Letters to the editor

Topeka Capital-Journal, The, Sep 27, 2008

Keep state in charge

The financial crisis gripping our nation has many Americans on edge, and it may be some time before relative stability is restored. No crisis would be complete without someone trying to take advantage of it for political gain. Unbelievable as it may seem, the country's largest insurance companies are using the AIG liquidity crisis and subsequent federal bailout as a reason to deregulate insurance and move its regulation from the states to the federal level.

It was federal regulation of the financial services side of AIG that failed. The AIG insurance subsidiaries were solvent, profitable and paying claims, thanks to careful state regulation of insurer solvency. And it was state regulators and laws that prevented AIG's management from raiding their solvent insurance company subsidiaries to prop up the risky investments in collateralized debt instruments, such as credit derivative swaps on mortgage-backed securities.

It would be a monumental mistake to transfer regulatory authority of the insurance business over to the federal government.

Most elements of the insurance industry are regulated today at the local level by state officials, and those leaders and policymakers do an excellent job. At a time when crisis and turmoil are the norm in the banking and securities sectors, state regulators continue to quietly ensure that insurance companies are solvent, that claims are paid, and that consumers are protected.

The only people calling for federal oversight of the insurance industry are the big insurance players who desire the same level of weak oversight, accountability, and consumer protection that has produced this current crisis. To them, I say, "Get real."

LARRY MAGILL, executive vice president, Kansas Association of Insurance Agents

First step to solution

Respected local corporate leader Kris Robbins was surely correct when he recently told this paper that greed has contributed to the downfall of various financial giants, which will now cost taxpayers hundreds of billions of dollars in government-sponsored bailouts. But I don't agree with his comment that such greed is the "root cause" of this problem. The lack of effective laws and government regulation is the problem that must now be addressed.

Our highly productive economy depends upon hard work, a healthy degree of competition (and cooperation), as well as personal and corporate honesty and integrity. An effective legal and regulatory framework will channel some levels of greed into productive work and punish greed that breaks the law. But most of the corporate greed that will now cost the taxpayers a fortune probably hasn't been illegal.

Thus, the root cause of the problem has been the extremist anti- regulatory zeal of many Republican politicians in recent decades. This has failed to protect the public and has almost brought our economy to its knees. Saying that the "root cause" of the problem is the "greed" that always is a part of human nature has the effect of letting these politicians off the hook.

I hope that voters in the upcoming elections reject that extreme political philosophy and in the presidential and congressional contests vote for candidates who don't belittle the role of government. We need to strike a healthier balance: We need both an effective government sector (that regulates business, but does not over-regulate) and a highly productive business sector.

MARK KAUFMAN,Topeka

Time to be outraged

I'm mad as hell, and you should be too. The Bush administration is proposing American taxpayers spend $700 billion to clean up the mess made by greedy Wall Street moneychangers, incompetent regulators and members of Congress.

This financial crisis that is threatening to plunge our nation into a deep recession is the result of a reckless fiscal policy, a general lack of oversight and accountability and unchecked greed.

It is an outrage that members of Congress in both political parties were looking the other way while taking thousands of dollars from financial institutions to fund their campaigns. As the old adage goes, when you're asleep at the wheel, you drive your car into the ditch. Well, President Bush, Congress, and my opponent, Sen. Pat Roberts, were asleep at the wheel and now they are trying to put the car back on the road at the expense of the next generation.

My son Michael and his wife, Jenny, are expecting a baby in November. Before this crisis, that child -- my first grandchild -- was to own $30,000 of the $9 trillion dollar national debt. If the debt ceiling is raised to $11.3 trillion as is proposed by the Bush administration, my grandchild will be saddled with an even greater debt upon his or her birth. This is immoral and we must stop it.

This bailout may be necessary to save our economy, but we must also do everything possible to help the ordinary Kansans at risk of losing their homes to foreclosure.

New oversight and accountability measures must be put in place to fix the glaring gaps in the regulation of the financial markets that have been exposed by this financial crisis. Congress also must take steps to strengthen the economy, create new jobs, and improve the quality of life for working families.