While many of us may not have been alive in 1929, some of our parents and grandparents were.  On “Black Tuesday” in 1929, the U.S. stock markets suffered one of the worst one-day crashes in U.S. history.  What most do not remember is that the economy rebounded for a few months afterward.  Americans would later find it would be a domino effect drug out over several months, not the crash itself, that would lead to what we now know as the Great Depression.

In early 1930, regardless of the stock market crash, credit and loans were actually widely available at low rates.  However, many consumers were drowning in debt and were reluctant to borrow, spend or invest money – forcing bank after to bank to fail.  By May 1930, spending slowed dramatically, auto sales plummeted closing factories and ultimately, unemployment skyrocketed out of control.  Prices of food and fiber nationwide dropped and commodity prices plunged, severely hurting small farmers.  This disastrous domino effect continued until it made its way to every American state and community.  What followed was one of the longest and harshest economic disasters in American history.

In 2008, we face an eerily similar situation.  Our stock market is violently unstable, suffering one of the largest one-day drops in history earlier this week.  Major banks and lending institutions are failing and freezing lending.  Americans are drowning in debt and are reluctant to spend their money.  Farmers are suffering and unemployment continues to rise.  Most of the economic and financial experts agree that our country is on the brink of another nationwide economic failure and that we must act now.

Make no mistake - I am furious that the bad decisions of millionaire executives on Wall Street are largely responsible for getting our country into this current situation and I personally believe they should be punished.  However, I am also concerned about the domino effect they have set into motion because it is only a matter of time before it reaches all of us here in Arkansas, wiping out our savings accounts, pensions, 401K’s, and, ultimately, our homes and jobs if we do not take corrective action immediately.

The Bush administration’s answer to this crisis was a $700 billion blank check to Wall Street companies.  I said from the beginning this was completely unacceptable and that I would only support a rescue package that protected taxpayers and Main Street America from the bad decisions made on Wall Street.  Any package would have to include protections for working families’ pension and retirement accounts along with regulations that increased oversight and accountability on Wall Street, increased transparency of major companies and placed limits on executive compensation.  Most importantly, I wanted a package that would eventually pay back taxpayers for this investment.

For these reasons I supported the Emergency Economic Stabilization Act of 2008, which contained over 400 pages of taxpayer protections that would not only rescue troubled credit and financial institutions to stabilize our economy, but would also prevent an economic depression on Main Street, reimburse the taxpayers for every dime as the plan begins to work, and reform how business is done on Wall Street.  This legislation was not about bailing out Wall Street executives.  It was about protecting the average working American.

I assure you that my vote was not cast lightly. I have worked diligently with Congressional leaders to ensure any rescue legislation protected taxpayers, not executives, and would eventually pay back taxpayers for the investment.  I fought hard for the taxpayers’ insurance guarantee, which requires that if in five years taxpayers aren’t fully repaid, the President is to submit a plan to Congress to pay back the remaining amount.

The bi-partisan, depression-prevention legislation that resulted from our negotiations is one that I am confident will dramatically help stabilize our nation’s economy and ensure this crisis does not repeat itself.  While we won’t see the economy make an immediate turnaround, this historic legislation will help stop the bleeding to ensure this country does not slip into another 1930-era economic depression.

For more information, I encourage you to visit my Congressional website and read a full analysis of my vote by clicking here.

You can also read a brief summary of the Emergency Economic Stabilization Act of 2008 on my website by clicking here.

Sincerely,

 
Mike Ross

Please remember that if you have issues related to the federal government such as Social Security, Medicare and veterans benefits, you can visit with me in a community near you. This week, I will host community office hours at:

Sheridan:  Mon., Oct. 6, 9:00 a.m. - 10:00 a.m., at Grant County Courthouse, 101 West Center Street, Sheridan, Ark.

Mike speaks at the tribute to retiring Arkansas State Sen. Jim Hill of Nashville on Sept. 30 at the University of Arkansas Community College at Hope. Pictured (L-R): Sen. Jim Hill, Mike, Gov. Mike Beebe, and UACCH Chancellor Chris Thomason.