[Congressional Record (Bound Edition), Volume 155 (2009), Part 19]
[Senate]
[Pages 25629-25630]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     WALL STREET NARROW-MINDEDNESS

  Mr. REID. Mr. President, the global economic crisis is very 
complicated. It was born of both brazen, unabashed abuses and elaborate 
schemes alike. It brought complex concepts such as ``mortgage-backed 
securities'' and ``credit default swaps'' and ``derivatives trading'' 
into our everyday vocabulary. Prior to this financial meltdown, rarely 
did we hear the words ``mortgage-backed security,'' ``credit default 
swaps'' or ``derivative trading,'' but now they are in every newspaper 
we read. They are all over the television, all over radio. But when we 
peel back all the layers of this crisis, its foundation is nothing more 
than a simple concept: greed. When we cut through to the root causes of 
why so many families are hurting and why so many businesses are 
suffering, the core elements are evident: Excess, irresponsibility, and 
reckless risks.
  Wall Street ran wild, then it ran out of steam. Last year's emergency 
required an urgent dose of medicine, and we supplied it. Our entire 
national economy was on the brink. Our entire world economy was on the 
brink. Our swift action prevented a terrible situation from getting 
even worse. For the past year, we have continued to act in strong, 
sensible, and prudent ways. We taxpayers did what we needed to do to 
help keep the economy afloat and didn't ask much from Wall Street in 
return. We would have gladly accepted a simple ``thank you.''
  So one can understand America's disgust upon realizing in recent days 
that Wall Street has ignored the lessons of last year. Reckless Wall 
Street traders continue to write themselves checks for billions of 
dollars--much of it our dollars. The Wall Street Journal found that 
major banks and securities firms are going to pay their employees $140 
billion this year. That is a record high, and 20 percent more than last 
year. But the greed is evident not only in salaries; it is in bonuses 
and other benefits also. The Washington Post reported that the Nation's 
biggest financial firms, including the firms that took nearly half the 
emergency TARP money, are actually increasing the perks they are 
handing out to their employees this year.
  Here is what is happening on Wall Street today: CEOs are giving their 
traders huge incentives--usually cash bonuses--to swing for the fences 
and make deals that put their entire firms and the larger system at 
risk. That is the height of irresponsibility. It is the height of 
arrogance. Risky bets on exotic securities are precisely what sparked 
the financial crisis and fueled the housing crisis. These events 
devastated Nevada and many other States.

[[Page 25630]]

But that same carelessness continues, I am sad to say, on Wall Street 
today. A gluttonous glorification of the bottom line led to the credit 
crisis that has led so many hard-working families into bankruptcy and 
worse. But that same narrow-mindedness continues to guide financial 
firms today. Short selling and shortsightedness--rewarded with 
stratospheric salaries and bloated bonuses--contributed to a shameful 
culture of excess. Yet that same greed continues today.
  A bonus that dwarfs an average American worker's entire annual salary 
is excessive. Doing so in a way that threatens our economy is 
dangerous, wrong, and a slap in the face to the American people. Main 
Street jobless rates and Wall Street bonuses should not rise at the 
same time. Seniors who rely on Social Security should not be 
shortchanged while the traders who threaten our economic security are 
rewarded. Taxpayer money that was supposed to keep our economic pillars 
from collapsing should not go directly from your savings to a brash 
broker's pocket.
  If the executives who designed these windfalls came out of their 
corner offices, they would see how badly Americans are suffering. They 
would see how offensive these paydays are. They would see how 
desperately hard-working families are struggling to hold on to their 
jobs, to their homes, and to health care. And they would be ashamed.
  We must put an end to the recklessness that got us into this mess. We 
cannot accept more of the same.
  Last week, the Treasury Department announced that it would reasonably 
limit the excessive paychecks of the top executives at companies in 
which you and I and every American now own an equity stake. I support 
that plan. Then the Federal Reserve announced it will rein in banks 
that reward the riskiest practices--gambles that endanger all of us. 
They should be reined in. I support that too.
  In the near future, we will reform our financial industry through 
legislation commonly referred to as regulatory reform. We will make 
sure banks are compensating their employees in a prudent way. That 
means firms won't be able to throw cash at a trader who closes a big, 
risky deal--one that puts the whole bank at risk and that threatens 
taxpayers and the greater financial system as well.
  The Treasury, the Fed, and the Congress will play their parts. 
Regulation has its role, but I have never believed government is the 
answer to everything. That is why Wall Street has to take 
responsibility for its own actions also.
  This industry, more than any other, knows the importance of sending 
signals. The stock market hinges on hints, the trading floors run on 
rumors, and these public companies live and die by the confidence they 
instill, the impressions they inspire, and the messages they send. So 
these firms--whether or not they owe the government for their 
survival--should be careful about what their actions say about them 
because the American people are listening closely. Greed got us into 
this mess; it will not get us out. If we are going to continue to 
recover and ultimately prosper, this perverse culture and destructive 
behavior cannot continue. How many more times must we learn the same 
lesson?
  Mr. President, I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.

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