Local congressional candidate shares thoughts on failed bailout package


Jim Oberweis, Republican congressional candidate for the 14th district, held a press teleconference Wednesday to inform voters in his district about the failed bailout.

“Two days ago, the House of Representatives rejected a flawed bailout plan. A plan that would put taxpayers on the hook of $700 billion to buy bad assets from Wall Street investors,” Oberweis said.

The current economical system in the United States is based on confidence and too few people have too little confidence in it, Oberweis said.

He offered a three-step plan which he thinks will help stabilize the situation on Wall Street.

The first step would increase the Federal Deposit Insurance Corporation (FDIC) insured amount from $100,000 to $250,000. Giving all FDIC-insured bank account holders protection from adverse economic conditions.

The second part of his plan calls for the temporary suspension of marked marketing accounting.

A big component of marked marketing involves investment securities, or a group of mortgages sold from a bank to large institutional investors, said Carl Campbell, associate professor and assistant chair of the economics department at NIU.

The true value of securities is determined by future mortgage payments. If a large fraction of homeowners default on their mortgage payments, then the value of securities appears lower. Conversely, if everyone makes their mortgage payments, securities are worth much more, Campbell said. Because of the risk of these investments, it can be hard to determine their actual value.

The third part of Oberweis’s plan would involve the issuance of a new class of stock by supporting legislation to remove the capital gains tax on stock issued in this class.

“[This] could unlock tens of billions of dollars in private equity capital and provide a real shot in the arm for the economy,” Oberweis said.

College students face this economic crisis as the next generation left to deal with the remnants of whatever decision is made by Congress to stabilize the market.

“I would tell college students to find the best job you can and learn as much as you can and get the best education you can and to take advantage of that education,” Oberweis said. “The more you can learn in this period the better off you’re gonna be later.”

The local area could be affected less severely by the instability of securities.

“[DeKalb and Sycamore] didn’t see the typical rise in prices that other parts of the country experienced in such a short period of time, and so we’re not going to see the decline in the prices that other markets in the area are experiencing,” said Todd Burghardt, president of the DeKalb Area Association of Realtors.