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Washington, D.C. – Congressman Pete Visclosky made the following statement today in the U.S. House of Representatives on the Emergency Economic Stabilization Act, which lost by a vote of 205 - 228. Visclosky voted against the bill:
“Madam Speaker, in 1991, when Congress was considering repealing the Glass-Steagall Act and its regulatory framework, Representative John Dingell stated that repealing the Glass-Steagall Act would usher in a ‘golden age of thievery.’ Mr. Dingell has been proven correct.
“As recently as September 15, President Bush was saying that ‘Americans have good reason to be confident in our economic strength,’ and that ‘We have a flexible and resilient system that absorbs challenges and makes corrections and bounces back.’ Henry Paulson was saying that the current turmoil in markets and financial institutions ultimately would ‘make things better.’
“Now suddenly, we have a crisis. The Bush Administration would have us believe that this crisis is a sudden accident of nature, that it just happened, and could not have been prevented. This crisis is not an accident of nature. The stage was set for this crisis with the repeal of Glass-Steagall in 1999, but this crisis is not the result of a single error in policy. It is the direct result of years and years of deliberate and cynical exploitation by the captains of an unregulated industry, aided and abetted by an Administration that has willfully failed to enforce our laws and regulations, and that has selected individuals from the very institutions that need oversight to watch over their friends and former colleagues. This crisis is what happens when you set the foxes to guard the henhouse for 8 long years.
“Now we are being asked to solve this crisis that has been building for most of the last decade in 7 days. But is the solution being foisted on us really going to help Main Street? Or is it simply meant to clean up Wall Street’s mess, cloak the Bush Administration’s abysmal failure to protect the people of this country from financial predators, and further enrich those whose covetousness has caused this problem? Is it going to help the people we represent, or is it going simply add to the profits of foreign banks?
“Additionally, the Washington Post of September 27, 2008, reports that the six largest banks in the world are going to emerge from this crisis even larger than before. But what about the small community banks that have been following the rules and dealing fairly with borrowers, and who will bear the brunt of the financial dislocation caused by irresponsible financial giants? Why are we leaving our smaller banks to fend for themselves, while bailing out foreign banks? Why does the Royal Bank of Scotland, with $3.5 trillion in assets, need welfare from the American taxpayer?
“The Bush Administration is rushing us into spending $700 billion without stopping to think things through, because there just isn’t time for thinking. They say, trust us, this is necessary.
“I’ve heard this before.
“To me it sounds like what we were told about Iraq: that we had to go to war right away, because of the Weapons of Mass Destruction that Saddam Hussein possessed. Oh, that’s right, they didn’t exist. We were told ‘Trust us.’
“It sounds like what we were told when we had to pass the Patriot Act immediately to allow the government to eavesdrop on our private communications and to get the list of books you checked out of the library without probable cause; because there was a risk of terrorism. We were told that we had to fall in line quickly and trust the President.
“Now it’s ‘trust us’ again. I didn’t then, and I don’t now!
“What about the people we’re supposed to be protecting? Contrast the President’s urgency to help the minions of Wall Street with his disdain for the most vulnerable members of society: our children. During the last two years we asked President Bush to help provide health insurance to 4 million additional children in our country. He refused to do so-- twice--but now he says we have to bail out 4 million brokers in 7 days.
“Where was the bailout when real people, the people I am here to represent, experienced financial crisis?
“When LTV went bankrupt and thousands of people lost their jobs, President Bush didn’t sound the alarm. All I know is that Richard Fuld of Lehman Brothers made $34,832,036 last year.
“When many Bethlehem Steel retirees had their pensions cut, did President Bush provide a helping hand? All I know is that when Stan O’Neal retired from Merrill Lynch, his compensation package was worth $161.5 million.
“When National Steel went bankrupt, did this Administration ask for a bailout? All I know is that Freddie Mac’s Richard F. Syron made $18,289,575 in 2007.
“When Republic Steel went bust under this Administration, they ceased to exist. On the other hand, AIG ceased to exist after a federal bailout, and no one asked Martin J. Sullivan of AIG to give back the $14,330,736 he was paid last year.
“Let us also look ahead. This year, we are projected to have a deficit of $407 billion, on top of our national debt of $9.68 trillion. Our Inland Waterway Trust Fund will be broke by June of next year. Our Highway Trust fund needed an infusion of $8 billion this year because it was out of money. Medicare is slated to be insolvent in 2019. Today we’re being asked to provide the titans of Wall Street $700 billion that we will have to borrow because no one wants to pay for it. Think of our poor children, and I mean that literally. And think about the next administration that will have to live with the consequences of this Wall Street bailout for its entire term.
“It is clear that the problems in our current financial system are not temporary aberrations in an otherwise healthy system, and will not be easily addressed with a one-time infusion of cash. I know that I am not alone in saying this. On September 25, 2008, 200 independent economists who don’t work on Wall Street, who don’t work for the Federal Reserve, who don’t work for the US Treasury, signed a petition stating that this plan could create perverse incentives, that it is too vague, and that its long-run effects are unclear. Gary Aguirre, a former employee of the Securities and Exchange Commission, points out that as much as half of the $700 billion could be wasted if there is not careful oversight over the valuation of the bonds we would be buying, resulting in a $350 billion gift to Wall Street.
“Now, these economists and Mr. Aguirre may be wrong too, but they have a lot more veracity with me than the supposed experts promoting this bailout plan, who are from the same institutions that created this mess in the first place.
“Given the gravity and systematic nature of our problems, and given the lack of information with which we have been provided, I believe that Congress should be deliberate and conduct a comprehensive examination of alternative solutions.
“Chairman Dingell was right: We are now in the golden age of thieves. And where I come from we put thieves in jail, we don’t bail them out. We should reject this proposal.” |
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