30-Something Working Group

Floor Speech

30-SOMETHING WORKING GROUP -- (House of Representatives - September 17, 2008)

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Mr. MURPHY of Connecticut. The Wall Street fire department is well-equipped. The Main Street fire department, it's gone underfunded and undermanned and unequipped for the last 12 years, particularly for the last 6 years.

We were very quick to go and help out our friends on Wall Street, but everybody sat here with their hands, you know, on their seats, tied behind their backs, when all these families needed a little help, when a kid who couldn't get an education in an inner city needed to access the apparatus to opportunity that all the rest of us had, when that small business that was about to go under because it couldn't find the health-care insurance to keep its employees on staff needed a little assistance. The little guys, when they needed the fire trucks, they weren't there. But when the big guys needed them, they got there.

And so I think you're exactly right, it's just a matter of consistency. Listen, government certainly can be an agent of help to people who need some assistance. But it shouldn't just be the big Wall Street firms. It should be regular, average, everyday families out there.

And to Mr. Perlmutter, just a word of warning. I know you're sort of new to the 30-Somethings here, but we don't use Latin. It's just a rule, and I hope you will take that under advisement if you join us from here on out.

Listen, I thank my friends for letting me join a little late here. I just wanted to maybe add one thought to this, and maybe you have covered it already. But I think people are searching today for the reasons, as Mr. Altmire said, as to why last night AIG got the brass ring. Now, why did they get help and Lehman Brothers didn't and IndyMac didn't? Exactly why did they get help?

Well, part of it I think is that this is a company that does tremendous international business. This is, at some level, a representation of American economic power throughout the globe, economic power that has been so greatly compromised by this administration as we have sold this country to foreign banks and foreign governments, that part of the reason, I think, that we have decided to choose AIG is because we are in such a precarious situation with regard to all of the foreign lenders and foreign governments that hold our currency, that hold American money through the $9 trillion, $10 trillion that we have given out in notes through the Federal debt, that we are now in a crisis position, that when an American firm that is a representation of our power across this globe comes under threat, we have to prop them up. Because if we are seen as economically weak around this globe, those countries are going to start calling their notes, those countries are going to start asking for their money back.

And that's when the real economic ruin happens, when the $9 trillion that we have out to lenders across this globe, the record amounts that foreign governments hold, when they start to call in that money that the Bush administration and the Republican Congress sent out to them in record deficits and record debts, then we're in real trouble.

And so part of the reason I think we're standing here and trying to answer the question as to why AIG is at the top of the headlines is because we are trying now to make up for the terrible economic policies of the Bush administration that John McCain seeks to perpetuate.

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Mr. MURPHY of Connecticut. I just wanted to throw something on top of that, just to give you an example. You're giving one kind of example. Let me throw another one on, as to what it means when you regulate the small banks but you don't regulate the investment banks, you don't regulate the Fannies and the Freddies of the world.

Local banks are still in business, largely, because they have government regulation--sensible regulation, some of it; some of it a little bit too much--that requires them to be appropriately leveraged. They have 4:1, 5:1, 6:1 leverage rates. Fannie and Freddie had 60:1 leverage ratios, just unsustainable. The investment banks that went under, Bear Stearns, 35:1 leverage ratios, money they didn't have. So that's what we're talking about here.

We need to do something about the regulatory burden that is crippling a
lot of those small businesses. But we need to understand that it's really the big guys that need to be part of the conversation that the small businesses, the small banks have been a part of for a long time.

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