View Full Version : PRESS RELEASE: Dr. Mike Hargadon’s Statement on the Financial Crisis

09-18-2008, 07:34 AM

Release Date: Sep 17 2008

Dr. Mike Hargadon issued the following statement in the wake of the ongoing crisis in our financial markets:

“The socialization of our country continues today, with insurance company AIG receiving a loan from the Federal Reserve in return for an 80% stake in the company. This follows the nationalization of mortgage companies Fannie Mae and Freddie Mac last weekend, and as we speak, other financial companies, such as Washington Mutual and Morgan Stanley, are looking for a life preserver to stay afloat. The end result of all of this will cost American taxpayers hundreds of billions of dollars.

“First, I must go on record to say that I think using government money, which is the people’s money, to bail out private companies is just plain wrong. The essence of capitalism is to allow companies to succeed or fail on their own merits. When the government bails out a private company, it is essentially saying that failure is no longer allowed. Such interventions actually distort the marketplace, and cause individuals to take on more risk than is justified. This is why so many institutions got involved in subprime mortgages – they felt the government would help them out if the investments went bad, and that’s exactly what happened.

“Five years ago, Congressman Ron Paul introduced a bill in Congress that would have removed federal subsidies from Fannie Mae and Freddie Mac. Dr. Paul stated that 'by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market.' Dr. Paul saw what was coming in 2003, and attempted to be proactive in trying to stop it. However, his bill was ignored and never made it out of committee. Still, I applaud Dr. Paul for his repeated attempts to get the Congress to do the right thing before the crisis arrives. I look forward to adding my voice to his next January when I become the next Congressman for Maryland’s Seventh District.

“My opponent, Elijah Cummings, has shown no leadership and no vision regarding this issue. A true leader would have taken proactive steps in preventing this crisis from occurring. Back in 2003, Congressman Cummings lacked the necessary vision to take those steps, even as his colleague Dr. Paul tried to address the problem. Now, with our economic situation continuing to worsen, Congressman Cummings still remains largely unaware of the effects on his constituents. For example, in a June 2008 hearing before the Joint Economic Committee, Congressman Cummings stated that he was surprised that high gas prices were forcing people to move from 'the country' into Baltimore so that they would be closer to their jobs. He admitted that he 'hadn’t thought about it from that perspective.' Is this the kind of representation we want in Washington? A man who is so out of touch with his constituents that he is surprised by the impact high gas prices are having on them? A man who ignored the housing bubble as it was forming and then voted to bail out the perpetrators after it ended? It is time that the Seventh District was represented by someone who understands economics and who is in touch with his constituents.”

Adam Wilson

(443) 977-4401