[Congressional Record (Bound Edition), Volume 153 (2007), Part 8]
[House]
[Pages 10862-10863]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 WALL STREET LEAVES MAIN STREET BEHIND

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
  Ms. KAPTUR. Mr. Speaker, tonight the President of the United States 
says he will veto funding for our troops, for veterans health care, and 
even for victims of Hurricane Katrina. He still refuses to work with 
Congress to do what is necessary to resolve the quagmire in Iraq, and 
to win the hearts and minds of people across the Arab and Islamic 
world.
  His policies are breeding terrorism. His policies are forcing higher 
gasoline prices in our country. His policies are forcing the import of 
a billion more barrels of petroleum every year into our country from 
the most undemocratic regimes in the world, and his foreign policies 
are a total failure.
  Meanwhile, here at home, our economy seems to be moving in opposite 
directions at the same time. On Wall Street, things have never been 
better. The stock market has record to all time records. Last week the 
Dow Jones Industrial Average surpassed 13,000 points for the first time 
in history. The Standard & Poors index has climbed at an annualized 
rate of 13 to 14 percent for the first four months of this year. 
Everything's coming up roses for the investment class.
  But it's a different story on Main Street. Yes, it's a different 
story in the real world, where our constituents see gasoline prices 
just challenged the $3 a gallon mark again.
  The stock market might be soaring, but consumer sentiment is in the 
dumper. The Conference Board reported last week that consumers 
confidence fell to its lowest level since last August.
  Economic growth has slowed. The Gross Domestic Product, we learned 
last Friday, increased at a weak 1.3 percent annual rate for the first 
quarter of this year.
  Traders on the floor of the New York Stock Exchange might be 
irrationally exuberant, but families in the Midwest

[[Page 10863]]

are increasingly worried. Chances are, they won't make ends meet this 
time with a home equity loan.
  The National Association of Realtors reported today that sales of 
existing homes fell unexpectedly in March to their lowest level in 4 
years. New construction down sharply in the first quarter of this year, 
and late payments on subprime mortgages increased by 35 percent in the 
first quarter of this year.
  The foreclosure crisis that has hit Ohio and Michigan very hard 
threatens to spread to other parts of our economy. So much is clear, 
the housing bubble has burst.
  Paul Krugman, the economist and New York Times columnist wrote about 
this ``economic disconnect'' between Wall Street and Main Street in 
yesterday's edition. He started by quoting Edward Lazear, Chairman of 
the Council of Economic Advisor who says what's good for corporations 
is good for America.

                              {time}  1830

  And workers will benefit from this growth in productivity. The 
problem with that is it's not true. High profits haven't led to high 
investment. Rising productivity hasn't led to high wages. And I might 
add free trade agreements haven't led to free trade.
  Even the investment banking company, Morgan Stanley, unwittingly 
acknowledged this brutal fact. In a recent newsletter, Joseph 
McAlinden, their chief global strategist, bragged with a laughable 
chart that wages have soared 4 percent at an annual rate. Well, when 
wages soar at 4 percent, barely keeping pace with inflation, what 
happens when you discount for prices? I doubt that if stocks were 
soaring by 4 percent that he would say it is a great thing. I guess it 
all depends on your perspective. Median workers' earnings adjusted for 
inflation have been static since this President took office, and the 
economy feels anything but great to most Americans. They would say, 
``Show me the money.'' The fact is, on Main Street, wages have barely 
kept pace with inflation, and workers, if they are lucky enough to hold 
on to their benefits, have to pay increasingly larger costs for them. 
Meanwhile, corporate profits have more than doubled since 2000. And 
according to Krugman, corporate profits as a share of national income 
reached their highest levels in American history last year.
  That is what happens when productivity increases while wages remain 
static. Corporate profits soar and stock prices follow but not workers' 
wages. Wall Street reaches record heights because companies are turning 
around and reinvesting those profits not in new machinery and jobs, but 
in making more money on our outsourced jobs.
  It is time that Main Street holds Wall Street accountable.

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