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Gingrich Campaign Press Release - Don McKee: 2012 Hopeful Newt Gingrich Says Things that Need to be Said

August 01, 2011

Don McKee of the Marietta Daily Journal praises Newt's strong stance against the Dodd-Frank Act and his position as the de facto community banking candidate.

Newt Gingrich says the credit rating agencies failed to do their job before the 2008 financial meltdown and now they are overreaching if they downgrade America's rating — as feared by some observers even if the debt ceiling is raised.

"I am totally uninterested in satisfying Moody's and Standard & Poor's," Gingrich said at a presidential campaign rally here last week, the Journal reported. "They were totally wrong in 2008. They failed to do their job. They're now overreaching in the opposite direction."

As for worry about this country possibly getting a rating downgrade, Gingrich said it would reflect on President Barack Obama. "You already have the Obama Depression. Let's see if he wants to add the Obama Default and then run for re-election."

Gingrich also called for an audit of the Federal Reserve Board, reeling off a series of transactions including $5 billion for the Bank of Libya, $19 billion for "a bank in Paris," and $13 billion for Goldman Sachs "through a backdoor through AIG in a way they didn't have to report it." Investment firm Goldman Sachs and insurance giant AIG were among the first recipients of bailout billions in 2008.

In an interview published last week by American Banker, Gingrich went further. He said federal regulators should have allowed AIG to fail, the same as Wall Street's venerable Lehman Brothers. "You know what capitalism is?" Gingrich asked. "Taking risk. … What we've invented is socialism on the way down and capitalism on the way up."

Gingrich, said American Banker, "is the only Republican presidential contender to talk in depth about his objections to the regulatory reform law," the Dodd-Frank Act. Gingrich "cited fears that community banks are near the brink of extinction."

"We had a crisis in 2008 because there were banks that were too big to fail," he said. "They are now bigger." That, he said, "is the opposite of rational behavior," only making matters worse. The government should have created a policy "that maximized the growth of small banks that were small enough that they could fail without risk to the general economy," he said. But Dodd-Frank solidified the "too big to fail" fallacy.

To designate certain businesses as "systemically important financial institutions," the government essentially sends the message that it will support those firms in a crisis, Gingrich said. "If you are a normal American citizen and you look at this stuff and you look at your mortgage and you look at your job…. you look at the amount of money the banks now have and you say to yourself, ‘How come the fix is in for the big boys and against everybody else in America?'" He said, "Dodd-Frank is part of that fix."

Gingrich took aim at the Financial Stability Oversight Council headed by Treasury Secretary Timothy Geithner. There is an "inherent, inevitable corruption of having a Treasury committee appointed by the president micro-manage banks," Gingrich said. "It's unavoidably a corrupting influence."

Newt Gingrich says things that need to be said.

Newt Gingrich, Gingrich Campaign Press Release - Don McKee: 2012 Hopeful Newt Gingrich Says Things that Need to be Said Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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