May 6, 1999, Senator Dorgan predicts the future:

[LSK]

The following is from a speech he made on the Senate Floor that day:

I spoke earlier today about this legislation, which is called the Financial Services Modernization Act of 1999, and said then that I am probably part of a very small minority in this Chamber, but I feel very strongly that this is exactly the wrong bill at exactly the wrong time. It misses all the lessons of the past and, in my judgment, it creates definitions and moves in directions that will be counterproductive to our financial future.

What does this bill do? It would permit common ownership of banks, insurance, and securities companies, and to a significant degree commercial firms as well. It will permit bank holding companies, affiliates, and bank subsidiaries to engage in a smorgasbord of expanded financial activities, including insurance and securities underwriting, and merchant banking all under the same roof.

This bill will also, 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, family farmers, and others, and in some instances I think it inappropriately limits the ability of the banking and thrift institution regulators from monitoring activities between such institutions and their insurance or securities affiliates and subsidiaries raising significant safety and soundness consumer protection concerns.

This morning I described what is happening in the financial services sector by showing a chart of big bank mergers just in the last year. You couldn't help but to have picked up a daily paper at some point last year and read a headline about another bank deciding to combine or merge with another large bank.

April 6, Citicorp decided it was going to grab up Travelers Group and have a $698 billion combined asset corporation--not exactly a mom and pop, but two big very successful companies decide they want to get hitched.

NationsBank apparently fell in love with BankAmerica. Bank One decided it wanted to be related to First Chicago, and Wells Fargo likes NorWest. So we have merger after merger, buyout after buyout, and the big banks get bigger.

We already have a circumstance in this free market economy of ours in which you ought to have easy entry and easy exit into the marketplace and the right to make money and to lose money. We already have a circumstance in banking called ``too big to fail.'' If you are big enough, the ordinary market rules don't apply to you. You have the old Federal Reserve Board out there. And the Fed says we have a list of banks that are ``too big to fail,'' meaning they have become so big that if they were to fail and made some pretty dumb decisions, lose a lot of money, that their failure would be so catastrophic and such a shock to the economic system in this country that we couldn't possibly let that happen. So we have a list of banks at the Federal Reserve Board. That list says these banks are ``too big to fail''--no-fault capitalism. But the list is growing. That list of ``too big to fail'' banks in America is growing because the big banks are getting bigger, and this record-breaking orgy of mergers in our country moves now at an accelerated rate unabated.

In the context of all of this--it is not just with banks but all financial services companies--at a time when banks, investment banks, underwriters of securities, insurance, and others are showing very handsome profits in our country, we are told, ``You know, what is really wrong here with America is we need to modernize this system. The lack of modernization is hurting us. In fact, some U.S. banks are able to do things overseas they can't do here. What a shame. It is awful to hold them back,'' we are told. ``So let us modernize.''

Everytime I try to link something from thomas.gov,it fails, to find it go to http://www.thomas.gov/home/r106query.html and search Senator Dorgan and the date.

Link to vote on Financial Services Modernization bill http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=106&session=1&vote=00105

Update: Better link thanks to slipslidingaway: http://www.c-spanarchives.org/congress/?q=node/77531&id=8629955

[Renew Deal]

1. That's an amazing find!

:yourock:

[mrreowwr_kittty]

2. He sure called it, didn't he? nt

[slipslidingaway]

3. Thanks...

"...This bill will also, in my judgment, raise the likelihood of future massive taxpayer bailouts..."


Also, video and transcript at link.

http://therealnews.com/t/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=2469

"...DORGAN: I worry very much that the fusing together of the idea of banking, which requires not just safety and soundness to be successful but the perception of safety and soundness—. But to merge it with inherently risky speculative activity is in my judgment unwise. There are some notions that represent transcendental truths, that are true over time, and one of those, in my judgment, I fervently believe, is that we are with this piece of legislation moving towards greater risk. We are almost certainly moving towards substantial new concentration and mergers in the financial services industry. That is almost certainly not in the interests of consumers, and we are deliberately and certainly with this legislation moving towards inheriting much greater risk in our financial services industries. And so I come to the floor to say that I regret that I cannot support the legislation. I think we will, in ten years' time, look back and say we should not have done that, because we forgot the lessons of the past.

TEXT ON SCREEN: Nine years later... On September 23, 2008, Senator Dorgan warned against passing the $700 billion bailout plan Paulson put before Congress.

September 23, 2008

DORGAN: I don't believe that we should be stampeded here. People started thinking yesterday, some of the analysts started thinking, well, what if you added the $700 billion on top of all the other guarantees, taking it to $11.3 trillion indebtedness, and just keep pushing money out there? What happens to the value of the dollar? And so does that diminish the value of the dollar? Does it begin to persuade people that maybe this currency collapses? Maybe the electronic herd runs against the dollar? What are the potential consequences of doing this without some notion or some reasonable certainty that this would work?"

[formercia]

4. Only one Dem voted for it.

Hollings (D-SC).

Hang this around the GOP's neck and let it rot.

[slipslidingaway]

5. From the C-Span archives

All of the Senate session for May 6, 1999, hope the link works.

http://www.c-spanarchives.org/congress/?q=node/69850&date=1999-5-6&hors=s


Link to this particular speech, transcript and video.
http://www.c-spanarchives.org/congress/?q=node/77531&id=8629955

Direct video link
http://www.c-spanarchives.org/library/index.php?main_page=product_video_info&products_id=123081-1&showVid=true&clipStart=16778.00&clipStop=19085.00


Another snip...

"...This is a highly complicated issue. I know there are big stakes all around. We have the biggest economic interests in the country working very hard to see their interests are served versus other interests.

I understand all that, and I understand my view is not the prevailing view. George Gobel once said: ``Did you ever think the world was a tuxedo and you were a pair of brown shoes?'' I feel like George Gobel on this issue.

I understand this bill is on the floor, and it is going to get passed by the Congress. People do not want to entertain this notion, that, gee, there might be some inherent risk out here. This is a case, as I said earlier, of deciding this is where the industry has decided it wants to go, so let's go ahead and put a lodge up so we can accommodate all their interests and where they want to be.

We have been through this before. Where they want to be is not necessarily where this country ought to have them. This country ought to be concerned about safety and soundness of its financial institutions first and foremost. That does not fit--it has never fit--with the understanding that you can merge the interests of banks and other financial and economic activities that are risky.

When you put things together that require safety and soundness with enterprises that have an inherent high risk, you are begging for trouble, and this country will get it. Our banks say to us, ``Well, others have done it; you can do it in other countries.'' Do you want to trade our economy for any other country at the moment? I don't think so. What they are doing in other countries is not the litmus test for what we decide as Americans to do to strengthen our economy, and this bill, in my judgment, if passed, will represent a giant step backward for our economy.

Let me ask one additional question. With all of the debate that I have heard since this legislation came to the floor of the Senate, do you know I have not heard anything about whether or why or if this bill is good for people. Nothing. I wonder if anybody can describe one single thing in this legislation that will be helpful to ordinary folks?..."


******FWIW - How to use the C-Span Video library

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=308x690

To find prior years click on the month under "Congress Calendar" and you will then get a page listing all months for this year, use the "PREV" button for prior years.

[LSK]

7. wow, cool, I was wondering about CSPAN archives going way back

Thanks!

[slipslidingaway]

12. Not sure how far back it goes, I scrolled back to 1995 today...

I understand about thomas, I've had to go to the pdf section and then use that link.

C-Span has a great site and most of the time they have the transcript and the video, something to play around with in our spare time :)

You're welcome.

[no limit]

6. First time I heard of this guy. Looked around a bit and he seems like he's really sharp

someone put him in charge of this economy, at least he saw this coming.

[L. Coyote]

17. Dorgan was pushing for excess profitts taxes on Big oil too, before the price went up

One of my favorite quotes of his is from the Abramoff hearings, "I may be from a small town, but I think I know a big lie when I hear one." He sure does!!

Look up Dorgan's floor speech, Oct 31, 2005, during the Rosa Parks memorial. He is also on top of Bushco Big Oil corruption.

[no limit]

18. thanks, I'll do that.

[burythehatchet]

8. Thanks. I plagarized your post in another blog

[LSK]

9. by all means, plagarize away

Congressional record is public and free to copy anywhere.

[L. Coyote]

16. But, watch the spelling. Plagiarize is correct.

Plagiarism is something I learned far too much about by teaching college classes.

[HCE SuiGeneris]

10. K & R

Great find.

[Stuart G]

11. K and R

[Greyhound]

13. K&R

[slipslidingaway]

14. Adding this DU link with some additional information on the bill

and the votes.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4029575&mesg_id=4029575

[LSK]

15. more...........

The reason I offer this is to say we are now talking today on the floor of the Senate about a strategy that says we want to ignore the lessons of history. We want to ignore the fact that in the go-go 1920s, everybody was making money at about everything, and banks decided to fuse their activities and be involved not just in banking, but also in underwriting securities and a range of other very risky enterprises. We are going to ignore those lessons we learned during that period.

When studies were done to determine what happened in the 1920s, one of the things they discovered was what you expect. If you have something called banks whose perception of safety and soundness is at the root of their stability and viability, when banks are fusing their activities with inherently risky activities--underwriting securities, for example--ultimately those kinds of risks, those bets that exist, overcome the perception and the reality of safety and soundness, and people begin getting
worried and nervous and pulling their money out of banks and we have bank failures.

So the Congress in the 1930s passed a bill called Glass-Steagall which said: Learn the lessons; my gosh, let us not put activities together with banks that are so inherently risky. We should separate them forever.

So we did. And we prohibited certain kinds of investment and acquisition by banks and required that certain enterprises do business and compete in their own sphere. Banks were prohibited from being involved in most of the securities issues, underwriting securities and insurance and more.

Over the years that served this country pretty well. Banks have made the case in recent years--and they are right about this--everybody else has wanted to invade their territory. Everybody now wants to be a bank. If you are selling cars, you want to finance the cars; you want to be a bank. Everybody wants to create some sort of homogenized one-stop station where people can buy their insurance, buy their home, finance it. So banks say people are intruding on their turf and the only conceivable
way we can compete is if we can compete on their turf as well. They want Glass-Steagall repealed.

Guess what? Here it is. The bill that sits on the floor of the Senate today repeals Glass-Steagall. It forgets apparently 60 or 70 years of history. It will all be all right. Don't you see, the economy is growing, unemployment is down, inflation is down, the stock market is up. Don't you understand, Senator DORGAN?

I guess not. Maybe I am hopelessly old fashioned. I think it is a fundamental mistake to decide to repeal Glass-Steagall and allow banks and all of the other financial industries to merge into a giant smorgasbord of financial services. Those who were around to vote to bail out the failed savings and loan industry, $500 billion of the taxpayers' money, are they going to want to be around 10 or 15 years from now when we see bailouts of hedge funds putting banks at risk? Or how about the banks not just bailing out a hedge fund but banks having the ownership of the hedge funds?

http://www.c-spanarchives.org/congress/?q=node/77531&id=8629955

[slipslidingaway]

19. Senator Wellstone on 5/4/1999

http://www.c-spanarchives.org/congress/?q=node/77531&id=8628477

Video link
http://www.c-spanarchives.org/library/index.php?main_page=product_video_info&products_id=123039-1&showVid=true&clipStart=0.01&clipStop=3700.00

"Mr. President, I will be spending some time on S. 900, but I also, in my remarks today, will be focusing on the question of when the Senate is going to start dealing with issues that affect ordinary citizens. I think that is what people in Minnesota would like to know.

This is called the Financial Services Modernization Act. I have no doubt that the large banks and lending institutions are all for this. The question I have is, When are we going to come out here with legislation that benefits ordinary citizens?--which I mean in a positive way. I will come back to this later on...

...Instead, we are out here on the floor talking about the Financial Services Modernization Act of 1999, the big bank act, the large conglomerate act, the large financial institution act. When are we going to be out here talking about affordable child care, or about raising the minimum wage? When are we going to make sure people get decent health coverage? When are we going to talk about providing more funding for the Head Start Program? When are we going to be out here talking about how to reduce violence in homes, and in schools, and in our communities? When are we going to be out here talking about something that makes a difference to ordinary people?

Now, Mr. President, I understand that all of the trade groups support this legislation--that is to say, all of the financial services groups. But I rise in strong opposition to this legislation called the Financial Services Modernization Act of 1999.

This bill, S. 900, would aggravate a trend toward economic concentration that endangers not only our economy, but, I think, more importantly, it endangers our democracy. S. 900 would make it easier for banks, securities firms, insurance companies, and, in some cases, commercial firms, to merge into gigantic new conglomerates that would dominate the financial industry.

Mr. President, this is the wrong kind of modernization at the wrong time. Modernization of the existing, confusing patchwork of laws, regulations, and regulatory authorities would be a good thing; but that is not what this legislation is really about. S. 900 is really about accelerating the trend toward massive consolidation in the financial sector.

This is the wrong kind of modernization because it fails to put in place adequate regulatory safeguards for these new financial giants whose failure could jeopardize the entire economy. It is the wrong kind of modernization because taxpayers could be stuck with the bill if these conglomerates become ``too big to fail.'' We have heard that before--``too big to fail..."


... I think we are flirting with disaster. We are strolling casually along the upper decks of the Titanic, oblivious to the dangers ahead of us. Remember, the Titanic in its day symbolized the ultimate triumph of technology and progress. Just like these new financial conglomerates, it was considered ``too big to fail.'' Because everybody assumed this flagship of Western technology was unsinkable, they saw no need to take ordinary precautions. They disregarded the usual rules of
speed and safety, as Congress is now doing with S. 900. And they failed to store enough lifeboats for all the passengers, which reminds me of nothing so much as the repeal of the welfare entitlement..."

[Mnemosyne]

20. And We the People are now their lifeboat. We were never passengers

to begin with.

Dorgan is a wise man. They should have listened...

[slipslidingaway]

22. So true and a decade later the financial institutions are

becoming even more powerful and too big to fail.

[Mnemosyne]

23. Completely sickening and who suffers? We the People, of course.

Sigh...

Have a good evening, ssa! :hi:

[slipslidingaway]

25. Yup...

thanks...you too!

:hi:

[pleah]

21. K&R

[20score]

24. Bookedmarked this! K&R.