses come home to roost, he said.
Tinklenberg called for greater accountability by corporate board of directors.
"I think we really need to strengthen the ability of stockholders to hold management accountable, said Tinklenberg.
When boards fail to provide prudent oversight, they should carry a personal financial liability for their failures, he said.
Tinklenberg and Bachmann see different causes for the current financial services industry meltdown. (Photo by T.W. Budig, ECM Capitol Reporter)
Free market place ideologues Tinklenberg includes President Bush and Bachmann in this category helped bring the financial services crisis by blindly adhering to the belief that the littler the government interference in the marketplace, the better. "And now isn't it ironic that now here they are going back to government to bail it out, said Tinklenberg.
Formation of vast wealth
Financial crises have happened under Democratic Administrations, explained Tinklenberg, but the "excesses have been reinforced by Bush Administration tax policies that has rewarded the formation of vast wealth.
Bachmann, too, points at the other party in ascribing blame.
She called for House Financial Services Committee Chairman Barney Frank, D-Mass., to resign his chairmanship.
Bachmann serves on Frank's committee.
Additionally, Bachmann called for Senate Banking Committee Chairman Christopher Dodd, D-Conn., to also resign his post. "They are both architects of this failed system, said Bachmann. "They should both resign and step down immediately, she said.
Number of contributing factors
Bachmann views a number of factors as contributing to the current financial market crisis.
She argues that crippled mortgage giants Freddie Mac and Frannie Mae were fundamentally unsound there should never be a model again where the government guarantees a private company, she said.
"They have to go away, said Bachmann of the institutions.
Bachmann also called for the repeal of Community Reinvestment Act legislation dating from the 1970s with the goal of broadening the loan base by banks and according to the Federal Financial Institutions Examination Council, is taken into account in considering institutions' applications for deposit facilities, mergers and acquisitions.
Bachmann views the legislation as holding lending institutions to a "racial litmus test and pressuring them to make loans to financially unqualified applicants.
"All in the name of diversity, she said. "But my point the government was wrong to do that in the first place banks should of had the guts to look at the government and say, No,' said Bachmann.
Not just greedy Wall Street
Bachmann argues the financial services service industry and the public should have had the fortitude to say "No. "It isn't just greedy Wall Street, said Bachmann. "It's also greedy borrowers, she said.
Congress should take to examine the facts of the situation before rushing through legislation, cautioned Bachmann.
"I understand if there's there going to be market meltdown, that we do need to act, she said.
But Congress was elected to safeguard the public's money, she said.
"So far we've had two people calling the shots the Treasury Secretary and the Federal Reserve chair, said Bachmann.
"Well so far the shots haven't worked out real well, she said of bailing out AIG and financial services companies.
Problems of Main Street must be addressed
While dealing with Wall Street is part of an overall answer, the problems of Main Street must also be addressed, said Tinklenberg.
Tinklenberg spoke of job creation, specifically looking to the rebuilding the nation's transportation infrastructure system as a means of providing good jobs.
In Washington congressional committees are hearing the Bush Administration's proposal for a $700 billion bail out package to help stabilize the market.
One issue of concern to Democratic and Republican leaders is corporate executive salaries.
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