Thursday, February 12, 2009

Common Cause press release on first bailout

From the inbox:
The financial bailout: Your tax dollars gone missing

(BOSTON) The financial industry bailout was intended to help stem foreclosures, free up credit for consumers, and help local communities. What’s happened right here in our own backyards?

As CEOs from the largest banks that received bailout funds prepare to testify Wednesday in front of Congress, Common Cause is releasing a report describing how bank recipients of bailout funds have failed to increase lending to the residents of Massachusetts.

The Common Cause report, The financial bailout: Your tax dollars gone missing, calls on state and local political leaders to do more to hold banks accountable for helping local communities with the public tax dollars they have received.

“State and local government have a role to play during this financial crisis,” said Pam Wilmot Common Cause Massachusetts Executive Director. “Our local officials should also be holding both local banks and local branches of national banks accountable for how they are spending our tax money they received from the financial bailout.”

According to the Common Cause report, as the bailout money flowed to banks, their lending shrank. Loans from U.S. banks fell by 1 percent in the last three months of 2008, and the decline was more than twice as large among banks that received bailout money. At the same time, there were 53,797 foreclosure filings in Massachusetts during 2008. Some recipients of bailout money have spent billions on executive bonuses or lobbying expenses.

Common Cause has already heard from thousands of people with personal stories about how the bailout is not working for them and their neighbors, and with questions for their political leaders.

“We are in the midst of an historic economic crisis and we need to know our public dollars are being spent to help real people rather than supporting the lavish lifestyles of the very people that got us into this mess,” said Wilmot.

The report can be viewed at

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