Metavid

Video archive of the US Congress

House Proceeding 03-25-09 on Mar 25th, 2009 :: 2:49:25 to 3:05:54
Total video length: 4 hours 47 minutes Stream Tools: Stream Overview | Edit Time

Note: MetaVid video transcripts may contain inaccuracies, help us build a more perfect archive

Download OptionsEmbed Video

Views:542 Duration: 0:16:29 Discussion

Previous speech: Next speech:

Ron Kind

2:49:25 to 2:49:46( Edit History Discussion )

Ron Kind: of the last six or seven years that we spent a whole lot too much money in the war in iraq and in afghanistan. in fact, we have been regaled every day with stories about, oh, we're spending more and more money. but just to kind of put perspective on how much we've been spending lately, let's just consider the six years of the war in iraq and add up all

Ron Kind

2:49:25 to 3:05:54( Edit History Discussion )
Speech By: Ron Kind

Ron Kind

2:49:47 to 2:50:09( Edit History Discussion )

Ron Kind: the money we spent in the war in iraq. and then let's add to that the amount of money that we spent in afghanistan and you put the two together and it's less money than we spent in the first five weeks when this congress was in session. that's kind of an amazing number. we spent this, supposedly a

Ron Kind

2:50:10 to 2:50:31( Edit History Discussion )

Ron Kind: stimulus bill, $840 billion. what is $840 billion? it's more money than we spent on both of these wars over the past six and seven years all added up combined. how did we get into this situation th so tremendously much mone i recall the president made a statement. it said, we cannot simply spend

Ron Kind

2:50:32 to 2:50:52( Edit History Discussion )

Ron Kind: as we please and defer the consequences. many of the president's statements are noteworthy. this is a good statement. we cannot simply spend as we please and defer the consequences. the only question is, when you take a look at the level of spending, these blue bars was president bush and these red

Ron Kind

2:50:53 to 2:51:13( Edit History Discussion )

Ron Kind: bars now become the democrats and particularly here, this is this year. now, this doesn't have projections in it -- projections in it for economists making all kinds of predictions. this is what we're spending and you see how much the spending has gone up. and so this line doesn't square too well with we can't simply spend as we please and defer

Ron Kind

2:51:14 to 2:51:34( Edit History Discussion )

Ron Kind: the consequence. so how did we get into this really heavy big spending kind of situation? i think it's helpful. people say, we just have to keep looking ahead and solving problem. i think it's good to look ahead and solve problems. i think it's also possible to take a look and see, where did we make mistakes and what do we do to make sure we don't do it

Ron Kind

2:51:35 to 2:51:55( Edit History Discussion )

Ron Kind: again? if you look at how we gothe economy in trouble, the story goes back actually a good number of ye it goes back even as far back as 1968 and that was when fannie mae was created. it's called a government-sponsored enterprise. it's not really private. it's not really government,

Ron Kind

2:51:56 to 2:52:16( Edit History Discussion )

Ron Kind: it's sort of half and half. and so 1968 we created fannie mae and in 1970 freddie mac. and the purpose of these organizations was to make it so that americans could afford to own homes and that is, of course, a good thing. we all appreciate the american dream. particularly having, when you come home after a hard day's work, have a place that's

Ron Kind

2:52:17 to 2:52:42( Edit History Discussion )

Ron Kind: really your palace. maybe not a fancy palace but it's at least a place where there should be some peace and when you can say, yeah, this is my house. and that's always been part of the american dream and the idea was to create these agencies to allow more people to have a chance to own their own home. that was a good enough ideto start with. but then we started to tamper

Ron Kind

2:52:43 to 2:53:04( Edit History Discussion )

Ron Kind: with the community reinvestment act which mandated that freddie and fannie or in the community reinvestment act it mandated more banks had to make loans that were risky loans. not the sort of loan that a local bank would know the people living in their area and they'd say, oh, this is a good guy and he wants to buy a home but we know he'll be able to

Ron Kind

2:53:05 to 2:53:26( Edit History Discussion )

Ron Kind: pay his loan, so we'll go ahead and make that loan and we'll keep that onur books and allow that to go forward. and then every month we know this man in our community, we know he'll pay off his loan and soon he'll be a proud homeowner. no, this was not what happened. with the community reinvestment act, what we're saying now is that banks have to lend money

Ron Kind

2:53:27 to 2:53:47( Edit History Discussion )

Ron Kind: to people who might not be able to repair those loans and the government's starting to say, you've got to make these loans that are not so good. well, in 1992 the federal housing safety and soundless act mandated that freddie and nnie buy risky loans from the

Ron Kind

2:53:48 to 2:54:09( Edit History Discussion )

Ron Kind: bank. so now you've got this to go a little further. it's not just that the bank is going to make some risky loans but now the bank has the option of dumping the risky loans on freddie and fannie. so you can see where this is going. what's starting to happen is that we're passing the accountability and guess who's finally going to end up holding the bag? you guessed it.

Ron Kind

2:54:10 to 2:54:30( Edit History Discussion )

Ron Kind: the u.s. taxpayer. well, here's what's going on. now this enterprise is saying you can take these bad loans, pass them onto freddie and fannie. well, then we go to 1999 and under the graham-leech-biley act, this is where president clinton expanded the number of bad loans, not maybe bad loans,

Ron Kind

2:54:31 to 2:54:51( Edit History Discussion )

Ron Kind: but much more risky loans that freddie and fannie had to take. and so freddie and fannie now are picking up more and more of loans where it's not so clear people are going to be able to pay these things so freddie and fannie start to do some exciting footwork with their finances and start packaging

Ron Kind

2:54:52 to 2:55:13( Edit History Discussion )

Ron Kind: these loans up and in unique ways and selling them through wall street all over the world. and so this is going on in 1999. now other things are starting to take effect here. the economy was not so good in 1999. and so greenspan at that time lowered the interest rate, took it way down, so it created a whole lot of available liquidity and the housing

Ron Kind

2:55:14 to 2:55:34( Edit History Discussion )

Ron Kind: bubble starts goi. and this was the year that i was elected it to congress, 2000, so 2001, if i'd come down here, i was really kicking myself by 2005 because anybody who bought a house in washington, d.c., why that house would have doubled in value in about five years. you're saying, why in the world didn't i buy some big house in d.c.?

Ron Kind

2:55:35 to 2:55:55( Edit History Discussion )

Ron Kind: then later on you think, i'm glad i didn't. but anyway, we haven't gotten there yet. so this is what's happening in 1999. then things start -- the train starts to come off th track. in 2003, freddie and fannie get investigated by the securities and exchange and they admit

Ron Kind

2:55:56 to 2:56:17( Edit History Discussion )

Ron Kind: that $1.2 billion accounting error. at that particular time, president bush seeing that had been warned. there had been some warnings before back in 1999. "new york times," there's an editorial saying we're setting up a problem. here's the problem. you have a whole bunch of loans that are very questionable. more and more and more questionable loans and who is going to back up tse loans?

Ron Kind

2:56:18 to 2:56:39( Edit History Discussion )

Ron Kind: who's going to end up paying for them if people default on their loans? this is, who's going to pay? well, freddie and fannie have all of these things, what's the implication? well, freddie and fannie are backed by who? by the u.s. government. so if the loans are bad, now the u.s. government is maybe not obligated but pretty much obligated. by this time, freddie and

Ron Kind

2:56:40 to 2:57:00( Edit History Discussion )

Ron Kind: fannie have got more than half of the home loans in america. so is the government going to turn their back and say, all this stuff is just going to go away? no, of course. along. by 2003 the president sees that these -- this article on ptember 11,

Ron Kind

2:57:01 to 2:57:21( Edit History Discussion )

Ron Kind: 2003, th "new york times," september 11, 2003, it says here, the bush administtion today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. so here you have republican president bush is saying, we

Ron Kind

2:57:22 to 2:57:42( Edit History Discussion )

Ron Kind: got trouble, we need to get into freddie and fannie. we need to regulate them some because they're starting to get wild with their financial wheeling and dealing and what's going to happen is the government and the taxpayer are going to end up getting caught on t hook. well, what was the response and did we go ahead an president's recommendation and

Ron Kind

2:57:43 to 2:58:03( Edit History Discussion )

Ron Kind: move forward with further regulations of freddie and fannie? well, he was opposed. the same article in the "new york times," same one, september 11, 2003, the ranking democrat of the financial services committee, congressman frank, is quoted in this article. these two entities, fannie mae

Ron Kind

2:58:04 to 2:58:28( Edit History Discussion )

Ron Kind: and freddie mac, are not facing any kind of financial crisis. said representative barney frank of massachusetts. now, i think he didn't think they were facing any particular kind of crisis, but he was a ranking member on this committee. that means he was in the minority party in 2003, but he was opposed to what the president was suggesting and

Ron Kind

2:58:29 to 2:58:49( Edit History Discussion )

Ron Kind: that was a strong reining in of fannie and freddie's practices. he couldn't stop a legislation because he was in the minority party. so following 2003, you have in addition, you have the bush administration in 2004 again -- this is a committee testimony -- saying we've got to get onto

Ron Kind

2:58:50 to 2:59:10( Edit History Discussion )

Ron Kind: freddie and fannie and then by 2005 a bill was passed in the house. it was mostly -- the one in the house was mostly voted for by republicans, was opposed by a majority of democrats or quite a number of democrats and the bill passes out of the house and then goes over to the

Ron Kind

2:59:11 to 2:59:31( Edit History Discussion )

Ron Kind: senate. now the senate is kind of an odd body because over there it takes 60 votes to get something passed and as the "new york mes" reported, the democrats were not in favor of this additional regulation on freddie and fannie. so here's another version, the senate bill 190. it's the federal housing enterprise regulatory reform

Ron Kind

2:59:32 to 2:59:52( Edit History Discussion )

Ron Kind: act, 2005, and the senate, it was passed out of the committee on banking and housing and urban affairs, but the floor action was blocked by the democrat minority. so there's a difference of political difference he that the repu of more regulation of freddie and fannie, democrats were opposed to that, killed it over

Ron Kind

2:59:53 to 3:00:13( Edit History Discussion )

Ron Kind: in the senate. now, what happened, then, of course, is that all of these bad loans spiraled more and more out of control and as they did so, they started to create havoc in other parts of the economy. now, was this problem created refused to regulate freddie and fannie? no, not entirely because of

Ron Kind

3:00:14 to 3:00:36( Edit History Discussion )

Ron Kind: that. it was a very important component. certainly the bad loans are what put us on track for a very serious world economic situat there was nor to it, though. there were people on -- more to it, though. there were people on wall street and two other rating agencies, the ones that give us our credit ratings, they're the

Ron Kind

3:00:37 to 3:00:58( Edit History Discussion )

Ron Kind: ones that said all of these mortgage-backed securies were a a.a.a. rating. well, that turns out to also have been a not very wise thing. and they were not a.a.a.-rated. in fact, most of them have gone on default enough so that there's no longer any market for these mortgage-backed securities.

Ron Kind

3:00:59 to 3:01:19( Edit History Discussion )

Ron Kind: now we are at the point in the last year or two where we have what is clearly a recession on our hands. what do you do with a recession? there's two basic theories about how to handle it. the first one goes back to f.d.r., his secretary of treasury, henry morgenthau, along with a guy, lord keynes,

Ron Kind

3:01:20 to 3:01:41( Edit History Discussion )

Ron Kind: he was a little weird but he was an economist they came up with the idea that when the economy is in trouble, you have to stimulate it. so what we're going to do is spend a lot of money and that's going to make the economy a lot better. they tried that during the great depression. after eight years of stimulating, that is spending tons and tons of taxpayer

Ron Kind

3:01:42 to 3:02:03( Edit History Discussion )

Ron Kind: money, you have the guy who really came up with the scheme, henry morgenthau, appearing before the house ways and means committee in the year 1939 and he talks about how well does it work if the government spends a whole lot of money to get fix? here's what his quote was. we have tried spending money. we are spending more than than

Ron Kind

3:02:04 to 3:02:26( Edit History Discussion )

Ron Kind: we have ever spent before and it does not work. this is the guy that supports this keynesian model of economics. it says,he more you spend money, it's going to fix the economy. say after eight years of the administration, we have just as much unemployment as when we started, and an enormous debt to boot.

Ron Kind

3:02:27 to 3:02:47( Edit History Discussion )

Ron Kind: this is a lesson that henry morgenthau learned in 1939. he learned it at the cost of eight years of republican -- of americans being out of jobs. he realized that this doesn't work. the japanese did not learn the lesson and in the 1970's, they took their economy through 10

Ron Kind

3:02:48 to 3:03:09( Edit History Discussion )

Ron Kind: years of big gov spending to try to get their economy going and it didn't work. and so, what we have then is the problem of an approach to fixing an economic crisis which creates unemployment and of course, unemployment, lost jobs, really, really hurt an

Ron Kind

3:03:10 to 3:03:32( Edit History Discussion )

Ron Kind: awful lot of common people. a lot of people that have worked hard all their lives, they're trying to pay their mortgage off they lose their job, and nowheir house is foreclosed, i think sometimes in my own mind of the -- being a father of a family with a wife and kids dependent on me, i think of what it would be like to come home at night and

Ron Kind

3:03:33 to 3:03:53( Edit History Discussion )

Ron Kind: see your furniture, your living room furniture sitting on the sidewalk and your house, you're being tossed out of your house. that's kind of thing we risk when we start using bad government policies and we start to take th process of having people being encouraged to take loans they can't afford to take, we lose jobs, and

Ron Kind

3:03:54 to 3:04:14( Edit History Discussion )

Ron Kind: things start to come undone. now, there's aifferent approach, another way of dealing with a recession, and one way of dealing with the recession we mentioned is, of course, the keynesian model or the idea of spend your way out of trouble. the question is, we need a little bit of common sense down in washington, d.c. we need a little common sense

Ron Kind

3:04:15 to 3:04:35( Edit History Discussion )

Ron Kind: in congress, and mosteople in a lot of our districts know that if you get in trouble economically, the thing you do is, you don't go buy a brand new car and spend money like mad hoping it's going to get better. that's plain crazy. that seems to be what the government is doing. let's take a look and see what our response has been. er

Ron Kind

3:04:36 to 3:04:56( Edit History Discussion )

Ron Kind: there was the same approach that was used by j.f.k., by ronald reagan, and by president bush. all three times effectively turning a recession in a good, solid economic times. i've got a couple of charts here, i want to throw a couple of these up, this is the heart of where we are in america today, it affects every man,

Ron Kind

3:04:57 to 3:05:18( Edit History Discussion )

Ron Kind: woman, and child in our country. what i have here right in front of me is the danger of that keynesian mod spending money out of control.

Ron Kind

3:05:19 to 3:05:39( Edit History Discussion )

Ron Kind: let's take a look at this chart. this is a pretty easy one to understand. i know charts are sometimea little confusing or you have to try to figure out what they're saying. this just tells us whether or not the family budget got balanced. every one of these is a line, if the line goes down, it means the government spent too much

Ron Kind

3:05:40 to 3:05:55( Edit History Discussion )

Ron Kind: money. if it goes up, it says we didn't spend as much as we took in. so just like the family budget, e down lines mean uh oh, we went into debt, and we're going back all the way here to 1980 and going out here to this very year where we are.

Personal tools

MetaVid is a non-profit project of UC Santa Cruz and the Sunlight Foundation. Learn more About MetaVid

The C-SPAN logo and other servicemarks that may be found in video content are the property of their respective trademark holders. None of these trademark holders are affiliated with Metavid