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Wall Street v. Main Street

Floor Speech

By:
Date:
Location: Washington, DC

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Ms. KAPTUR. Mr. Speaker, I rise today to talk about what is nothing less than the largest transfer of the American people's wealth from Main Street to Wall Street. It is likely the largest transfer in American history due to the fallout from the financial crisis of 2008.

Banks at the heart of the crisis all got larger as their CEOs made more money while average citizens saw their incomes stall, or drop, or be eliminated, and while communities across this country were hit hard by their losses. Recently, the Federal Reserve issued a startling report showing that the net worth of the average American family fell by as much as 40 percent in the last 3 years. But I can tell you the banks and speculators at the heart of this crisis that has hurt us all have all done better. It's really startling. The 2010 numbers set families, ordinary middle class families, back by nearly two decades. America's middle class was the hardest hit. Many families saw losses in their retirement savings, they saw their home worths go down, and so many millions lost jobs.

The majority of the damage nationwide was caused by the collapse of the housing market because the largest form of savings that any family actually accumulates is in the ownership of a family's home. According to the Federal Reserve, the median value of Americans' stake in their homes fell by 42 percent--nearly half--between 2007 and 2010 to about $55,000. Those are shocking figures. While we have seen wages stagnate for the vast majority of Americans during the past three decades, the median income fell nearly 8 percent in 2010 to $45,800. Our citizens are meeting the crisis, in my opinion, with great resolve and dignity. But those who are largely responsible for their situations have averted any real responsibility and scrutiny. Let's just take a look.

The Federal Reserve actually found that only, roughly, half of America's middle class remained on the same rung on the economic ladder. Most fell down. Yet, as the Federal Reserve's data show, not everyone lost in the recession. The median net worth of the wealthiest among us--the millionaires and billionaires who helped cause the crisis--actually rose. Moreover, the value of some of the very top has simply been obscene. I think you'd say it's un-American. Let's take a look at the top executives on Wall Street. How did they fare when most Americans lost decades worth of their hard-earned savings?

Reportedly, the take for 2011 of the chief executive officer of J.P.Morgan, Jamie Dimon, was a whopping $23.1 million. That's just, you know, the take-home. It's not all the stock options and everything else. I wonder if he thinks that's enough? His salary went up 11 percent--11 percent more--even though J.P.Morgan recently admitted to trading losses of over $2 billion. How would you like that job? He got paid more while the institution lost money. Of course J.P.Morgan, still standing after it helped cause the crisis, got bigger after it became one of the Big Six. Mr. Dimon is not alone in taking home millions more while average American families lost much of their life savings.

John Stumpf from Wells Fargo, well, he only earned $19.8 million for 1 year--$19.8 million. Lloyd Blankfein from Goldman Sachs took in $16.2 million. That's just the salary. His compensation reportedly rose by about 14.5 percent last year despite a sharp decline in profits and share price during that year. Isn't that interesting? Who among us could have that kind of position--you make more money when your institution loses money.

This transfer of Americans' wealth has left most communities hollowed out with abandoned homes, abandoned commercial strips, high unemployment, soaring public debts, cars that have been confiscated sitting on the backlots of banks, and weakened infrastructure across this country. When you look at this picture, you can tell there is something really wrong here.

In this body, we continue to debate how to get our fiscal house in order, but Republicans have been unwilling to negotiate. Last year, we saw how House Republicans gambled with our economy. They rejected plan after plan to raise the debt ceiling and to responsibly balance the budget by putting both spending cuts and revenues on the table. They were protecting their favored few and their like at any cost, including those who get special tax breaks and get millions even when their companies do poorly or fail. When and why are the interests of the privileged money barons put before everyone else? House Republicans refuse to provide tax relief for working families unless we give even more tax breaks to the super wealthy.

We need to get our priorities straight. We need to get our fiscal house in order. We need a smart approach that puts revenues and spending cuts on the table, and we need to focus on job creation. We need to hold these Americans accountable for the damage they have done, and let them carry a hod and bear their fair share of the burden. So, for the sake of full disclosure, let's put their base earnings for last year on the record.

Wall Street CEOs Taking Millions

Jamie Dimon, JPMorgan, $23.1 Million.

John Stumpf, Wells Fargo, $19.8 Million.

Lloyd Blankfein, Goldman Sachs, $16.2 Million.

Vikram Pandit, Citigroup, $14.9 Million.

James Gordon, Morgan Stanley, $13.0 Million.

Brian Moynihan, Bank of America, $8.1 Million.

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