Tuesday, September 16, 2008

Tennessee's Bob Tuke Blasts Republicans on Financial Crisis

In his weekly message to Tennessee voters, Bob Tuke, Democratic candidate for the US Senate, lambasts Republican economic policy. Tuke is challenging incumbent Republican Lamar Alexander in the November election. Mr. Tuke writes: 

We all have been reading about something I never thought I would see - the failure or takeover of three of the largest and most venerable investment banks in America, together with the failure of several commercial banks and mortgage lenders across the United States. Add to those catastrophes the threats to the financial viability of Freddie Mac and Fannie Mae and the insurance giant AIG, and we face a financial industry crisis we have not witnessed since the Great Depression. 

Of course this crisis does not necessarily mean there will be a world-wide financial collapse, but such a collapse is possible unless there is substantially better financial governance in the next several weeks than we have had in the past several years. CEO's and Boards of Directors in the private sector need to rein in the aggressive and reckless risk-taking that has weakened our financial markets and the public confidence in them. Government regulators need to enforce the laws and regulations that already are on the books, and they need to write and enforce new regulations that will require more sensible lending and investment policies and that will hold accountable those who fail to obey the rules. Congress, especially the Senate, needs to do its job of oversight. 

I have been practicing law in the financial services industries for more than 30 years, and I have never seen such willful incompetence in both the private and government sectors. On the private side we have witnessed grossly exorbitant salaries and benefits claimed by executives (and awarded by ineffective Boards of Directors), greed in investments in subprime mortgage loans with losses that were entirely predictable, and failure to manage portfolios and people the way good business executives generally have in America for decades.

On the government side, the regulators of the financial services industries simply abdicated. Led by our historically incompetent President and Vice President, and influenced by lobbyists and massive campaign contributions, the Bush-Cheney-Alexander Republican approach of letting the financial markets govern themselves has resulted in this debacle. It did not have to happen. Proper regulation and Congressional oversight could have - and should have - curtailed subprime mortgage lending. The unsound housing investment bubble could have been prevented. Reckless investments by traditionally conservative institutions could have been stopped. 

This is another reason I am running for the U.S. Senate: To offer Tennesseans a Senator who understands the financial industries and who will not be influenced by massive campaign contributions and cozy relationships with lobbyists. Lamar Alexander has voted lockstep with the Bush administration's economic policies and has voted to strike down legislation to protect consumers and to eliminate adequate oversight of our nation's financial system, which has led to the disaster we face today. At the same time he has received approximately $3 million in contributions from executives and PACs of banks, realtors and securities companies for his ardent opposition to government oversight that would have protected borrowers and consumers.

I will look after the interests of the people of Tennessee and America instead of giving in to the interests of big money and their cronies. Together, let's Take the Hill.

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