BJ Lawson speaks out against the insane corporate welfare going on with the bailout of Freddie and Fannie in this press release:
Today, North Carolina Congressional candidate Dr. William “B.J.” Lawson described the proposal by Henry Paulson and the Treasury department to support Freddie Mac and Fannie Mae as “deceitful and dishonest.”
Lawson said, “The options proposed for supporting these organizations amount to massive corporate welfare payments to bond investors and foreign governments.” He went on to say, “Stock and bondholders of Freddie Mac and Fannie Mae have never had an explicit guarantee of government support, yet these two private companies have relentlessly pushed the limits of financial sanity in an effort to maximize their profits.”
Freddie Mac and Fannie Mae hold over $5 trillion in mortgages and other debt, which is about half of all American mortgages. As a result of the current credit crisis, they were responsible for funding about 80% of all mortgages in the first half of this year. Freddie Mac and Fannie Mae are both languishing in uncertainty, with representatives for both corporations claiming that they are currently solvent based upon historical asset values. But market behavior and the government’s response reveal that both are actually insolvent based upon current marked to market asset values.
Lawson, however, proposes a more balanced solution to the problem: “Instead of a bailout, why don’t we give Freddie Mac and Fannie Mae a long-overdue dose of honesty? Their assets and debt needs to be honestly evaluated and restructured, with the stock and bondholders taking appropriate losses to reflect the fact that their investments were not without risk.”
He went on to say, “Using taxpayer funds to bailout these corporations and their investors is another example of letting corporations profit during boom times, but then expecting the American people to pay for their mismanagement during bad times. Such abuse cannot be sustained by the economy, and Congress must begin serving the people instead of the banks and special interests.”
Dr. William “BJ” Lawson is running for Congress in North Carolina ’s 4th Congressional District.