[Congressional Record Volume 154, Number 149 (Thursday, September 18, 2008)]
[Senate]
[Pages S8967-S8968]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              WORDS MATTER

  Mr. ISAKSON. Mr. President, I want to open my remarks by simply 
stating that words matter. And to the distinguished Senator from Ohio, 
for whom I have the greatest of respect, I gained a lot of concern 
yesterday when I heard the words used in so many speeches given on the 
floor, especially at this disconcerting time, when the American public 
is so worried about our marketplace and our financial markets.
  As Members of the Senate, I think it is very important we be 
conscientious, that we be positive and prudent in every word we use. 
Words matter. We have seen a savings and loan in California fail 
because words got out that there might be a failure and it became a 
self-fulfilling prophecy. We have seen things happen in the economy in 
large measure that were reactions to words that were said which should 
not have been said at all.
  In making that statement, I am going to make a speech about what is 
happening right now on Wall Street and about our role in the Senate, 
and I will remember the admonition I gave that words matter. The words 
I want to use are words that I think are in the best interests of the 
people of the United States, but more importantly of this institution.
  We can't play this historical blame game and set a precedent for the 
cause of what is going on in the financial markets today. We have to 
recognize that we equally, as Republicans and Democrats, have a 
responsibility to work together and to recognize the things we have 
done that have contributed to the problem. And I will give some 
examples.
  One of the problems with the American economy today is the deficit of 
$407 billion, which we will realize at the end of this month when the 
fiscal year ends. Yes, part of that deficit is because we have been at 
war. And had we not gone to war, we might be in the throes of 
terrorism. But that is another debate. But a lot of that deficit is 
about Federal spending. A lot is about the budget process. As Members 
of the Senate, we have yet to take up a single appropriations bill on 
the floor of the Senate, yet in less than 2 weeks, this fiscal year 
will end. I think it is our responsibility at a time of deficit, at a 
time of spending difficulties to get that debate to the floor of the 
Senate and for all of us, Republicans and Democrats alike, to recognize 
we have a role in what that deficit is.
  Secondly, the concerns regarding the financial markets now started 
back in May and June, when oil prices went to $147 a barrel. We are 
within a week, almost a week, of adjourning, yet it is patently clear 
there will be no resolution by Congress to any way forward in terms of 
domestic exploration or dealing with all the other energy issues out 
there. Those are two things that, had we been doing them this month and 
in the months previous, might have helped to ameliorate at least part 
of the concerns on Wall Street.
  So I think all of us, Republicans and Democrats alike, must 
understand that we share part of the blame as an institution, and not 
just as one political party blaming the other. It is time for cool 
heads and prudent minds in the Congress to prevail. Americans are 
concerned. We should not play politics with their future. By way of 
example, the previous speaker brought back the entitlement debate of 
2005 and the challenge of privatization. We must remember today that 
the debate we had was about one of the problems that Congress has 
contributed to, and that is a Social Security system from which we have 
borrowed all of its trust fund and spent all of its money. Because of 
the way we have managed the fiscal house of the United States, we will 
dissipate the trust fund in its entirety by 2043. That is something we 
ought to be addressing. We can have differences on the way to address 
it, but to try to stigmatize a sitting President or a future candidate 
when they were trying to address a problem that we all know exists is 
not the way to deal with these financial difficulties.
  On the question of regulation, I am not so sure it is a question at 
all of needing more regulation as much as it is a question of using the 
regulatory powers that we now have to address some of these problems. I 
will give a couple of examples.
  On Wall Street, within the Securities and Exchange Commission, there 
used to be an uptick rule. And the uptick rule basically was that as 
the market was going up, you could play the market game with 
speculation. But if it was going down, you couldn't short sell it. What 
is happening on Wall Street now is there are a lot of people selling 
short, and they are selling short to the detriment of the American 
people but to the benefit of the individuals themselves. That is part 
of the problem. We should ask the Securities and Exchange Commission to 
look deeply into regulations that worked in the past and see if they 
can't bring back the uptick rule to stop what has been an abuse in 
terms of short selling.
  Secondly, I have said on the floor of the Senate three previous 
times--and I will repeat it today because I believe it strongly, and 
because I think it is more true now than ever before--a significant 
contributor to the problems we

[[Page S8968]]

are facing today is an absence of transparency and accountability on 
behalf of investment banking. The subprime securities that were created 
on Wall Street, and were rated investment grade by Moodys and Standard 
& Poor's, are the fundamental foundation of these financial collapses 
not just in the United States but around the world because those 
securities were bought as capital basis for many of the lending and 
financial institutions.
  As we look to the future, and the recovery which we will see--because 
America always recovers--it is important that we never allow something 
like the securitization of high-risk paper and rating as investment 
grade to ever happen again without some level of transparency and an 
absolute level of accountability on behalf of the institution.
  I want to tell a brief story, only for the purpose of letting people 
know what a small world we live in and how our words matter and the 
consequences to our actions. I traveled to Kazakhstan in August with 
the majority leader, Senator Reid. It was an educational trip of 
immense benefit to me, and I think of immense benefit to the country, 
in terms of what we did. Kazakhstan is a country of 16 million people 
with the largest find of oil in all of Asia. It is a wealthy country 
that built its capital city of Astana from scratch 10 years ago.
  When we landed in Astana and left in a vehicle provided by the 
embassy and drove into town, there were landscaped gardens, beautiful 
buildings, gold-domed mosques--obviously, the best of everything 
because of the wealth they had.
  But I noticed something interesting. I counted 17 buildings, midrise 
and high-rise, partially completed, cranes up, with nobody working. 
When we got to the embassy I asked our ambassador when he said, Are 
there any questions: Is there a holiday?
  He said: No. Why do you ask?
  I said: Nobody is working on all these unfinished buildings. Why is 
that?
  He said: The U.S. subprime mortgage crisis.
  I said: I don't understand.
  He said: The bank of Kazakhstan bought a bunch of the subprime 
securities in the United States, and when Merrill Lynch wrote their 
portfolio down to 22 cents on the dollar, the bank of Kazakhstan did 
the same thing. And when they did, they had to stop funding 
construction and stop funding mortgages.
  If we do not think we live in a small world, if we don't understand 
the consequences of our words and the policies that are initiated in 
terms of our financial products, we have another thought coming.
  Last, I compliment the Congress and use as an example the housing 
bill, where we have the power to address and strengthen our economy. In 
July, this Senate passed, by a vote of what I remember to be 83 to 14--
it may have been slightly different--a bipartisan housing bill that did 
a number of things: It modernized FHA, raised loan limits, provided a 
refinance mechanism for subprime loans rather than foreclosure, but 
also answered the question of Freddie and Fannie and provided an 
opportunity for the Secretary of the Treasury and the Federal Reserve 
to address Freddie Mac and Fannie Mae should those institutions get in 
trouble.
  While we were gone in August they got into trouble. They got in 
trouble in part because of their own doing but in trouble in part also 
because of a lack of confidence. If we had not passed that bill that 
allowed Secretary Paulson to come in and stabilize Freddie and Fannie, 
the source of mortgage money for the people of the United States of 
America, the problems we are experiencing now are nothing compared to 
what would have happened.
  Our actions matter and our words matter. We should be careful to 
understand that in a time of uncertainty in our financial markets and 
of concern by all Americans, rich and poor, Republican and Democrat, 
our words matter. We should work diligently to give people confidence 
in our system of government and our financial system, provide the 
intervention and the appropriate aid while necessary but not 
overregulate or stigmatize a system that has worked for the better part 
of two and a quarter centuries.
  I love this country, and I appreciate the people I represent. I 
suffer as they do today with the uncertainties in the financial 
markets. I hope all of us will commit ourselves to do those things 
within our grasp to see to it that we have a sounder economy, a sounder 
dollar, and a sounder America. Let's do our appropriations. Let's have 
an energy policy that works. Let's look at those positive things that 
have happened in the past on Wall Street that can bring back a level of 
accountability and transparency that are absolutely essential in the 
United States of America.
  I yield the remainder of my time.
  The ACTING PRESIDENT pro tempore. The Senator from Missouri is 
recognized.

                          ____________________