[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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