American Economy

AMERICAN ECONOMY -- (House of Representatives - September 17, 2008)

Ms. KAPTUR. Mr. Speaker, Wall Street's big banking boys, those self-proclaimed geniuses of high finance, are bankrupting America. These plunderers of our economy who have fought tooth and nail against financial regulation now are running home to mama. They who virulently oppose government oversight in the markets have come begging to the U.S. Government, mama, to bail them out of their bad decisions. They want mama to make it all better.

Well, mama, the Federal Reserve and the Treasury, now run by Wall Street's best friends, have happily been shelling out from our taxpayers more than $300 billion already and counting for those irresponsible Wall Street giants. Meanwhile, homeowners in my district are suffering as a result of these high flying bankers' self-aggrandizing decisions.

I've not seen Secretary Paulson or Chairman Bernanke running around Ohio over the weekend, expressing concern about working people's houses and about helping them work out troubled loans. No. All they're doing is sending those folks the bills.

The first check that mama wrote was in March. The Fed's main role in the Bear Stearns buyout by JPMorgan Chase was a $29 billion loan to a corporation it created to buy $30 billion worth of assets from Bear Stearns. If the assets gained value, the Fed would profit. If the assets lost value, the first $1 billion would be lost by JPMorgan Chase, but the rest of the losses would be borne by--guess who?--the American taxpayer.

Then mama wrote a blank check, a big one, to Fannie Mae and Freddie Mac. Now, that bill is already $200 billion, and it could rise to $2.4 trillion, a blank check. Last year, the head of Freddie Mac earned compensation of $18.3 million, and Fannie Mae's chief, David Schmidt, received $11.6 million directly, not counting all of their other bonuses and stock options and who knows what else.

Now mama has written a third check for the crisis on Wall Street, and has effectively nationalized American International Group today with an $85 billion loan.

I wonder why we don't just change the name of the U.S. Treasury to the Sovereign Wealth Fund, because we are borrowing money from other countries in order to bail out these institutions.

By the way, from 1999 to 2004, the CEO of AIG, Maurice ``Hank'' Greenberg, was named to Forbes Magazine as among the ``world's richest people,'' with a net worth in 2004 of $3.6 billion. What a cozy group they have up there on Wall Street.

The CEO named earlier this year, Robin Willumstad, had been the president of Citigroup since 2002, and his base salary was $1 million, plus up to $4 million to $8 million in targeted annual bonuses, plus $13 million targeted annual incentive pay and a one-time $24.5 million restricted stock award to vest over 4 years.

Were our homeowners to get a deal like that. The American people are truly getting bilked. They didn't get a fair share of the upside, and they are getting all of the downside and a huge IOU. Foreclosures are going up in Ohio. And while Wall Street is made whole, the folks back on Main Street are losing their homes and getting the bill.

So while the banks get to run home to Mama and they are crying, we really have to ask ourselves, what has Mama given us here? What does it say about our values when we pump hundreds of billions of dollars into preserving Wall Street's bad boys while ignoring the plight of the American people?

Across Main Streets, from coast to coast, people are losing their homes. But are Mr. Paulson or Mr. Bernanke giving them any bet on the upside? They are not even helping them on the downside. All they are giving them is a bill for Wall Street's excesses. When Roosevelt talked about malefactors of wealth, boy, was he right.

I feel sorry for our country, I feel sorry for this Congress, that we can't do a better job of standing up for the people today who are losing their homes in Ohio. Thirty-eight thousand more perched at the edge. Our State needs $20 billion just to do workouts in our State. Where is the Federal Reserve? Where is the Treasury Department? Why do they only help the rich people? What about the rest of the people who have to work for a living?

I can't think when I have been as upset as I am tonight about what is happening by the big shots, and the people who are paying the bill are getting shoved off the edge.

Wake up, America. Wake up, America. Pay attention to what is happening here. Contact your Member of Congress. Every citizen of this country that is a taxpayer and every citizen who owns that home mortgage has a right to a decent life, not just the big shots up at the end of Wall Street up in New York City.

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