[Congressional Record Volume 156, Number 101 (Thursday, July 1, 2010)]
[House]
[Pages H5495-H5496]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         THE PROGRESSIVE CAUCUS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentleman from Georgia (Mr. Johnson) is recognized 
for one-half of the time remaining before midnight, approximately 17 
minutes, as the designee of the majority leader.
  Mr. JOHNSON of Georgia. Mr. Speaker, ladies and gentlemen out there 
in TV land, I could not go to sleep tonight until I got off my heart 
what has been on it, particularly over the last few days. What's on my 
heart is such pain and empathy for the people of this country who want 
to work but can't find a job, people who have worked all of their lives 
only to be caught victimized by the financial meltdown that took place 
in October of 2008.

                              {time}  2330

  The biggest downturn since the Great Depression. Eight million jobs 
lost. Those are real jobs affecting real people, affecting their 
children, affecting their parents and grandparents; people who had been 
accustomed to being a part of the middle class and now they find 
themselves out of a job, out of work for an extended period of time.
  And, by the way, I must tell you that this portion of today's 
proceedings is a Special Order of the Progressive Caucus.
  And so these 8 million jobs were caused--or the loss of these 8 
million jobs were caused by the shenanigans on Wall Street. There was 
an endless, or what must have seemed like an endless party for the Wall 
Street crowd. Stocks, bonds, dividends. They couldn't be happy just 
with those profits. They had to come up with other ways of making 
money. They came up with these hedge funds that enabled someone to sit 
at a computer without producing anything and make money just by buying 
and selling various security instruments.
  And those secured instruments or instruments of securities--or 
securities--were largely the product of these 8 million people who lost 
these jobs. Largely, those securities were generated on the backs of 
the middle class people who had used their money, used their earnings, 
used their savings to buy a home, and they bought a home. Oftentimes, 
they were steered into what we call a predatory loan, which is nothing 
more than a high-cost loan, a loan with exorbitant costs. And these 
loans were primarily directed to minority communities. And once those 
targeted communities had been saturated with those predatory high-cost 
loans, then that industry turned its attention to another vast market 
untapped. It was middle class America, all over America.
  And all of these high-cost loans were packaged together and sold as 
securities on Wall Street. These loans featured such attributes as no 
money down or low downpayments. Sometimes no documents required or a 
no-doc loan. They had adjustable rates, adjustable mortgage rates. They 
had other features like clauses that prevented you from refinancing 
without suffering a penalty. These high-cost loans, once the requisite 
amount of time had gone by, then the loans would be adjusted upwards. 
And when that adjustment was made, the people found out that they were 
unable to meet those new monthly payments. And so, therefore, they 
would simply refinance, pay another yield spread premium, stripping the 
equity from their property and giving it to the mortgage broker in 
return for placing them in another predatory loan.
  And everything was going fine, these high-priced loans packaged as 
securities being sold on Wall Street, or being sold by Wall Street to 
entities and people throughout the world. And it was all based on the 
rising home values that everyone just assumed would continue to go up.
  But at some point, people started defaulting on those high-cost 
predatory loans all across this Nation. And when that happened, the 
people who had purchased the securities that were backed by those now 
unperforming loans realized that they had worthless paper in their 
hands, and so it became a run on the bank.
  Now, keep in mind, these people and entities that had bought or 
purchased these securities had also purchased insurance from AIG to 
make sure that, if the security ended up becoming useless, then AIG, 
like an insurer should, would pay them for that loss. And so AIG was 
put in a perilous situation.
  And so what happened there, then it became a bailout situation. Are 
you going to let AIG fail along with all of these other investment 
banks which were steeped heavily with these toxic securities?
  So, along came the Bush plan to restabilize the economy through the 
Wall Street, the notorious Wall Street bailout, $700 billion. And you 
would think that the banks would have used that money to lend to 
smaller banks, the Wall Street banks would have used that money to lend 
money to the smaller banks, and those smaller banks then could use that 
money to lend to small businesses and to large businesses as well; and 
in that way, we would have had more job creation to try to put a dent 
in this 8 million jobs lost. But no, they did not do that.
  What did those Wall Street banks do? They didn't loan money to small 
businesses to expand and hire new workers. And, in fact, in 2009, total 
lending by U.S. banks fell 7.4 percent, the steepest drop since 1942. 
Now, keep in mind, they just got $700 billion in October of 2008. 2009, 
total lending fell 7.4 percent, the steepest drop since 1942. And the 
22 firms that received the most bailout money cut small business loans 
by $12 billion in 2009.

                              {time}  2340

  Meanwhile, the top 38 largest financial firms gave out $145 billion 
in taxpayer money, in record pay, to their employees--this was in 
2009--and an 18 percent increase in pay for their employees over 2008. 
In the first 3 months of 2010, four of the leading financial firms, 
including Goldman Sachs, reported profits of $14 billion.
  It is time for that money, ladies and gentlemen, to be returned to 
Main Street. What Wall Street has done is taken that money that should 
have been invested in Main Street to create jobs for the American 
people. Instead, they took that bailout money, and they gave record pay 
to their employees--$145 billion in the year 2009. Nobody is crying 
about that. Everybody is crying about the deficit. Nobody is talking 
about job creation.
  Are you a job creator, or are you a deficit reducer? What is most 
important? What would be most important to you? If you are sitting on 
your couch, listening to what I have to say, and if you have heard all 
of the stories about how deficit and spending has to be cut and if you 
know the government is driving us into the ground with deficit spending 
and then if you're sitting there without a job, what is more important 
to you--deficit reduction or job creation?
  I submit to you that, if you are not a job creator, then you are 
barking up the wrong tree as far as what can be done to ease the 
deficit and to eliminate it eventually. You won't do it unless you have 
jobs. You won't do it unless you have an economy based on jobs, based 
on middle class people, based on people going to work every day, 
spending their money purchasing cars, purchasing homes, purchasing

[[Page H5496]]

consumer goods. That's how the economy starts thriving again. It's not 
trickle down, the old Ronald Reagan trickle-down theory, which later 
was called ``voodoo economics'' and which has been in force all the way 
up through this Wall Street meltdown. That trickle-down economics is 
what actually caused this right here.
  So we have got to build our economy from the ground up, not from the 
top down. This $700 billion should have gone to help create more jobs 
from the ashes of that failed economic policy instead ended up going--
where?--right into the pockets of the folks on Wall Street.
  So I am here tonight, ladies and gentlemen, to talk about job 
creation. I am here to try to ease your mind a little bit about the 
deficit, because what is really important is for Americans to go back 
to work.

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