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Chadwick: Why You Should Write Your Congressman

Tuesday, 30 Sep 2008 | 7:56 AM ET

Dear American Taxpayer and Voter,

For your own sake, I implore you to get over your anger at Wall Street fat cats – they have already lost more money than you will ever make. Neither you nor your Government gives a hoot about the loss of their personal wealth. Those fat cats have always known that theirs was a high risk career, which meant that in the good times they made scads of money and in the bad times they stood to lose it all. You could say they live by the sword and die by the sword and right now you are witnessing many of them dying by the sword.

But remember also that working side by side with all those fat cats are hundreds of thousands of people just like you, who are not being paid fat cat bonuses, who have a small house in the suburbs and children to educate and mortgages to pay – they, too, are part of Main Street and they, too, are losing their jobs.

Rightly so, you are most concerned about your own financial security which includes the security of all those near and dear to you. And the notion that Big Brother U.S. Government can simply impose itself in a way you have never witnessed before is threatening, as well it should be. But before you refuse a helping hand because you do not trust the giver, think about a few things.

In our great democracy, Government has from time to time had to play the role of lender of last resort. In your own lifetimes, you have been the beneficiary of that ‘largess’ when less than 20 years ago our Federal Government provided the capital needed to save millions of Americans threatened by insolvent savings and loans banks. While it might be hard to believe, the Government actually made money in that endeavor and that money was returned to you, the taxpayer.

Today the U.S. banking system is in a financial plight that has the potential of being worse than anything we have seen in over 70 years. We can argue endlessly about how it happened and who should be punished, but that and $3.50 will get you a cup of coffee at Dunkin Donuts. Leave that discussion and argument for the dinner table once the crisis has passed.

To be honest, despite my nearly forty years as a professional in the investment business, I do not truly understand the complexity of this humungous crisis. But what I see with great clarity is the scariest part of the problem and it is this: banks, and that means your local bank too, are unwilling to lend any money right now. And if banks refuse to lend money to you the people that make this economy run, the entire U.S. economy might come to a grinding halt and that means a huge recession and horrific unemployment and more people losing their homes and being unemployed.

What the U.S. Government is trying to do with this bill in Congress is to provide the money necessary to make it easier for you to get a loan or to do your weekly payroll if you have a business, or to take out an equity line of credit to put a child through college. The banking system is frozen right now and the Government is willing to provide the money to get it going again. That is critically important for you who are Main Street. This bill is not a case of the Government bailing out Wall Street – it is the Government bailing out Main Street.

It is time wasted right now to try to find a party to blame for this horrific mess. There is plenty of blame to go around. This crisis cannot be laid on the shoulders of any one administration – this problem has been in the making for the last dozen years.

Congress is taking its cue from you – it is truly in your own best interest to tell your Senator and Congressman or Congresswoman to pass a bill that will allow our Government to act as lender of last resort. The alternative could be massive unemployment and a recession that surpasses any that you or your parents have every witnessed.

So take your flu shot now, painful though it might be. It will be far less painful than the flu epidemic that is around the corner and threatens us this winter.

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Patricia W. Chadwick is an asset manager and financial consultant with more than 25 years of investment experience. She is founder and president of Ravengate Partners LLC, a consulting firm that provides advice on financial markets and global economics.

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