The Scarlet Letter

I wrote my Representative and Senators before the votes on the bailout. My Senators both voted against it, but my Representative voted for it.

He sent me an e-mail reply today, explaining why he voted for it with the standard "sure the people don't like it, but we're smarter than the people and had to save them from themselves" gambit.

He should wear that letter like a badge of shame.

He even cited the fact that Warren Buffett was for it, which was purely self-serving on Buffett's part, just like his recent attempt to jawbone the stock market higher after he bought into GE and Goldman. He quoted Buffett as saying he'd rather be "approximately right" than "precisely wrong," saying that to do nothing would have been "precisely wrong."

And, incredibly, he tried to explain derivatives to me - me, a guy who cut his teeth evaluating risk-controlled arbitrage strategies by thrifts, traded futures, and valued and managed mortgage and interest rate derivatives including captions, swaptions, and residuals.

So, in case anyone's interested, here's my response to him:

"Dear Congressman Moore,

I appreciate your response. However, I fear that in this instance, both you and Mr. Buffett - who, as a professional investor, stands to profit mightily from the stance he's taking, regarding the bailout and his euphoric urging of Americans to buy stocks - are both precisely wrong. (Regarding the stock market, I believe today provided ample evidence of that.)

I am an economist who has been accurately forecasting the current economic crisis for at least 18 months now, and foresaw the perils of excess government intervention in the markets as early as 2001, after the Greenspan-inflated dot-com bubble burst. I have also actively traded and managed many of the complex derivatives you attempt to explain. As such, I am all too aware of the causes for this crisis, which has roots as far back as the New Deal. In fact, most of the causes are legislative in nature - DIDMCA, the Tax Reform Act of 1986, etc. I do not accept your partisan view of the causal factors - your Democratic colleagues, notably Messrs. Frank, Dodd and Schumer, are at least equally complicit in the current state of the US economy. Rep. Frank, in particular, stated in 2004: "I'm willing to roll the dice when it comes to subsidized housing." Given that he - and you - are standing at the craps table with taxpayer money, that attitude is dereliction of duty bordering on the criminal.

Now is not a time for partisan finger-pointing, it is a time for realistic solutions, which you and your colleagues have failed yet again to provide. Rest assured that you will never have my vote as long as I live, because I and my fellow taxpayers will be paying for your reckless, uninformed and irresponsible decision-making for at least that long.

Sincerely,

Brian Hague"