Gordon Clark: Financial Crisis Is About Failed Government, Not Failed Banks

FOR IMMEDIATE RELEASE

Media Contact:
David Gaines
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Financial Crisis Is About Failed Government, Not Failed Banks

Chris Van Hollen Involved in Network of Influence Peddling that Brought on Crisis

Silver Spring, Maryland (September 18th, 2008) - The Clark for Congress campaign issued the following statement today by 8th District Green Party congressional candidate Gordon Clark on the developing American financial crisis:

 “The financial crisis enveloping our nation right now is not nearly as complicated as we are led to believe.

 “At the middle of the immediate banking crisis are strange sounding terms such as 'derivatives' and 'credit default swaps.' Derivatives are simply packages of loans that have been divided and recombined over and over again so that they can be sold over and over again – so often in fact that most investors and even investment banks have no real idea what they are buying and what their true value is. This was done in spite of the fact that many of the loans were bad to begin with, and that their continual redivision and reselling, while creating unjustified short term profits, added absolutely nothing of real value to the economy.

 “Credit default swaps, the instrument which brought down insurance giant AIG, were simply that company’s way of making still more money on this scam by selling insurance on bonds and securities, many of them the mortgage-backed securities that are now imploding. (AIG held $441 billion worth of these credit default swaps.)

 “But why were the companies allowed to engage in these shenanigans in the first place? Because at the true heart of the financial crisis is a complete failure of the federal government to oversee and regulate the financial companies that are now crumbling before our eyes, and taking many regular Americans down with them.

 “It is easy enough to blame Republicans such as former Sen. Phil Gramm, now an economic advisor to John McCain’s presidential campaign, who wrote the most recent bill to further deregulate the finance and securities industry. But the reality is that the long process of deregulating the financial industry started back in 1980 under a Democratic Congress, and has continued apace under both Republican and Democratic administrations. Many Democrats voted for the very laws that tore apart the financial safeguards so wisely put in place after the Great Depression, and that allowed this monumental financial crisis to happen. And none of them have been fighting to get that regulatory structure back in place.

 “Why would politicians from both parties either actively encourage this process, or simply go along for the ride? Try campaign contributions.

 “Chris Van Hollen, current representative of Maryland’s 8th Congressional District, is a perfect example. According to the Center for Responsive Politics, Mr. Van Hollen has raised more than $1.7 million for his own coffers in just the current election cycle. Of that total, $773,604 was raised from PACs, with $33, 498 coming straight from the Securities and Investment industry.

 “And far beyond that, in his role as chair of the Democratic Congressional Campaign Committee, Mr. Van Hollen has helped raise a staggering $115 million this election cycle – with nearly $5 million of that ($4,925,112) coming from the Securities and Investment industry.

 “How is it possible for Members of Congress to regulate industries at the same time they’re accepting large sums of money from them? It’s not. And that’s why we’re in the crisis we’re in today.

 “While we try to deal with the immediate fallout, one thing is clear. If our financial system is ever to recover, we need to return, and quickly, to the vigorous and vigilantly enforced laws and regulations that used to keep greed in check.

 “And electing politicians who refuse to take money from the very industries and companies they are supposed to be watching over would be a great place to start.”

Gordon Clark, the Green Party candidate for U. S. Congress from Maryland’s 8th District, has for over twenty years been a community activist in the peace, environmental, nonviolence, and social justice arenas. He is a former National Executive Director of Peace Action, the founder of Iraq Pledge of Resistance (now the National Campaign for Nonviolent Resistance), and a former Field Director for Public Citizen's Congress Watch.

For more information on the Clark for Congress campaign, call (301) 589-2355, email info@clarkforcongress.net, or visit www.clarkforcongress.net and www.myspace.com/clarkforcongress.

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