[Congressional Record (Bound Edition), Volume 156 (2010), Part 8]
[House]
[Pages 11424-11425]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  THE ECONOMY AND OTHER CURRENT ISSUES

  The SPEAKER pro tempore (Mr. Carson of Indiana). Under the Speaker's 
announced policy of January 6, 2009, the gentleman from Missouri (Mr. 
Akin) is recognized for 60 minutes as the designee of the minority 
leader.
  Mr. AKIN. Thank you very much, Mr. Speaker. I appreciate a moment 
here to get our charts lined up and to talk about a subject that we 
have been talking about for some time but which is very much on the 
minds and hearts of people in America, and that is the situation of 
jobs, the economy, and the condition of our solvency as a nation, and 
the challenges to leadership and the way forward.
  Now in order to try to get a perspective on where we are, it's 
helpful to look back a little bit and to see where we have come from. 
Those of us perhaps who have been paying a little attention to what has 
been going on over the last couple of years, there have been some 
changes, changes of a recession that has come, changes in terms of 
unemployment, people having trouble making their mortgage payments, 
people having trouble keeping or getting jobs, and also a sense that 
the economy is not all that it should be. These things didn't happen 
just by accident. They were a result to a large degree of government 
policy. Many of the problems that we are experiencing actually were 
caused by decisions that were made right here in this Chamber, and some 
of those decisions now turn out to be not wise at all.
  I would like to go back a number of years to part of what created 
this entire real estate bubble which then collapsed our economy and put 
us in the condition that we are now. I hope to conclude with some very 
positive suggestions as to what we have to do to go forward. America is 
not in someplace that we haven't been before. We're not in over our 
head, but we're getting close to it. There are things that we can do to 
mediate and to take care of some of the problems that have been 
created, but we must act decisively and we're going to have to act 
immediately.
  Going back a little bit, it became popular over a couple of different 
administrations to allow people who couldn't really make their mortgage 
payments to get mortgages to buy houses. So what we did was we created 
a law that actually said to bankers and to people who were going to 
give people home loans that you have to give loans to people who can't 
afford to pay some of them, or who may be a bad credit risk would be a 
better way to state it. And so we had these laws saying that a certain 
percent of loans have to be given to people who were bad credit risks. 
Over a period of time, what happened was those percentages were 
increased. In President Clinton's last year in office, they increased 
those percentages up. In the meantime, the economy had a series of 
different things that occurred with Greenspan creating a great deal of 
liquidity because of the recession in 2000-2001. So what you had was 
this real estate bubble where a lot of people were putting money into 
houses, the housing prices were going up rapidly, everybody was 
flipping these home loans and making lots of money. As long as the 
music continued to play, everybody was happy. When the music stopped, 
there were a lot of people without chairs to sit down in. Well, this 
tremendous bubble that ended up bursting in the home mortgage area was 
not something that took everybody by surprise. Many people took 
advantage of it. Many people were hurt very badly by it. But it was not 
something that people didn't understand was going on. In fact, on 
September 11 in 2003, which goes back quite a number of years now, 
President Bush saw this coming; and so he is recorded here in the New 
York Times, not exactly a conservative oracle, saying that ``the Bush 
administration today recommended the most significant regulatory 
overhaul in the housing finance industry since the savings and loan 
crisis a decade ago.''

                              {time}  1830

  What the President wanted was more authority to regulate Freddie and 
Fannie because he saw that Freddie and Fannie were out of control. But 
that's not such an easy thing to do to control Freddie and Fannie. They 
were quasi-private agencies that were loaning money like mad to people 
that wanted to buy houses. The trouble was they had just lost a billion 
here or there, so things weren't going quite right for Freddie and 
Fannie.
  But Freddie and Fannie had a way to fight back. They had many, many 
lobbyists in Washington, D.C., and they gave lots of money away to 
Senators and other political people. So the President is asking for 
authority to control Freddie and Fannie. The President got the bill 
through because Republicans controlled the House at the time, got a 
bill through the House, it went to the Senate. But because the 
Republicans did not have 60 votes in the Senate, the bill was killed by 
the Democrats in the Senate.
  In the meantime, the congressional Democrats disagreed with the idea 
of regulating Freddie and Fannie more. And of course Congressman Frank, 
who is now the one in charge of this committee, saw it very different 
than President Bush did. He said, these two entities, Freddie and 
Fannie, are not facing any kind of financial crisis. The more people 
exaggerate these problems, the more pressure there is on these 
companies and the less we'll see in terms of affordable housing. So he 
did not want to regulate Freddie and Fannie. He didn't see a particular 
financial problem; he said they're just fine financially. This is the 
same article, New York Times, September 11, 2003. Of course as it turns 
out, through the eye of history we can look back and say of course 
Congressman Frank was completely wrong and President Bush was right; we 
should have done something about Freddie and Fannie.
  So you start to get this real estate collapse and mortgage problem. 
So the economy starts to go down and a lot of people blamed President 
Bush for it. But anyway, the economy starts going down, it's because of 
this congressional policy of allowing these mortgages to be made to 
people who couldn't afford to pay. What happened was of course Wall 
Street took them, chopped the mortgages up into little pieces, packaged 
it all up into these mortgage-backed securities and sold them all over 
the world. The whole crisis was compounded by the different ratings 
agencies like Standard & Poor's and Moody's, giving them all Triple A 
ratings--in fact, these things were not Triple A at all; they were a 
lot of trouble waiting to happen.
  So the real estate crisis then drug the rest of the financial market 
into trouble, along with some accounting rules that were so rigid and 
strict that they couldn't deal with the situation that occurred. 
Following that, of course, President Obama is elected and the economy 
is going down. And so he proposes a series of solutions and things that 
hopefully are going to make things better. Part of his solution, of 
course, was a whole lot of taxes and a whole lot of spending.
  And so his policies started out, first of all--actually, it started 
out with the stimulus package. The stimulus package was one of these 
things that were supposed to help us get some jobs. He told us what we 
were going to do with the stimulus package, we were going to spend--it 
was originally $787 billion, but as it turned out it was $800 billion 
in the stimulus package. And here's what was said by the President 
about it. Our stimulus plan will likely save or create 3 to 4 million 
jobs. Ninety percent of these jobs will be created by the private 
sector, the remaining 10 percent mainly public sector jobs.
  So this looked like a pretty good deal. We were told if you don't 
pass the stimulus bill, what's going to happen is you may get 8 percent 
unemployment if you don't pass it. And so because the Democrats were 
totally in charge, we passed it. The Republicans all voted no. We had 
seen this before. It was not even a legitimate stimulus package. It was 
a whole lot of big spending on a lot of giveaway government programs, 
but it was not going to do anything to improve the economy, we 
believed. Now

[[Page 11425]]

we've had a chance to see how did that $800 billion go? Well, it went 
to pay the pensions of a lot of States that had been irresponsible and 
had not managed their pensions properly.
  And so now we've seen how that worked. Well, the private sector has 
lost nearly 8 million jobs since 2008. The government has gained 
656,000 jobs--mostly the census-type jobs--and there was very, very 
little job creation in the private sector. Well, is it because 
Republicans were such wizards that they could figure out it wasn't 
going to work? Well, no, we just know something about history. In fact, 
we would have hoped that the Democrats might have learned from history 
from the days of FDR, who took a recession and turned it into the Great 
Depression.
  These are the comments from a Keynesian economist in a way, he was 
somebody that was about the same time period historically as Little 
Lord Keynes. His name was Henry Morgenthau, he was FDR's head of 
Treasury. He said, We have tried spending money. We have spent more 
money than we've ever spent before--this is after 8 years of the 
Federal Government spending lots of money--it doesn't work. I'd say 
after 8 years of the administration we have just as much unemployment 
as when we started, and an enormous debt to boot.
  So, so much for the stimulus bill. It wasn't even FDR kinds of 
concrete and asphalt types of pork; a lot of it was just giveaways to 
various States that had mismanaged their budget. So that's what 
happened. So we could have learned. And the Republicans did know that 
the stimulus bill didn't work, we didn't vote for it. And what was the 
result of it? Well, we should have learned at least from Henry 
Morgenthau because here's the results. This is when the stimulus bill 
was put in. It was projected that we're going to have unemployment 
going down. If you pass the stimulus bill, it's going to go down here; 
if you don't pass it, it may get up to 8 or 9. In fact, we passed the 
stimulus bill, it gets to 9.7.
  If you take a look at the other graphs--I don't know that I have that 
graph here today--what you find is that the employment in the private 
sector has been going steadily down and the government employment has 
been going steadily up. So, so much for the first step of economic 
policies in the administration. That was followed, of course, by all of 
these different nifty big tax increases. Now, that says something's 
wrong when you have a recession and you're doing tax increases.
  I'm joined in the Chamber tonight by a fellow that is very aware of 
how these things interact, has done a fantastic job for his district, 
and I'd like to invite him to join me in our discussion tonight, 
Congressman Scalise, please.
  Mr. SCALISE. I'd like to thank my friend from Missouri for leading 
tonight's discussion about the economic problems that we're facing 
today in our country. And of course, as you showed those comments from 
Henry Morgenthau, who was the Treasury Secretary under FDR, who in fact 
not only pointed out the problems of the massive spending back then, 
but really was kind of prescient because some of the things he talked 
about back then are still as relevant, if not more, today because he 
predicted the problems, he discussed the problems of government 
spending and spending and borrowing and borrowing with no results, and 
in fact with detrimental results because of the damage it's done. And 
of course here we are today seeing the results of that same failed 
policy of history, unfortunately, repeating itself.
  Mr. AKIN. We just didn't learn.
  Mr. SCALISE. And of course those who are running things right now--
the liberals who are not only in the White House, but here in 
Congress--have not learned the lesson of history. And there is that 
saying that if you don't learn from history, then you're doomed to 
repeat it. Unfortunately, we've been trying to prevent history from 
repeating itself, and yet we're seeing that happen right now.
  I represent southeast Louisiana, and of course we are battling this 
devastating oil disaster----
  Mr. AKIN. Maybe I should just interrupt for a moment and recognize, 
gentleman, you have really studied up on the whole oil spill situation 
and shown tremendous leadership there. I'm very thankful for the fact 
that you have stepped into what appears to many Americans and many 
conservative Congressmen as a leadership vacuum. You have really 
stepped in, and I'm very thankful for you doing that. I would encourage 
you to make the connections here.
  Mr. SCALISE. I thank the gentleman for his kind comments. All I've 
been trying to do is not only represent the people of my district and 
my State, but also to make sure that the President is meeting his 
responsibility under the law. And of course under the law in this case, 
with the Oil Pollution Act, the President himself is responsible for 
directing the recovery, and the responsible party, BP, is responsible 
for paying.
  BP ought to be paying. The problem is the President is allowing BP to 
still run the show on the ground in too many different areas, which is 
not his job. And now something that has really added insult to injury 
is that the President came out a few weeks ago with this ban, this 
moratorium on offshore drilling across the board, not focusing on 
finding out what went wrong on that rig, why the Horizon exploded--and 
we still continue to battle this oil today. In many cases our local 
leaders tell me, including just yesterday, our local leaders are 
spending more time fighting the Federal Government than fighting the 
oil, which is inexcusable, and it's still going on to this day.
  Mr. AKIN. Could you hold that right there for a minute because I 
think you're on something that I think we ought to be exploring a 
little bit here tonight, but we do have an item of business.
  I yield to the gentleman from New York (Mr. Arcuri).

                          ____________________