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talkpoliticsC-SPAN Interview with
Rep. Paul Kanjorski
D-Pennsylvania, 11th District
Capital Markets Subcommittee Chair
Filmed on: [circa December 2008]
1:52 elapsed time in video
C-SPAN: What would you say, though, then to someone who says "Paul Kanjorski is supporting Wall St. but not Main St. with this latest $825 billion package now making it through the house?"
2:01 elapsed time in video
KANJORSKI: They are right to this extent--why did we do that? We did that because the Secretary--look I was there when the Secretary and the Chairman of the Federal Reserve came those days and talked with members of Congress about what was going on. It was about September 15th.
Here's the facts and we don't even talk about these things. On Thursday [September 18th 2008--the day the stock market fell] at about 11 O'clock in the morning the Federal Reserve noticed a tremendous draw down of money market accounts in the United States to the tune of $550 billion—was being drawn out in a matter of an hour or two. The Treasury opened up its window to help--they pumped $105 billion in the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks.
They decided to close the operation--close down the money accounts and announce a guarantee of $250,000 per account so there wouldn't be further panic out there. That's what actually happened. If they had not done that their estimation was that by 2 O'clock that afternoon $5.5 trillion would have been drawn out of the money market system of the United States. It would have collapsed the entire economy of the United States and within 24 hours the world economy would have collapsed. Now we talked at that time about what would happen if that happened. It would have been the end of our economic system and our political system as we know it and that's why when they made the point
"we've got to act and do things quickly" we did.
Now Secretary Paulson said "Let's buy out these sub-prime mortgages". That's why he came to Congress--but he said "give us latitude and large authority to do many things as we decide necessary and give us $700 billion to do that." Shortly after we enacted our bill with those very broad powers the UK came out and said "No, we don't have enough money to buy toxic assets. Instead we're going to put our money into banks so their equity grows and they're not bankrupt." The UK started that process and that's true--it was much cheaper to put more money in banks as equity investments than to start buying their bad assets because it became early determined that we probably have to spend three or four trillion dollars of taxpayer's money to buy these bad assets. We didn't have--we only had $700 billion dollars. So Paulson made a complete switch--went in and started putting money in and buying securities and re-investing in the banks of the United States. Why? Because if you don't have a banking system you don't have an economy.
Although we did that it wasn't enough money and as fast as we did that the economy has been falling and the reason last week—we're really no better off today than we were three months ago because we've had a decrease in the equity positions of banks because other assets are going sour by the moment. Now we've got to make some decisions. Do we pour more money in? To what extent that money goes in? I myself think we ought to take the time, analyze where we are, have the people understand. When you listen to the lady who just got off the telephone she is near panic and she doesn't think her government is acting properly or acting in her behalf. I think it's important we start informing that lady as to what really were the facts, what happened and get input from her. Maybe she has a better idea. You know we're not any geniuses in economics or finance [???], we're representatives of the people. We ought to take our time but let the people know this is a very difficult struggle. Somebody threw us in the Atlantic Ocean without a life raft and we're trying to determine what's the closest shore and whether there's any chance to swim that far.
This is very unsettling to say the least. Either Kanjorski is a colossal liar or the part where he says "we don't even talk about these things" is freaking me out.
Rep. Paul Kanjorski
D-Pennsylvania, 11th District
Capital Markets Subcommittee Chair
Filmed on: [circa December 2008]
1:52 elapsed time in video
C-SPAN: What would you say, though, then to someone who says "Paul Kanjorski is supporting Wall St. but not Main St. with this latest $825 billion package now making it through the house?"
2:01 elapsed time in video
KANJORSKI: They are right to this extent--why did we do that? We did that because the Secretary--look I was there when the Secretary and the Chairman of the Federal Reserve came those days and talked with members of Congress about what was going on. It was about September 15th.
Here's the facts and we don't even talk about these things. On Thursday [September 18th 2008--the day the stock market fell] at about 11 O'clock in the morning the Federal Reserve noticed a tremendous draw down of money market accounts in the United States to the tune of $550 billion—was being drawn out in a matter of an hour or two. The Treasury opened up its window to help--they pumped $105 billion in the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks.
They decided to close the operation--close down the money accounts and announce a guarantee of $250,000 per account so there wouldn't be further panic out there. That's what actually happened. If they had not done that their estimation was that by 2 O'clock that afternoon $5.5 trillion would have been drawn out of the money market system of the United States. It would have collapsed the entire economy of the United States and within 24 hours the world economy would have collapsed. Now we talked at that time about what would happen if that happened. It would have been the end of our economic system and our political system as we know it and that's why when they made the point
"we've got to act and do things quickly" we did.
Now Secretary Paulson said "Let's buy out these sub-prime mortgages". That's why he came to Congress--but he said "give us latitude and large authority to do many things as we decide necessary and give us $700 billion to do that." Shortly after we enacted our bill with those very broad powers the UK came out and said "No, we don't have enough money to buy toxic assets. Instead we're going to put our money into banks so their equity grows and they're not bankrupt." The UK started that process and that's true--it was much cheaper to put more money in banks as equity investments than to start buying their bad assets because it became early determined that we probably have to spend three or four trillion dollars of taxpayer's money to buy these bad assets. We didn't have--we only had $700 billion dollars. So Paulson made a complete switch--went in and started putting money in and buying securities and re-investing in the banks of the United States. Why? Because if you don't have a banking system you don't have an economy.
Although we did that it wasn't enough money and as fast as we did that the economy has been falling and the reason last week—we're really no better off today than we were three months ago because we've had a decrease in the equity positions of banks because other assets are going sour by the moment. Now we've got to make some decisions. Do we pour more money in? To what extent that money goes in? I myself think we ought to take the time, analyze where we are, have the people understand. When you listen to the lady who just got off the telephone she is near panic and she doesn't think her government is acting properly or acting in her behalf. I think it's important we start informing that lady as to what really were the facts, what happened and get input from her. Maybe she has a better idea. You know we're not any geniuses in economics or finance [???], we're representatives of the people. We ought to take our time but let the people know this is a very difficult struggle. Somebody threw us in the Atlantic Ocean without a life raft and we're trying to determine what's the closest shore and whether there's any chance to swim that far.
This is very unsettling to say the least. Either Kanjorski is a colossal liar or the part where he says "we don't even talk about these things" is freaking me out.
(no subject)
Date: 7/2/09 18:12 (UTC)(no subject)
Date: 8/2/09 01:08 (UTC)Yep, they sure did fix things for us.
But wait, wasn't it Bush's advisors who told him Iraq had Weapons of Mass Destruction?