Nader Makes Appeal to Congressional Black Caucus
Press Release
FOR IMMEDIATE RELEASE
Contact: 202-471-5833
An Open Letter to the Congressional Black Caucus from Ralph Nader and Matt Gonzalez
Dear Colleagues:
As your historic 38th Annual Legislative Conference comes to an end, you and the some 18,000 attendees came to Washington to deliberate on the policy issues of great importance to African Americans.
I write to you in a moment of great crisis for our country. We are on the brink of a massive economic meltdown with lethal consequences to millions of ordinary Americans citizens, with disproportionate consequences for African Americans.
The current financial crisis not seen since the Great Depression has been triggered not by aspiring homeowners, but by predators on Wall Street and in the mortgage banking industry that have deceived and exploited millions of Americans.
Now that the house of cards of casino capitalism is beginning to crash, Secretary Henry Paulson and the Bush White House have come to Congress with a 3-page proposal asking for a $700 billion bailout from the taxpayers.
Worse, Mr. Paulson wants a carte blanche bailout without conditions for the very companies and executives that created this crisis in the first place. Meanwhile, millions of families are losing their homes as foreclosures reach epidemic proportions.
I know of no recent financial crisis that better illustrates the saying that "when America catches a cold, African Americans catch pneumonia." As you know, African Americans were one of the key groups targeted by lenders with sub-prime mortgages, a three-card monte shell game leading to the "stripping" of their home-equity gains.
I don't have to tell you how crucial home ownership is for equity-building and wealth accumulation for African Americans, not only to build a better quality of life for this generation, but to pass on to their children.
Melvin L. Oliver and Thomas M. Shapiro recently wrote that African Americans "own only 7 cents for every dollar of net worth that white Americans own." For African Americans, home equity accounts for 63 percent of the total average net worth. Despite the fact that through a "segregation tax" appreciation is slower in minority and even integrated neighborhoods, home equity still remains the most potent engine for wealth for African American families.
This Wall Street-created nightmare has not only resulted in massive foreclosures and loss of homes in African American communities, but its consequences will reach far beyond homeownership, wiping out equity overnight, robbing future generations of financial stability and leverage. Foreclosures are projected to affect 10 percent of African American borrowers.
For African American and Latino households, estimates place the total loss of wealth between $164 billion and $213 billion for subprime loans taken during the past eight years -- the largest loss of wealth to people of color in modern American history.
I urge you to join me in rallying the American people against any bailout for Wall Street that does not include robust and comprehensive intervention on behalf of all homeowners and taxpayers.
I ask you and your constituents to join me in a Call to Action to demand that Congress stand up to the Bush/Cheney White House.
I ask you to enlist the support of the some 18,000 people attending your conference, and their families and friends back home, to write their Representatives and demand changes in the bailout bill that would include:
- Provisions for homeowners to stay in their homes in default, or rent them at market value.
- A cap on executive compensation and disgorgement of ill-gotten gains.
- A stimulus package for infrastructure repair and upgrade to generate new community jobs.
- Comprehensive regulation of and disclosures by the financial industry and Wall Street to prevent this from occurring again.
- Tougher criminal enforcement against culpable firms and executives.
- Authority to shareholders to control the companies they own, their executives, and boards of directors.
- At the least, support for the American Housing Rescue & Foreclosure Prevention Act of 2008, which will, if passed by the Senate, provide mortgage re-financing assistance to keep at least 400,000 families from losing their homes and will provide funds to help states and localities purchase and rehab abandoned and foreclosed homes and prevent deterioration of African American neighborhoods disproportionately affected by foreclosures.
In the spirit and tradition of Dr. Martin Luther King, Jr, Mrs. Rosa Parks, and legions of other warriors for justice, I ask you to join me in this Call to Action to avert a probable catastrophe.
Cordially,
Ralph Nader Matt Gonzalez
