Speaker Pelosi addressed reporters this morning on the current financial crisis:
One thing is clear: George Bush and John McCain have no credibility when it comes to the economy. Just the brevity of the President’s statement. We wondered if he was ever going to come out of hiding on this subject. He came out and in one minute he said very little. What was expected was an explanation to the American people of what has happened because it has a direct impact on their lives. What would be hoped for would be an apology to the American people for the situation that we’re in.
George Bush and John McCain, as I said, they have no credibility. How else could John McCain in the midst of the greatest financial crisis since the Great Depression tell the American people, “the fundamentals of our economy are strong”? What could he have been thinking? George Bush and John McCain neither understand the economic hardships facing Americans, nor do they have solutions to address the crisis.
You know that much of this happened because of lack of regulation, lack of oversight in terms of the Administration making sure that these financial institutions were capitalized as they took risks.
This is what this is. This is the failure of an ideological “anything goes” economic policy. They call it the free market. Democrats support the free market and we want to encourage the markets. But it’s not a free market when you can run wild, anything goes, privatize the gain, nationalize the risk and when you fail, the middle class bails you out. It’s just not fair. It’s just not right.
So when John McCain says, when he told the Wall Street Journal, “I am the greatest deregulator you’ll ever interview,” what a sad boast. What a sad boast. Especially in light of the consequences of that deregulation.
To aggressively address the final crisis, we will investigate the Bush Administration’s mismanagement of financial market regulation, how it led to this crisis, and what solutions Congress can act upon. We hope we can work together with the Administration on this, that they will have some positive initiatives.
I have asked Congressman Barney Frank, the Chair of the Financial Services Committee, and Congressman Henry Waxman, the Chair of the Government Reform and Oversight Committee, to hold hearings this month it’s now almost October – this month and next, that will involve the SEC, the Secretary of the Treasury, Chairman Bernanke, as well as executives of AIG, Lehman Brothers.
And Chairman Spratt will also hold hearings on the possible implications for the federal budget. Eighty five billion dollars. Where is that money coming from? What is its impact on our deficit? What are the opportunity costs of that money to invest in the education of our children and all of the things that we want to do domestically?
Why, is this one of the reasons why they had to bail out AIG was because of foreign banks in both Europe and Asia were saying that they had such a stake in AIG in their own countries. Well, where are they? Why are they not participating in this bailout?
So we want to know. What is the impact on our budget and our investments in America? Why are these foreign financial institutions not participating in this bailout, if in fact it related to the stability of their markets? Why does one person, without criteria or transparency, have the ability to grant $85 billion in a bailout without the scrutiny, the transparency that the American people deserve?
And how does this work? I mean, can the private this is a private company, a private company can they just run wild? Again, anything goes? And when they fail, they are too big to fail and the taxpayer pays the price. It all comes back to the middle class. It all comes back to the middle class: the pain, the pay for, and the diminishment of prospects for the future.
So, I’m quite concerned about what we can do to instill confidence back in the markets. The markets, on the first day at least, reacted very unfavorably to the bailout. There is something wrong with this picture. And again we hope that the hearings will reveal how we got here in the first place and how we shouldn’t get here again.