TESTIMONY AT CLEVELAND PEOPLES BUDGET PRIORITIES HEARING

Greg Coleridge April 16, 2009 Epiphany Catholic Church Cleveland

My name is Greg Coleridge. I’m the Director of the Northeast Ohio American Friends Service Committee, a Quaker related social action organization. We work for the dignity and respect of every person, regardless of race, gender, income, religion, ethnicity, physical ability, or sexual orientation.

The proposed FY 2010 federal budget contains upwards of $750 billion to bailout out insolvent banks and other financial institutions. This is in addition to the $700 billion in emergency funding approved by Congress last year plus another $3.3 trillion that the administration slipped through the back door in loans and leverage for crappy mortgage paper.

- These are the same insolvent banks and financial institutions largely responsible though their wild and bizarre investments for the massive housing foreclosure crisis that have caused an economic Katrina in communities like Cleveland
- They are the same insolvent banks and financial institutions that have drawn from $700 billion in emergency funding and another $3.3 previous taxpayer bailout funds to give their CEO’s huge bonuses and perks, buy other banks, and bailout wealthy investors.
- The same insolvent banks and financial institutions that have refused to disclose to the federal government how they have actually spent the tax payers dollars they have already spent.
- Many of the same insolvent banks and financial institutions who still are not lending money to businesses or people – the reason for the bailout to begin with
- And many of the same insolvent banks and financial institutions who lobbied and gave political contributions to reduce or eliminate regulations prior to the financial crisis and to continue to lobby and make political contributions today to prevent tough regulations and controls.

Not a penny more of our tax dollars should be flushed down the bank bailout drain. Rather, federal funds should be used to clean up the financial mess and help real people and the real economy. Here are 4 proposals:

1. Federal funds should be directed to enforce the Prompt Corrective Action Law, a federal law that mandates the government seize insolvent banks to protect tax payers. Insolvent banks are a financial drain that we can no longer afford. Banks that are too big to fail are simply too big to exist.
2. Federal funds should be directed to low and moderate income people facing home foreclosure. Foreclosures soared in March, up 44 percent over February’s high. This is a crisis that must immediately be addressed.
3. The global financial crisis has led to a real unemployment rate, what economists call the U-6 rate, of 16%. This is almost at Great Depression levels. More federal funds are needed to hire people of all races and genders.
4. Federal funds need to be set aside to create a national bank -- to assume the responsibilities of the mis-named Federal Reserve Bank. With big banks unwilling to make money available for loans, it’s time for the federal government to create what many other federal governments have – a national bank independent from any corporate bank or financial institution. The creation and allocation of money is too important to be left to financial corporations who operate in a profit maximization mode. It’s time to create a national public bank accountable to the public to serve the needs of the public.

Thank you.