[Congressional Record (Bound Edition), Volume 158 (2012), Part 9]
[Extensions of Remarks]
[Page 12947]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        A VOTE AGAINST H.R. 459

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                          HON. EARL BLUMENAUER

                               of oregon

                    in the house of representatives

                         Tuesday, July 31, 2012

  Mr. BLUMENAUER. Mr. Speaker, I voted against H.R. 459 because our 
economy requires an independent central bank, free of short-term 
political pressures. Congress established the twin policy goals of 
maximum employment and price stability for the Federal Reserve, and it 
is important that the institution pursue monetary policy in support of 
those goals independent of political influence.
  Congress conducts regular and robust oversight of the Federal Reserve 
and expanded the Government Accountability Office's audit authority in 
the Dodd-Frank Wall Street Reform and Consumer Protection Act. In that 
legislation, Congress expanded the types of audits GAO may conduct of 
the Federal Reserve and the data that must be shared with the public. 
The Federal Reserve's financial accounts have long been subject to 
audit both by the GAO and an outside, independent audit firm.
  I wish to make clear, however, that the independence of the Federal 
Reserve has no bearing on the scrutiny that Congress must exert over 
the large commercial banks. Roughly four years ago, the banks were 
dragging the American people into a financial storm the like we have 
not seen since the Great Depression. The recession cost $19.2 trillion 
in lost household wealth--40 percent of the net wealth of American 
households. Thirty-one percent of homeowners with a mortgage are 
underwater, owing a bank far more than their house is worth.
  As the magnitude of the rot, the corruption, the shady practices, the 
greed, misplaced institutional incentives unfolded, we experienced a 
near-meltdown of our economy. The second-guessing began even when we 
were in the midst of devising remedies to stop the fall. That 
controversy continues, but we're in the midst of a much larger 
question: ``What is it that we do now to speed the recovery and make 
sure that it never happens again?''
  The crush of special interests and the near constant political 
campaigns places people with limited expertise in the worst possible 
circumstances as they make these decisions. New scandals have continued 
to unfold. The most recent is the LIBOR scandal that we are only 
beginning to unearth, where massive international banks gamed the 
system for their own financial advantage, to stave off regulatory 
action, to avoid a negative market response, or to gain an unfair 
advantage as they placed their own financial bets.
  In response, we must move toward performance-based regulation--
providing greater clarity of what we want and linking those goals to 
clear measures. My acquaintances in the business community with long 
financial expertise suggest that we can start by actually enforcing the 
existing rules and providing the regulatory capacity to make sure they 
are enforced.
  We must give adequate personnel and resources to the existing 
regulatory agencies--the SEC, the CFTC, the FDIC and the Treasury, 
among others--to allow them to better supervise the financial sector. 
Pay them fairly so they are not poached by the industries they 
regulate. In turn, they must prosecute financial felons and send people 
to jail.
  There are people sentenced to prison for years who broke into a home 
or used a gun. But all of these crooks put together have not robbed the 
American public of a third of their wealth the way the financial crisis 
did. It is doubtful that all of the people in all of America's prisons 
have stolen a fraction of the money that disappeared from the balance 
sheet of America's families. But we see continue the fraud, collusion, 
sharp practices, and outright theft in the financial sector that has 
destroyed families, bankrupted businesses, and stunted people's 
futures. The sooner we bring the perpetrators to justice, the less risk 
we are going to have in the future.

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