Service Members Home Ownership Tax Act Of 2009
Floor Speech
Service Members Home Ownership Tax Act Of 2009
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Mr. SANDERS. Mr. President, what I want to touch upon is my strong belief that Ben Bernanke should not be reappointed for a second term as Chairman of the Federal Reserve. In that regard, I placed a hold on his nomination.
Everyone in this country understands we are in the midst of the worst economic crisis since the Great Depression. We are looking at 17 percent of our people being either unemployed or underemployed. We are looking at average length of unemployment being longer than it has been since World War II. We are looking at a situation where, over the last 8 or 9 years, median household income has declined by over $2,000. We are looking at a situation where, according to USA Today, September 18, 2009:
The incomes of the young and middle aged, especially men, have fallen off a cliff since 2000, leaving many age groups poorer than they were even in the 1970's.
What we are seeing is a long-term trend resulting in the collapse of the middle class, an increase in poverty, a growing gap between the rich and everybody else. Then, to make a very bad situation worse, as a result of the greed, irresponsibility, and illegal behavior of Wall Street, we are now in a terrible economic decline.
The American people voted overwhelmingly last year for a change in our national policies and for a new direction in the economy. After 8 long years of trickle-down economics that benefited the very wealthy at the expense of the middle class and working families, the people of our country demanded a change that would put the interests of ordinary people ahead of the greed of Wall Street and the wealthy few. What the American people did not bargain for was another 4 years for one of the key architects of the Bush economy, Federal Reserve Chairman Ben Bernanke.
The Chairman of the Federal Reserve--and the Federal Reserve itself--has four main responsibilities. I want the American people to determine whether they believe the Fed has, in fact, succeeded in fulfilling these obligations. Here they are, four main responsibilities:
No. 1, to conduct monetary policy in a way that leads to maximum employment and stable prices. Maximum employment? When you have 17 percent of your people unemployed or underemployed, I do not think the Fed or all of us, any of us, have succeeded in that area.
No. 2, to maintain the safety and soundness of financial institutions. Obviously, that has not been the case either.
No. 3, to contain systemic risk in financial markets.
No. 4, to protect consumers against deceptive and unfair financial products.
Not since the Great Depression has the financial system been as unsafe,
unsound, and unstable as it has been during Mr. Bernanke's tenure. More than 120 banks have failed since he has been Chairman, and the list of troubled banks has grown from 50 to over 416.
Mr. Bernanke has failed to prevent banks from issuing deceptive and unfair financial products to consumers. Under his leadership, mortgage lenders were allowed to issue predatory loans that they knew consumers would be unable to repay. This risky practice was allowed to continue long after the FBI warned, in 2004, of an epidemic in mortgage fraud.
Here is what the bottom line is. The bottom line is that the key responsibility of the Fed is to maintain the safety and soundness of our financial institutions, and they failed. They failed. As a result of the greed and speculation on Wall Street--which the Fed should have been observing, which the Fed should have acted against, which the Fed should have warned the American people and the Congress about--they did nothing and our financial system went over the edge.
Then, after not doing their jobs as a watchdog, not fulfilling their obligation to protect the safety and soundness of our financial system, the financial collapse occurred, and what happened? What the Fed did is provide not only--not only did Congress put $700-plus billion into the bailout, the Fed provided several trillion dollars of zero-interest loans to large financial institutions. When I asked Chairman Bernanke which financial institutions received these zero-interest loans, the answer was: I am not going to tell you. Not going to tell you.
The reason Congress, against my vote, bailed out Wall Street is they were too big to fail. Large financial institutions were too big to fail. Since the collapse, three out of the four largest financial institutions have become even larger. So the systemic danger for our economy is even greater today than it was before the bailout.
The American people want a new Wall Street. They want a Wall Street which begins to respond to the needs of small business, so we can begin to create jobs, not just to Wall Street's outrageous executive compensation.
Let me suggest some of the things I think a Fed Chairman should be doing, things Mr. Bernanke is not.
No. 1, today, bailed out financial institutions are charging consumers 25 or 30 percent interest rates on their credit cards. The Fed has the power to stop that, to put a cap on interest rates. That is what they should be doing.
The Fed has the power to demand that bailed-out institutions provide loans at low interest rates to small and medium-sized businesses so we can begin to create the kinds of jobs that are desperately needed in this country. That is not what Mr. Bernanke has done.
The Fed has the power now to do what is taking place in the United Kingdom, something that many economists are demanding, and that is to start breaking up these large financial institutions which are too big to fail. In my view, if an institution is too big to fail, it is too big to exist. We have to start breaking them up, not allow them to get even larger. The Fed has chosen not to do that.
We need transparency at the Fed. I am the author of a GAO audit of the Fed, which now has 30 cosponsors, which I hope we will pass. But at the very least, if the taxpayers of this country are putting at risk trillions of dollars being lent out to large financial institutions, we have a right to know which institutions are receiving that money and under what terms.
Let me conclude by saying this: This country is in the midst of a horrendous economic crisis. Millions of families all over this country are at their wit's end. They are suffering. They are trying to figure out how they are going to keep warm this winter, how they are going to pay their bills. The time is now for a new Fed, for a new direction on Wall Street, for a Wall Street which is helping our productive economy create decent-paying jobs, not a Wall Street based on greed, only for themselves, whose goal in life is to make as much money as possible for their CEOs.
We need a new Fed, we need a new Wall Street, and we surely need a new Chairman of the Fed. My hope is that President Obama will give us a new nominee and not Mr. Bernanke.
I yield the floor.
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