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Congressman Maurice Hinchey, Proudly Representing the 22nd District of New York
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Hinchey Warned Long Ago Of Major Risks To Financial Market Because Of Deregulation
Posted by: Maurice Hinchey (09-26-2008, 02:50 PM)

I have long pointed to the Gramm-Leach-Bliley Act of 1999, which repealed the Glass-Steagall Act of 1933, as the source of much of the deregulation of the financial markets, which has led to the current financial crisis. Glass Steagall was put in place in order to keep investment banks separate from commercial banks.  I was one of just 57 members of Congress to vote against the Gramm-Leach-Bliley Act.  That bill essentially enabled both banks and investment firms to offer financial services. The bill allowed banks to not only sell mortgages, but also to take those mortgages and put them in risky investment schemes.  I agree with many economists who have now concluded that the current sub-prime mortgage crisis came about as a result of this legislation.  Take a look at what I have said in the past about the Gramm-Leach-Bliley Act.
Hinchey Warns Against Economic Deregulation and Oversight   November 4, 1999 -- House Floor Debate of Gramm-Leach-Bliley that repealed critical market regulations.
Congressman Hinchey: "We have 1 hour to debate the most comprehensive change in financial services legislation in the Nation in the last 65 years. This is one of the most important bills to come before this Congress in decades, and we are going to spend 1 hour this evening debating here on the floor of the House of Representatives.
"And that 1 hour is divided thusly: two-thirds of that hour go to the people who are for the bill; only one-third of the hour goes to the people who are opposed to it. That is wholly consistent with the objectivity and fairness contained within the bill itself.
"This is a farce, it is a mistake, it is a day that we will rue. We are constructing here an apparatus that will come back and bite us severely. 
"This country will suffer from it. Untold millions of our citizens will suffer from the contents of this bill. We will look back on the way we debated it, the short shrift we gave to the consideration of all the momentous consequences of this bill and the unfairness with which we allocated the time and we will regret it. We will regret it, the public policy point of view and politically. This is a big, serious mistake."

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April 16, 2008 -- U.S. House of Representatives Appropriations Subcommittee on Financial Services and General Government Hearing with Securities and Exchange Commission Chairman Christopher Cox.

Congressman Hinchey: "And I think the main reason for that is the deregulation legislation, which was passed by this Congress and which opened up the ability for a number of financial operations to engage in practices which are not overseen by the government, and that is particularly true of hedge funds. "But the confidence that they should have in their investment doesn’t come about without the regulation, the oversight of these investment operations. So the deregulation of investment I think has had a major impact on the way these hedge funds operate. And right now, they are very, very prominent. They control something in excess of $2 trillion of investment capital out there in the economy."

"I think that we need is to go back to regulation. Senator Grassley has introduced a piece of legislation in the Senate which would begin to move us in that direction."

"And I think a decline in the economy is primarily driven by the manipulative way in which investments have been engaged in, including the incorporation of large amounts of these mortgages into these hedge fund investments."

"One of the things that we have seen recently is a statement by the Energy Information Administration and a brief quote is, 'Weakness in the U.S. economy has led to softening gasoline demand.' And we know that is true. The demand has gone down because of the fact that there is a weakness in our economy, and particularly people throughout the middle class are having a very difficult time meeting their daily obligations, whether it is energy, food, whatever it might be."

"And a large amount of the increase in the price of energy, particularly oil, is going up based upon hedge funds intruding themselves in there and investing in those commodities.  I have to laugh a little bit when I say intruding themselves in there because I mean they are gree and open to do that.  There is no regulation against them.  THey can just do it in whatever way they want to.

"But you do think that we ought to have some sort of regulation on these kinds of investments to ensure that people aren't doing this or these funds aren't doing it in ways that are making it more and more difficult to ordinary people to be able to drive their car back and forth to work, feed their family, all of the things that people are having a difficult time doing in this country today?"  
------------------------------------------------------------------------------------------------------------ April 18, 2008 -- Keynote Address at Levy Economics Institutes of Bard College

Congressman Hinchey: "I believe, and I have believed for some time now, that we are in a recession. In my opinion, the only questions that we need to answer are how far, and how deep are we in this recession and how long will it last. To be honest, I do not think it would be a stretch to say we may be on the verge of a depression. Many of the economic and financial circumstances we are facing right now are similar to circumstances we faced in 1929."

Posted in Committee Hearings | View Full Posting


Maurice to appear on FOX News at 4 p.m. 09/26/08
Posted by: Hinchey Press Office (09-26-2008, 02:36 PM)

Congressman Hinchey is expected to appear on FOX News at approximately 4:00 p.m. EST to discuss the financial rescue that Congress is currently negotiating.

Posted in Media Appearances | View Full Posting


Hinchey Questions Federal Reserve Chairman Bernanke at 10 a.m. Today
Posted by: Hinchey Press Office (09-24-2008, 10:04 AM)

Congressman Hinchey will be questioning Federal Reserve Chairman Ben Bernanke at a Joint Economic Committee hearing today at 10:00 a.m.  The hearing is to discuss the economic outlook.  Click the link below where you will find the live stream:

Posted in Committee Hearings | View Full Posting


Listen in to Maurice's live interview with Tony Russell at 10:30 a.m. 8/7/08
Posted by: Hinchey Press Office (08-07-2008, 09:56 AM)

Maurice will be live on the air with Tony Russell at 10:30 am for approximately two hours to discuss issues of the day.  He will be taking call-ins from listeners.  Click here to tune in.

Posted in Media Appearances | View Full Posting


Maurice to appear on FOX News around 4 p.m. 7/16/08
Posted by: Hinchey Press Office (07-16-2008, 03:42 PM)

Congressman Hinchey will appear on FOX News at approximately 4 p.m. to discuss the need for another economic stimulus plan. 

Posted in Media Appearances | View Full Posting


 

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