[Congressional Record (Bound Edition), Volume 156 (2010), Part 5]
[House]
[Pages 6376-6377]
[From the U.S. Government Publishing Office, www.gpo.gov]




               IT'S TIME TO CUT WALL STREET DOWN TO SIZE

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Oregon (Mr. DeFazio) for 5 minutes.
  Mr. DeFAZIO. Well, as I speak here on the floor of the House, the 
Republicans on the Senate side of the Hill are still blocking 
meaningful financial reform, protecting their patrons on Wall Street as 
they always do, and the lords of Goldman Sachs are before a committee 
protesting their innocence.
  Now, we all know that Goldman and these other firms on Wall Street 
were too big to fail, or at least some think they were--I think we 
should have let a few more of them fail, personally, and I opposed the 
bailout of Wall Street. But let's just say they were too big to fail or 
at least they were deemed too big to fail and they were bailed out by 
the United States Government and the taxpayers of the United States, 
but something else was going on at the same time.
  Not only were they too big to fail, they had created wonderful, new 
financial products that were enriching them in unbelievable ways, 
making millions of dollars a day for the lords of Goldman and elsewhere 
on Wall Street. They had designed products that were designed to fail. 
Then they sold them after they went to the all-too-willing ratings 
firms, so-called ``impartial'' ratings firms.
  Goldman would pay Moody's to rate garbage as caviar, AAA. Then they 
would go out and sell it to sophisticated investors who should have 
known better. I mean, come on, they should have looked at it more 
carefully. I mean, well, yes, they did kind of mess around with it and 
they did get the people at Moody's by threatening to take away their 
business, to rate the garbage as caviar, but those other people should 
have smelled it and known really it was garbage. And, I mean, what's 
wrong with that?
  And then of course, Goldman just did happen to place some bets of its 
own against the garbage--which they had created and knew was garbage, 
and they bet it was garbage--and they won, making billions of dollars 
for themselves and others who were in on the know here. This is a 
pretty rotten system.
  Now, you could say, well, gee, but aren't they doing things like 
investing in capital? Aren't they building a great America? No. The 
financial services industry has gone from 19 percent of the profits in 
this country to 41 percent, and for the most part--outside of community 
banks and some people who still actually do banking, unlike most of 
those companies on Wall Street--they produced no value. They created a 
heck of a lot of wealth for themselves and others, and occasionally 
they caused the economy to explode and cost us millions of jobs.

[[Page 6377]]

  But they're still doing very well for themselves and now they're back 
to business as usual. And the Republicans in the Senate are defending 
``business as usual'' under the guise of wanting to have a better bill 
that won't encourage bailouts. I mean, this is all such a laughable 
farce. It would be funny except for the unbelievable pain it has caused 
to the real economy of this country who have been suffering for years.
  It's time to cut these people down to size, cut them down to size by 
prosecuting them. I have been joined by 59 of my colleagues, and Elijah 
Cummings and I have sent a letter to the SEC saying, look, you've 
uncovered one case of alleged fraud by the Securities and Exchange 
Commission where they knowingly sold a bad product to investors and 
then they bet against it themselves. There were a number of others that 
went through something called AIG, which the Federal Government also 
bailed out at the cost of $180 billion to taxpayers. We want every 
transaction between Goldman and AIG scrutinized to see whether or not 
any of those were similarly fraudulent transactions, in which case we 
could get a few billion dollars back from the lords of finance to the 
taxpayers on Main Street, USA.
  It is long past time to begin these kinds of investigations and 
hopefully, ultimately--like with Enron, because this is worse than 
Enron--prosecutions. And we will let some of them enjoy some Federal 
hospitality for a few years.
  This is absolutely outrageous. They're creating products designed to 
fail, that have no useful product, in fact robbing capital from 
companies who want to invest, who actually want to make things, who 
actually would employ Americans and who would enhance our economy, all 
for them to gamble on Wall Street. It's time for the gambling to stop.
  You know, in a regular casino, if the casino goes broke, it's only 
the gamblers and the casino that have a problem. In the casino of Wall 
Street, when they mess up, they destroy the real economy of the United 
States and people's livelihoods. It's time to cut them down to size.

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