S10542 CONGRESSIONAL RECORD — SENATE November 17, 2008 

$60 now. It went all the way to $147 a 

barrel. When the world economy started getting into trouble and they needed 

cash, they started bailing out of those 

futures accounts, so that brought the 

price of a barrel of oil down. While sure 

as shootin’, if we do not impose some 

regulations on the commodity futures 

trading market, those speculators are 

going to take over in the future, the 

price of oil is going to go back up, and 

the price at the pump—which I just 

filled up my car for $2.12 a gallon back 

in Orlando, FL—is going to go back up. 

We need to end our dangerous addiction to oil, and we need to find new and 

renewable sources of energy. American 

automobile makers ought to be leading 

the way instead of the opposite of what 

has happened over the last three decades. 

Third, we must place limits on executive compensation and eliminate the 

executives’ golden parachutes. Taxpayer money should not be used to reward individual executives until the 

taxpayers have been repaid. 

Let me divert from the automobile 

industry for a minute. There is a similarity about executive compensation 

and golden parachutes and what we 

have done with the big economic bailout of Wall Street, which this Senator 

voted against. Well, lo and behold, over 

the course of the weekend, I happened 

to be talking to a major bank CEO. 

This banker told me his bank is in good 

shape; he doesn’t need any of the bailout money. But because some of his 

competitors are in bad financial shape 

and need the money and are taking it 

from the Secretary of the Treasury, he 

needs to take it, too, because they 

would be at a competitive disadvantage 

against the ones that are hurting that 

need to take the money. He says: We 

don’t want to take it, but we don’t 

want to be at a competitive disadvantage. Because of that, whenever they 

do take it—remember, there are supposed to be some rules in there on executive compensation and golden parachutes. This CEO is retiring before the 

money comes in, so the bank still pays 

out the huge compensation. What we 

are dealing with, with the Wall Street 

$700 billion bailout, has to apply to 

automakers as well. We should not reward those executives until the taxpayers have been repaid. 

Fourth, the automakers should not 

pay dividends to shareholders until 

they have returned to financial health. 

It is a simple, straightforward condition on us giving them taxpayer money 

in order to get them back to financial 

health. 

Fifth, I wish I didn’t have to say this, 

but there are no Lee Iacoccas now. The 

current senior management should be 

replaced. We need new leadership. We 

need fresh thinking. We need new people, new eyes, new ears to steer us out 

of this mess. We cannot reward those 

leaders whose poor decisions and poor 

judgment and sometimes selfishness 

got us to where we are now. 

We are going to face difficult choices. 

There are going to be tough times. 

Again, to quote a phrase from the 

President-elect: We need to act with all 

deliberate haste but with an emphasis 

on deliberate. We cannot simply provide our automakers with enough cash 

to continue their current operations 

for another 3 months or even another 6. 

We must instead put them on a path 

that leads to global competitiveness. 

I yield the floor, and I suggest the absence of a quorum. 

The PRESIDING OFFICER. The 

clerk will call the roll. 

The assistant legislative clerk proceeded to call the roll. 

Mr. DORGAN. Mr. President, I ask 

unanimous consent that the order for 

the quorum call be rescinded. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. DORGAN. Mr. President, I ask 

unanimous consent to speak for 20 minutes as in morning business. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

f 

FINANCIAL CRISIS 

Mr. DORGAN. Mr. President, I think 

it is obvious to all Americans that we 

face a very severe and difficult financial crisis. We have had an election. 

The American people have voted for 

change. We now face significant challenges. I was thinking, as I was walking over to the floor of the Senate, 

about a visit I had recently at a nursing home in North Dakota. 

This financial crisis is probably the 

most significant financial crisis since 

the Great Depression. We don’t know 

where this will go. We don’t know how 

many will ultimately be unemployed. 

We don’t know how long it will last. 

This is a recession. We hope it is not 

extraordinarily deep. We hope we can 

find the menu to overcome it and the 

kinds of policies to try to make certain 

we move from this position to a position of economic strength and economic growth, once again. 

But I went to a nursing home in 

North Dakota because North Dakota’s 

oldest citizen was there. She had a 

birthday. She is a 110-year-old woman; 

very lucid, very conversational. We 

talked about the Great Depression, as a 

matter of fact. We talked about the 

tough times in her life. She was born in 

1898. By the way, her niece was there at 

the nursing home who had put on a 

birthday party for her in August. Her 

niece is 103 years old and her son, who 

is still farming, is 80 years old. 

I had a chance to talk to them all 

about what life was like from 1898 to 

2008. One of the significant things she 

remembered was the difficulty of the 

Great Depression in the 1930s, when it 

was hard to find jobs and people had 

soup lines in the major cities and people were struggling to try to make ends 

meet. 

Well, I think a lot of folks from the 

1930s forward felt we would never again 

see these days because we put in place 

economic stabilizers and we put in 

place provisions in law that prohibited 

the kind of activities in the roaring 

1920s that led us to the 1930s and the 

excess, the unbelievable debt, the greed 

that resulted in the economic collapse 

of the 1930s. So we put in place things 

such as the Glass-Steagall Act and 

other provisions that prevented banks 

from being engaged in real estate and 

securities and things that were inherently risky that caused major problems 

and collapse in the 1930s. 

It is easy to forget lessons. The Congress over the years, Presidents over 

the years, and certainly the financial 

services industry moved ahead. I harken back to 1999, when something called 

the Financial Modernization Act was 

passed by the Congress. I said then it 

was a terrible thing to have done. It 

stripped apart the Glass-Steagall Act 

and essentially said you can create big 

bank holding companies, you can put 

firewalls in, you can merge real estate 

and securities with banking; it will all 

be fine. That was in 1999. 

In fact, here is what I said during 

that debate on the floor of the Senate: 

I say, to people who own banks, if you 

want to gamble, go to Las Vegas. If 

you want to trade in derivatives, God 

bless you. Do it with your own money. 

Don’t do it through deposits that are 

guaranteed by the American people. 

When we passed the Financial Modernization Act—and I was one of eight 

Senators to vote no, I said this during 

debate: The bill will, in my judgment, 

raise the likelihood of future massive 

taxpayer bailouts. It will fuel the consolidation and mergers in the banking 

and financial services industry at the 

expense of customers, farm businesses, 

and others. 

I regret I was right. Massive taxpayer 

bailouts. It didn’t take quite a decade. 

It took 9 years. Now we see the largest 

proposed bailouts in the history of our 

country. 

It was a time of self-regulation. Alan 

Greenspan, the head of the Federal Reserve Board, said the financial services 

industry will regulate itself. Well, not 

quite. Here is what Alan Greenspan 

said last month: 

I made a mistake in presuming that self interests of organizations, specifically banks 

and others, were best capable of protecting 

their own shareholders and their equity in 

the firms. 

What an unbelievable mistake. Regulators that were willfully blind saying: 

You know what. We will pass the Financial Modernization Act allowing 

real estate, securities, and banking to 

come back together, forgetting the lessons of the Great Depression. Then, 

those who were hired to regulate decided self-regulation will work. We 

don’t have to regulate. We will be willfully blind. So what happened? Well, 

the subprime loan scandal happened. 

The subprime loan scandal, of course, 

is at the root of this because it is most 

evident of the greed that exists in our 

economy in recent years. It resulted in 

bad mortgages spread all around this 

country and around the world. They 

were put into securities and sold up 

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November 17, 2008 CONGRESSIONAL RECORD — SENATE S10543 

through banks into hedge funds, into 

investment banks, and then all of a 

sudden it all turned sour. 

Here is what the subprime loan scandal is all about. The biggest mortgage 

bank in America, just to show you 

what they were saying: Do you have 

less than perfect credit? 

Do you have less than perfect credit? Do 

you have late mortgage payments? If you 

have been denied by other lenders, well, call 

us. 

It is a new business model, apparently. 

Are you a bad credit risk? Call us. 

Countrywide said that. The CEO of 

Countrywide was given the Horatio 

Alger award—until it all collapsed. 

Millennium Mortgage said: 

Twelve months, no mortgage payments. 

That’s right, we’ll give you the money to 

make your first 12 payments if you call us in 

the next 7 days. We pay it for you. Our loan 

program will reduce your current monthly 

payment by 50 percent and allow you no payments for the first 12 months. 

Zoom Credit, another mortgage company, said this: 

Credit approval is just seconds away. Get 

on the fast track at Zoom Credit. At the 

speed of light, Zoom Credit will preapprove 

you for a car loan, a home loan, or a credit 

card. Even if your credit is in the tank, 

Zoom Credit is like money in the bank. 

Zoom Credit specializes in credit repair and 

debt consolidation, too. Bankruptcy, slow 

credit, no credit—who cares? 

That is the bottomless pit of greed 

that resulted in massive numbers of 

mortgages being put out there in this 

country. Then the brokers were making an enormous amount of money. 

The mortgage bankers were making 

money and business fees, and then they 

securitized it, like they put sawdust in 

sausage in the old days—good loans 

and bad loans. They wrapped them into 

securities and chopped them up and 

sold them upstream. By the way, what 

they did, when they locked people into 

that kind of credit, those loans, they 

put in resets of higher interest rates in 

3 years, where they would have known 

the homeowner wasn’t going to be able 

to pay the monthly mortgage, and they 

put in prepayment penalties so they 

could not pay it off if they wanted to. 

That is how they made these attractive 

investments with high rates of return. 

So the subprime loan scandal made 

everybody rich, like hogs in a trough 

grunting and shoving and making lots 

of money. Then one day it collapsed 

like a house of cards. The hedge funds 

that were investing in these—the credit default swaps that surrounded them 

with massive amounts of leverage, it 

all collapsed. When you create a house 

of cards, it is destined to collapse. 

I mentioned hedge funds. Some of 

you may have seen the hearing held in 

the House a few days ago. The highest 

income earner in the hedge fund industry last year earned $3.7 billion. 

So we create this crisis, get rid of the 

protections that existed from the Great 

Depression, abolish Glass-Steagall, and 

create a Financial Modernization Act, 

and say everything will be great. Then 

the regulators turn into willfully blind 

public servants, and the Chairman of 

the Federal Reserve says let them regulate themselves, and it all turns sour 

and the house of cards collapses. 

What is happening now is, the Treasury Secretary came to the Congress 

and said: We face very serious problems. I must have $700 billion in 3 days 

and, if not, I believe there is going to 

be a financial catastrophe of sorts. So 

the Congress didn’t do it in 3 days, or 

with a three-page bill, as the Treasury 

Secretary suggested. But the Congress 

passed a $700 billion bailout proposal. 

The Treasury Secretary said he wanted 

to do that because he wanted to purchase toxic assets from the balance 

sheets of the firms that invested in all 

of this. So he got the $700 billion. Then 

he said: I have changed my mind. That 

is not what I am going to do with the 

$700 billion. I want to purchase capital 

from banks to extend their credit or 

lending opportunities because the credit markets are frozen. He took $125 billion of the $700 billion and gave it to 

nine banks, some of whom didn’t want 

it. But he gave it to them with no 

strings attached, no requirement that 

they expand lending or not use it to 

pay substantial bonuses. We have seen 

examples of bonuses, with $33 billion in 

bonuses on Wall Street in 1 year. So 

no-strings-attached money was given 

to nine banks with no requirement to 

expand lending, no requirement to cut 

back on dividends, and no requirement 

that they not provide hefty bonuses. 

So the question is, is that going to 

inspire confidence out there someplace? Now we discover there has been 

no expansion of credit as a result of 

$125 billion of taxpayer money being 

put into those nine banks because it 

was no strings attached. 

So the next piece that occurs is unemployment. We hear constantly— 

nearly 24 hours a day—about the financial sector. I agree the financial sector 

is unbelievably important to an economy such as ours, no question about 

that. How about the manufacturing 

sector, the working folks? Is that important? 

About a week ago there was almost 

an apoplectic seizure over the notion 

that consumption was down. Consumers weren’t consuming. It is not a 

surprise when there are more people 

out of work and people have less money 

that they are going to consume less. 

Does it concern anybody out there as 

they listen to Mr. Paulson say the $700 

billion that Congress gave him is destined only to be used for the financial 

industry? Does it concern anybody out 

there that the consumers losing their 

jobs are not going to be able to consume? That is part of this economy as 

well. 

Here is what we see on unemployment. The U.S. employment ranks 

have shrunk by 1.2 million in the first 

10 months of this year—more than half 

of those jobs lost in the past 3 months 

alone. Last month, 240,000 jobs gone. 

About 800,000 workers exhausted their 

extended unemployment benefits, and 

more than 350,000 will exhaust theirs in 

November and December. 

This chart shows what is happening 

in the industry in 2008. Manufacturing, 

down nearly a half million jobs. Construction, nearly 400,000 jobs. Business 

services, 361,000 jobs gone, vanished. 

These are hundreds of thousands. Behind every one is somebody coming 

home at night to his or her family and 

saying: Honey, I have lost my job. I 

don’t know why. I did a good job. I 

worked there for 10 years, but I was 

told the job doesn’t exist anymore. 

This is about heartache by a lot of 

families. We experienced this before. 

Will Rogers, one of the interesting 

commentators on American life in the 

Great Depression, said: 

The unemployed here ain’t eating regular, 

but we’ll get around to them as soon as everybody else gets fixed up OK. 

I wanted to visit a moment about 

these issues and ask the question, is 

there going to be a laser-like focus on 

working people just as there has been 

on the financial services sector? There 

are a good many in the financial services sector that caused this wreck. 

They are the ones who steered this 

country into the ditch with all kinds of 

financial engineering and exotic new 

products that turned out to create a 

house of cards. 

It seems to me that one of the things 

we ought to look at is creating protection with respect to these new exotic 

financial products that turned out to 

be enormously risky and dangerous to 

our economy. Some have talked about 

creating a financial products safety 

commission. We have a Consumer 

Product Safety Commission to worry 

about unsafe products. That turned out 

to have been a commission without 

much teeth because of the person who 

currently runs it. Perhaps we can have 

a financial products safety commission 

that would take a look at derivatives, 

credit default swaps, and the kind of 

sophisticated engineering going on on 

Wall Street which might produce a lot 

of money for some in the short term 

but pose a great deal of danger for this 

economy in the intermediate and long 

term. That all makes a lot of sense. 

I just described the Treasury Secretary talking about the $700 billion he 

has now been provided, and that it is 

going to go to the financial service industry exclusively, he says. So it is not 

available to those who might be creating jobs out there or trying to avoid 

losing jobs. At the same time, the 

Treasury Secretary is saying: I have 

this pot of money, and we are going to 

use it to try to unfreeze the credit markets. The Treasury Department is saying they favor new bank mergers, 

which is exactly the last thing this 

country needs. We already have big 

banks that are too big to fail, which 

means if they are set to fail, we have to 

rescue them. Now the Treasury Department says the solution is bigger banks; 

let’s have more mergers. 

It is unbelievable to me that the 

Treasury Department would not have 

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S10544 CONGRESSIONAL RECORD — SENATE November 17, 2008 

learned a lesson. Instead, they are out 

there promoting more mergers. I guess 

those mergers will be promoted with 

the very money appropriated by the 

Congress. 

Mr. President, the action we have to 

take now, it seems to me, is to try to 

find ways to establish some confidence 

in this country. I have said often that 

I used to teach a bit of economics in 

college, briefly. I was able to overcome 

it. Economics is not a science; it is psychology pumped up with helium, and 

you can call yourself an economist, but 

nobody really knows. 

The economy in this country is not 

about dials, gauges, knobs, levers, and 

all of the things like investment tax 

credit, depreciation, M–1B, and all 

those things economists study. It is 

about confidence. When people are confident in the future, they do things 

that manifest that confidence. They 

buy a car, buy a new suit of clothes, 

take a trip, or maybe buy a house. 

They do the things that you do when 

you are confident about your future 

and your job. That is called economic 

expansion. It is not sophisticated. It is 

about how people view the future. 

When they view the future with great 

alarm and less confidence, they do exactly the opposite. They defer the purchase or decide not to buy that suit of 

clothes or buy that car until next year, 

or we will not move into that other 

home or take that trip. That is the way 

an economy contracts. It is all about 

confidence. 

The question is, what can provide 

that confidence now? One of the concerns I had about the original bailout 

was that it did nothing to provide a set 

of regulations that stops the very behavior that caused all of this. You have 

to learn from it. It seems to me you 

have to provide the regulation and say 

to the American people that we will 

not let this happen ever again. 

So there are a number of things we 

have to do. Any recovery plan—and I 

think we need a recovery plan, and 

some call it a stimulus. I think we need 

a recovery plan that gives people a 

sense that we care about whether they 

have a job. For example, there is discussion about the automobile industry. 

I don’t view this as three companies or 

one industry. I view it in the context of 

what do we do to deal with this economy, especially as it relates to jobs. We 

are told that industry relates to about 

3 million to 5 million jobs. That is the 

connector all the way through the industry. If that is the case, what would 

it mean if 3 million to 5 million jobs 

are lost in the next few months, coming from America’s manufacturing 

base? It seems to me it would be devastating to an economy already at 

great risk. 

So the question is, when will we also 

ask whether we will be willing to support, through a recovery program, the 

kinds of jobs that we need in this country and willing to support a world-class 

manufacturing base without seeing 

that base decimated as the economy 

gets weaker? I don’t think you will 

long remain a world economic power 

unless you have world-class manufacturing capabilities. 

When we look at those sectors of the 

economy that have that capability and 

then decide, as some suggest, that it 

doesn’t matter who loses their job or 

gets laid off, well, it sure does matter. 

It matters to me. If there is all this 

concern about the financial sector, 

what about the concern about the jobcreating sector in the manufacturing 

area? I think we need to do a number of 

things. No. 1, I think we need a stimulus or a recovery plan that would 

make significant investments. I don’t 

think you do that by just giving people 

checks. That is not the way forward, in 

my judgment. I think you do it by putting people to work on public works 

projects, by investing in roads, bridges, 

schools, and libraries—the infrastructure needs that have been so long deferred in this country. 

All of those projects are ready across 

this country to be done. It will put people back to work, and give people confidence about the future. 

Second, we ought to take action this 

week so that we say to the Treasury 

Secretary: If you are going to continue 

to move money out of that $700 billion 

pot, you have to put conditions on it. 

We don’t want the American people to 

have to read that they are anteing up 

money so the Treasury Secretary can 

move it to Wall Street and Wall Street 

can then pay bonuses in December and 

January and they can use that in any 

way they want without conditions that 

require them to expand lending or any 

other conditions that ought to be attached to that money. We ought to insist those conditions exist. 

Third, we ought to require regulations be put in place as soon as possible 

to prevent the kind of things that we 

have seen happen that caused this financial wreck in the first place. Those 

regulations do not now exist. I know 

the former Fed Chairman Greenspan 

said he believed in self-regulation. He 

sure got a bellyful of self-regulation, 

and it completely collapsed this economy. We need to put in place a regulatory approach that gives people confidence that this kind of thing is not 

going to happen again. 

We also ought to say to the Treasury 

Department: Stop the nonsense about 

more bank mergers. It is the last thing 

we need. Nor should we want the public 

money to be used to accommodate 

more bank mergers. I know some have 

celebrated the news of bank mergers. 

Not me. I think it weakens this country, not strengthen it. 

I also believe we ought to create immediately an investigative task force 

of sorts that will begin to investigate 

and prosecute, if necessary, criminal 

behavior that was engaged in some of 

the practices that I described earlier. 

All of that, I think, is necessary. I 

believe if and when we begin doing 

those kinds of things, we will give, 

once again, the American people the 

confidence about the future that they 

must have in order for this economy to 

get back on track. 

There is, I know, a lot of discussion 

about what went wrong, and some 

might say: You know what, that is 

pretty irrelevant. It is not irrelevant 

at all. We are destined to repeat mistakes unless we understand the mistakes we have made. The route out of 

this circumstance where there is great 

economic peril to this country and its 

future, the route ahead, in my judgment, must be an active, aggressive set 

of actions by the Congress, working 

with this President and the new President, to understand the urgency of the 

things I have described. 

Mr. President, I yield the floor. I suggest the absence of a quorum. 

The PRESIDING OFFICER. The 

clerk will call the roll. 

The legislative clerk proceeded to 

call the roll. 

Mr. INHOFE. Mr. President, I ask 

unanimous consent that the order for 

the quorum call be rescinded. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

f 

ECONOMIC CRISIS 

Mr. INHOFE. Mr. President, given 

the recent news about Secretary 

Paulson’s execution of the TARP program, I firmly believe action is required by Congress. This morning, I introduced S. 3683. That is legislation 

that would do two things. It would 

freeze remaining money of the first 

$300 billion that has not already been 

expended and, secondly, it would 

change the process by which Secretary 

Paulson would access the second $350 

billion. 

When Secretary Paulson first came 

to the Senate and explained his plan, it 

was on a conference call. I happened to 

be in on that conference call. It was 

September 19. At that time, he was 

talking about the crisis that is upon 

us, that we have to do something, we 

have to do something big. It has to be 

$700 billion. It has to be done right 

now. The only way to do it is to buy 

troubled assets. 

At that time, I asked some questions. 

One question was: If there are assets 

that are going to be bought, what is 

the criteria that will be used to determine which assets should be bought? 

There was not an answer to that question. 

The second question was: Which institutions that are holding these assets 

would be the ones that would be eligible for this buyout? There were no answers to that question either. 

That was on a Friday. Then as the 

next few days went by, we had several 

conversations. I didn’t have any personal conversation with him except in 

one conference lunch, and that is, Is 

this the only way to do it? Yes, it is 

going to be buying out troubled assets. 

Still the answers were not there to 

those questions. 

In my statement opposing—I voted 

against the Paulson plan last month— 

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