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Senate Proceeding on Apr 28th, 2010 :: 2:18:45 to 2:42:25
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Tom Harkin

2:18:42 to 2:19:03( Edit History Discussion )

Tom Harkin: 12:20 p.m. will be equally divided and controlled between the two leaders or their designees. the senator from iowa is recognized. mr. harkin: mr. presint, i ask unanimous consent that curtis sturgall be granted for floor privileges for the day's proceedings. the presiding officer: without objection, so ordered. mr. harkin: well, mr. president, yesterday in the permanent subcommittee on investigations

Tom Harkin

2:18:45 to 2:42:25( Edit History Discussion )
Speech By: Tom Harkin

Tom Harkin

2:19:04 to 2:19:24( Edit History Discussion )

Tom Harkin: chaired by theistinguished senator from michigan, senator levin, we learned more about the reckless actions of traders and executives at goldman sachs. now goldman sachs was hardly the only bad actor in bringing our financial system to the brink of collapse in 2008. traders and executives at many

Tom Harkin

2:19:25 to 2:19:46( Edit History Discussion )

Tom Harkin: other financial institutions got fabulously wealthy by gaming the unregulated casinos on wall street. they walked away with fortunes even as millions of americans lost their jobs, their savings and their homes. yet, as we witnessed in yesterday's hearing, wall street remains quite arrogant and quite

Tom Harkin

2:19:47 to 2:20:09( Edit History Discussion )

Tom Harkin: unrepentant and quite unwilling to change its ways. it has the gall to believe that it should remain free to do business as usual. to that end i am told it has mobilized a legion of lobbists, an estimated 1,500 of them to try to kill, water down or stop

Tom Harkin

2:20:10 to 2:20:31( Edit History Discussion )

Tom Harkin: the financial regulation reform from coming to the floor. it's deeply unfortunate that every one ofur colleagues on the other side of the aisle -- every single republican has joined with wall street in obstructing this legislation. every single republican, not just filibustering the bill, but preventing it from even coming

Tom Harkin

2:20:32 to 2:20:52( Edit History Discussion )

Tom Harkin: to the floor for debate, an amendment. they keep saying they want to well, is that not what the debate and amendment process is about? if someone has a better idea, offer it as an amendment. let's debate it. maybe it is better. maybe we'll adopt it. maybe we won't. it seems that's the way we

Tom Harkin

2:20:53 to 2:21:13( Edit History Discussion )

Tom Harkin: should conduct the business here on the senate floor. i say to my republican colleagues, senator dodd and senator lincoln have bent over backwards. they have developed good, solid commonsense legislation. well, but if people on the other side of the aisle want some

Tom Harkin

2:21:14 to 2:21:34( Edit History Discussion )

Tom Harkin: changes, that's what the amendment process is for. we're not cutting off anyone. we the want to bring the bill up, it's open for amendment. why are the republicans so afraid of offering amendments on the floor? if they've got a better idea on how we should do this? it's a bitter irony, mr. president, that even as we've

Tom Harkin

2:21:35 to 2:21:55( Edit History Discussion )

Tom Harkin: spent a fortune in taxpayer dollars to -- to rescue the global financial system, the self-appointed masters of the universe on wall street rewarded themselves with billions in bonuses and they've geared up to fight the efforts here to prevent -- to prevent this from

Tom Harkin

2:21:56 to 2:22:16( Edit History Discussion )

Tom Harkin: happening again. well, it seems that wall street is all too used to living a different life, playing by different rules than the rest of the country. nowhere is this disconnect between wall street and main street is more stark than in the area of compensation much over the last decade compensation in

Tom Harkin

2:22:17 to 2:22:38( Edit History Discussion )

Tom Harkin: the financial sector has skyrocketed with some executives walking away with annual compensations of hundreds of millions of dollars even as the inflation adjusted incomes of ordinary working americans have remained static. mr. president,

Tom Harkin

2:22:39 to 2:23:01( Edit History Discussion )

Tom Harkin: the financial industry profits as a share of domestic profits since 1948. from 1948 until about 1980 you can see it remain fairly stable. little bumps up, little things down, little bumps up, but basically stayed pretty even.

Tom Harkin

2:23:02 to 2:23:24( Edit History Discussion )

Tom Harkin: somewhere between 8% and 18%. so somewhere between 8% and 18% of all domestic profits in this country, think about everything, everything in this country, all the profits made, about 8% to 18% was taken by the financial sector on wall street. but starting in 1984 financial

Tom Harkin

2:23:25 to 2:23:46( Edit History Discussion )

Tom Harkin: profits began to rise dramatically. you can see it here going up. in 2001 financial industry profits were almost 45% of all domestic profits in america. almost half. 45%. up from about 8% to 18%. today, despite the 2008

Tom Harkin

2:23:47 to 2:24:07( Edit History Discussion )

Tom Harkin: meltdown, they're back above 35%. 35% of all of the profits made in america going to wall street. going to the financial sector. mr. president, this is -- this is a concentration of wealth

Tom Harkin

2:24:08 to 2:24:28( Edit History Discussion )

Tom Harkin: unprecedented in our history. even worse than before 1929. worse than before 1929. now, the second chart here contrasts this explosion of wealth on wall street to what happened to ordinary americans on main street.

Tom Harkin

2:24:29 to 2:24:50( Edit History Discussion )

Tom Harkin: from 1990, which we have right about right in here -- well, i can't read it myself here. 1990 to 2008 real median household income stag mated at about $50,000. right in here. just stag mated. since 2000, real median

Tom Harkin

2:24:51 to 2:25:11( Edit History Discussion )

Tom Harkin: household incomes have actually fallen. so from about 1990 to today real median household incomes stag mated and actually -- nag natured and actually -- stagnated and have actuay fallen. stagnated and now it has fallen down.

Tom Harkin

2:25:12 to 2:25:36( Edit History Discussion )

Tom Harkin: that's what's happening to the average household in america. the median household in america. well, let's see what was happening to our street well, let's see what happened on wall street. well, just as we were stagnating

Tom Harkin

2:25:37 to 2:25:59( Edit History Discussion )

Tom Harkin: and median household income from about 1990 on, look what happened to the the average wall street bonus. huge. wall street compensation this period of time. since 1990, the average wall street bonus -- i'm not even talking about salary, i'm

Tom Harkin

2:26:00 to 2:26:20( Edit History Discussion )

Tom Harkin: talking about bonuses -- soared from about $50,000 in the early 1990's to the $200,000 in 1996. now, go out to talk to our constituents and the main street business people that run our shops and talk to anybody out in america today. did their income increase 300%

Tom Harkin

2:26:21 to 2:26:41( Edit History Discussion )

Tom Harkin: during that period of time? no. it stayed level. but look at the bonuses. and that's just the bonuses. i'm not talking even about their salaries. this is bonuses. well, i dwell on this and i point this out, mr. president, because i think it points to a larger issue.

Tom Harkin

2:26:42 to 2:27:03( Edit History Discussion )

Tom Harkin: in my view a big reason for the financial collapse of 2008 is that things and they got out of whack. as glass-steagall was repealed, and i might say this forthrightly, there were eight senators on this floor that voted against the repeal of glass-steagall. and i'm proudo say i was one of them.

Tom Harkin

2:27:04 to 2:27:24( Edit History Discussion )

Tom Harkin: but i remember at that time saying, wait a minute, there is a reason why in the 1930's under president roosevelt that we didn't want to have this happening again. so we said to commercial banks, if you take bank deposits, fine, you can be a bank, but you can't do insurance and you can't do investments.

Tom Harkin

2:27:25 to 2:27:48( Edit History Discussion )

Tom Harkin: you can't do swaps and derivatives and all that stuff, you're a commercial bank. and, for that, we give you fdic protection. we also give you federal reserve protection. we said to the insurance company, if you want to be an insurance company, fine, but you can't be a bank. we said to investment house, if you want to take money in to

Tom Harkin

2:27:49 to 2:28:09( Edit History Discussion )

Tom Harkin: invest, fine, but you can't take deposits. you're not a depositry banks. you don't get the protection of fdic. in 1999 this congress repealed that. put it all together. i said at the time and the record will show i said it, i said i hope it doesn't happen. i hope -- i hope all these smart people know what they're doing,

Tom Harkin

2:28:10 to 2:28:32( Edit History Discussion )

Tom Harkin: but i don't trust them. i don't trust them. as you're going to start having a lot of funny games playing. in the last 10 years we saw the games they played. well, the special interest after -- after glass-steagall was repealed, they attacked the very idea of government regulation, the s.e.c., other

Tom Harkin

2:28:33 to 2:28:55( Edit History Discussion )

Tom Harkin: watchdog agencies just started doing nothing. wall street stepped into the void, now they have all the protections we consumers and other consumers had under glass-steagall was gone. and so what they did, they just drove our economy off a cliff.

Tom Harkin

2:28:56 to 2:29:16( Edit History Discussion )

Tom Harkin: and ordinary hard-work r americans had to pick up the tab. that's why we need this serious financial reform. as others have noted, and i say, again, financial crises in this country shouldn't as -- as floods that just come every 10 years. or some kind of natural disaster that you sort of accept. that every so often we're going

Tom Harkin

2:29:17 to 2:29:37( Edit History Discussion )

Tom Harkin: to have a flood or we're going to have a hurricane hit the coast or we're going to have a drought someplace. financial collapses that has happened in the past, these are not preordained -- happening t our system.

Tom Harkin

2:29:38 to 2:29:58( Edit History Discussion )

Tom Harkin: they happened because we let people run amok with large sums of money, gamble it. some get fabulously rich. some get fabulously rich. but then they just drive the economy off a cliff. so just, again, so what we do to protect ourselves against

Tom Harkin

2:29:59 to 2:30:20( Edit History Discussion )

Tom Harkin: floods, what do we well, we do a lot of upland treatments, we build dams, we build levees, we do all kinds of things to protect ourselves. there are things that we can do to protect ourselves from financial collapse too. it's just putting into place the kinds of oversight and transparency and regulations

Tom Harkin

2:30:21 to 2:30:43( Edit History Discussion )

Tom Harkin: that allow our capitalist system to operate but to operate within some bounds, operate within some bounds. i don't think anyone is in favor of what we might call unbridled capitalism, the kind that we had in the 19th century, the late part of the 20th century. i don't think anybody wants to go back to those days.

Tom Harkin

2:30:44 to 2:31:05( Edit History Discussion )

Tom Harkin: yes, we believe in a capitalist system where people can take their savings and invest it make their money work for them, loan it out to other people so other people can start businesses. that's the capitalist model. there is nothing wrong with that. but should we let people take our money that we have saved up

Tom Harkin

2:31:06 to 2:31:28( Edit History Discussion )

Tom Harkin: for pensions, for example, or other kinds of investments and take those and sort of go to las vegas? i don't think so. we want some rules and regulations so they can make prudent investments can be used to start businesses to invest in economic growth on a broad basis, but not

Tom Harkin

2:31:29 to 2:31:50( Edit History Discussion )

Tom Harkin: to be used for speculation, not to be used for just gross speculation on wall street. so that's why we need this financial reform bill that we have that we're trying to get up here on the floor. it will guard against future massive meltdowns that always cost us, always cost us, not

Tom Harkin

2:31:51 to 2:32:11( Edit History Discussion )

Tom Harkin: only so much money but just in ruined lives, ruined lives. and by all means, the strong financial reform must include regulations of the derivatives market. this is something, mr. president, i have been involved in for a long time on the agriculture committee through all the years i have served there with the comdity

Tom Harkin

2:32:12 to 2:32:34( Edit History Discussion )

Tom Harkin: futures, trading commission. and having some -- looking at what's happening in the derivatives markets, and i'm pleased to say that the legislation that we're trying to bring up here includes the provisions that passed out of the agriculture committee under the leadership of our chairman, senator lincoln. derivatives contracts have been at the heart of the wall

Tom Harkin

2:32:35 to 2:32:56( Edit History Discussion )

Tom Harkin: street's financial manipulation. from december, 2000, to june, 2008, the height of the wall street boom, the face value -- they say that notional value, notional value. face value of over-the-counter derivatives grew from

Tom Harkin

2:32:57 to 2:33:17( Edit History Discussion )

Tom Harkin: from $95 billion in 2000 to to $683 trillion in 2008. there was really nothing underlying this, other than people just shifting things back and forth and betting on them back and forth. but there was nothing underlying this. now, i want

Tom Harkin

2:33:18 to 2:33:38( Edit History Discussion )

Tom Harkin: people say are you against all derivatives? i say no. there are basic derivatives that can be healthy for our economy and for individuals. businesses to the farms to individuals. i always point out the classic derivative is like an individual buys a home. they buy their home, they buy a

Tom Harkin

2:33:39 to 2:33:59( Edit History Discussion )

Tom Harkin: new house, it's their home. they put their money down, they have a big mortgage, they're going to pay it off. a lot of times, people will get a little insurance. it's called homeowners insurance, that if you die, your mortgage will be paid for. a lot of us -- we bought our house, we bought that kind of insurance. that's a derivative.

Tom Harkin

2:34:00 to 2:34:22( Edit History Discussion )

Tom Harkin: nothing wrong with that. i buy some insurance to protect my family. farmers use derivatives. businesses use them to protect against currency fluctuations, things like that. that's fine. these are basic derivatives. mr. president, since i see no

Tom Harkin

2:34:23 to 2:34:44( Edit History Discussion )

Tom Harkin: one else on the floor, i ask for another seven minutes. the presiding officer: without objection, so ordered. mr. harkin: thank you. so like i said, i have no objection to theasic derivatives. it's when these derivatives get out of hand. it's when you have a derivative on a derivative on a derivative and on and on and on, and what happening to the derivatives markets.

Tom Harkin

2:34:45 to 2:35:06( Edit History Discussion )

Tom Harkin: these become just little gambling things. there are instances of derivatives passing back and forth between speculators two or three or small margins, small, .01% margins, but on big pools

Tom Harkin

2:35:07 to 2:35:28( Edit History Discussion )

Tom Harkin: of money, big pools, pure speculation. well, so despite the youthfulness of -- usefulness of derivatives in certain cases, it got out of hand. so what we reported out of the agriculture committee would, number one, bring all these transactions to the light of day, no more behind the scenes. it would have to be reported to regulators in real time.

Tom Harkin

2:35:29 to 2:35:50( Edit History Discussion )

Tom Harkin: it would bring the vast majority, 90% or more of these on to clearing houses and exchanges. it would help to reduce the concentration of risk, bolster public transparency and the legislation that we're trying to bring up here that the republicans keep blocking gets to the heart of the too big to fail problem by prohibiting

Tom Harkin

2:35:51 to 2:36:11( Edit History Discussion )

Tom Harkin: these swaps entities, these derivative entities from also ing commercial banks. we kind of go back to glass stegall and say a commercial bank backed by the government or fdic should not be able to use that government backing to support these high stakes gambling. if you want to be a commerce bank, god bless you, be a

Tom Harkin

2:36:12 to 2:36:32( Edit History Discussion )

Tom Harkin: commercial bank, but you can't be dealing in these swaps and derivatives. let the investment houses take care of that. it's unfair to taxpayers and to our economy to let our banks do that. it's unfair to community banks. i just met in my office yesterday with all our community banks -- not all, but most of the community banks in iowa. they don't deal in swaps and

Tom Harkin

2:36:33 to 2:36:54( Edit History Discussion )

Tom Harkin: derivatives. they take deposits, they loan them out for business starts and people that need a loan for different things. they are not dealing in swaps and derivatives. so why should we allow these big banks on wall street to do it themselves? no reason for that other than they just want to do it and again to continue this kind of rampant speculation.

Tom Harkin

2:36:55 to 2:37:15( Edit History Discussion )

Tom Harkin: also in this bill, we put in an independent financial consumer protection agency to guard against rip-offs and abuses and mortgages,redit cards, payday loans and other financial products, to protect consumers. sorely needed. we slam the door on too big to fail financial institutions.

Tom Harkin

2:37:16 to 2:37:36( Edit History Discussion )

Tom Harkin: no more a.i.g.'s, no more citicorps. when companies make huge bets and lose, there ought to be a process for liquidating those companies, period. not that there is too -- not that they are too big and we have to rush in with taxpayers' help. now, to further improve the bill, i am cosponsoring legislation offered by senator cantwell that would re-create

Tom Harkin

2:37:37 to 2:37:57( Edit History Discussion )

Tom Harkin: the great depression era regulation that prohibited the mixing of banks and insurance companies. it's almost like restatement of glass istea fall gal. -- of glass stegall. i'm also a cosponsor of the safe banking act offered by senator brown and kaufman that would limit the size of banking institutions.

Tom Harkin

2:37:58 to 2:38:18( Edit History Discussion )

Tom Harkin: no more too big to fail. in addition, i support legislation by senators merkley and levin that block institutions that are insured by the fdic from proprietary trading with their own money, with their own funds. we just can't have these big banks playing with their money if it's backed by the taxpayers of this

Tom Harkin

2:38:19 to 2:38:41( Edit History Discussion )

Tom Harkin: again, mr. president, america has been through financial collapses and deep economic downturns before, but we learned in the great depression, we learned. implementing tough new regulations to stabilize the financial system, rein in risk taking and recklessness on wall street, make the economy work for ordinary americans.

Tom Harkin

2:38:42 to 2:39:03( Edit History Discussion )

Tom Harkin: because of those -- those reforms made in the 1930's, we had decades of shared economic prosperity unprecedented in our nation's history. and then we threw it all 11 years ago. what we did in the 1930's needs to be our model. not the same, but it's a different system.

Tom Harkin

2:39:04 to 2:39:25( Edit History Discussion )

Tom Harkin: it needs to be our model as we shape today's financial reform legislation. financial reform legislation ought to separate these big entities out. we can't have too big to fail. we need to hav transparency. we need to stop banks from engaging in swaps and derivatives back and forth if they are backed by the fdic. now, these amendments, the cantwell amendment, the merkley

Tom Harkin

2:39:26 to 2:39:47( Edit History Discussion )

Tom Harkin: amendment and others that i happen to be supporting, again we can't offer it u?oess we get the bill to the floor. i don't know if we'll win or not on those, but we ought to have the right to offer those amendments. i tell you, i -- i just want to thank senator dodd. he has been in the forefront of this fight for a long time, trying to bring this bill to the

Tom Harkin

2:39:48 to 2:40:08( Edit History Discussion )

Tom Harkin: floor to crack down on all of this speculati, to put regulati in there, to have a good consumer protection agency out there to protect our consumers. senator dodd has led this effort, and inow where his heart is. i know how he is trying to make sure that this system works for everybody, not just wall street.

Tom Harkin

2:40:09 to 2:40:30( Edit History Discussion )

Tom Harkin: and i don't know, i don't want to be in the role of wall street all the time. i know that's a popular sport. wall street has a role to play in our society. they sure do. they are a fountain of investments on a large scale. i have no problem with that. my only problem is with some of the dealings they have been

Tom Harkin

2:40:31 to 2:40:52( Edit History Discussion )

Tom Harkin: doing with the swaps and derivatives and things like that. but let's get wall street back to what wall street does t best -- accumulating capital, economic

Tom Harkin

2:40:59 to 2:41:20( Edit History Discussion )

Tom Harkin: us to pro i don't mind speculating wit get too big to fail, their right, but why not let the bill come to the floor so debate it and amend it? if they want to change it, let them offer amendments. but you can't do that unless we

Tom Harkin

2:41:21 to 2:41:41( Edit History Discussion )

Tom Harkin: bring the bill to the floor. i hope the american people understand this. i hope they understand that that side of the aisle, the publicans, will not let this bill even come to the floor for debate and vote. i say to my friend and my colleague, senator dodd -- the presiding officer: the senator has used his seven minutes. mr. harkin: i ask one more minute. the presiding officer: without

Tom Harkin

2:41:42 to 2:42:02( Edit History Discussion )

Tom Harkin: objection, so ordered. mr. harkin: i say to my friend senator dodd, i thank you for all the hard work you have put into this, you and your staff and your committee. this is a good bill. we may not agree on every little dot and tittle of it. but this is a good bill, it's a solid bill.

Tom Harkin

2:42:03 to 2:42:23( Edit History Discussion )

Tom Harkin: it will help us get control back again over wall street and all the wild speculation, and it will help our country grow as it should. not in one small area, but broadly based economic growthn our country. so i thank senator dodd for his great leadership on this. i just hope my republican friends will understand that we have to get floor and we have to protect the

Tom Harkin

2:42:24 to 2:42:26( Edit History Discussion )

Tom Harkin: american people from these

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