Date: Wed, 24 Sep 2008 07:09:11 -0700
From: Senator Arlen Specter <arlen.specter@enews.senate.gov>
Subject: Arlen Specter's e-newsletter


September 24, 2008

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Dear Friends,

Thank you for reading my e-newsletter. 

The Econony
With the very substantial problems on Wall Street and the serious problems with the economy, we’ve been wrestling in Congress as to what is the proper balance. Click here to read the letter I sent to Senators Reid and McConnell on the matter this past Sunday.

I did not like the bailout of Bear Stearns. It seems to me that when people are in the speculative field for big profits and they sustain losses, they ought not to come to the public for a bailout. But the Bear Stearns situation was necessary because of the potential domino effect on the economy generally. As we have worked through the process and given greater authority to the Secretary of the Treasury for regulatory processes, there has been a decision not to bailout Lehman Brothers, and I think that is sound. Unless there is some vital public interest and a rollercoaster or domino effect, they ought not to be bailed out.
We face very difficult issues as to how far to go on regulation and how far to tamper with the free market. We did legislate on a plan to help middle-income Americans on mortgages to be able to refinance them. Very frequently on these variable rate mortgages, people found themselves suddenly paying, for example $1200 a month, instead of $2000, and we needed to provide some opportunity for an adjustment of those mortgage payments.

So when we talk about Main Street and middle-income Americans I think that poses quite a different picture from the speculators on Wall Street. It is my view that those bailouts have to be very, very carefully monitored. And if there is a serious impact on the economy overall then we will have to take the necessary action; otherwise, those people who are playing for big returns and sustain losses ought not to come to the public for a bailout.