Wall Street Round 2: Heartland Industrialists Vs. Wall Street Financiers

Floor Speech

Ms. KAPTUR. Mr. Speaker, who thrust Chrysler into bankruptcy? A few Wall Street investors who wanted more return on their investment as opposed to taking the government's deal.

Who can't get loans to pay their employees or retool their businesses in this new economy? Heartland industrialists.

Throughout our country, and especially in regions where manufacturing built the middle class, the credit crisis has subjugated production to Wall Street financiers. The warning signs were present when the Big Three automakers were changed from production companies to cash cows and transformed into financing companies back in the 1990s.

In Toledo, Ohio, automobile production started 100 years ago when John North Willys bought the Pope Motor Company factory and started turning out automobiles in our region.

When General George Marshall ordered production of a rough-and-ready vehicle for American troops to win World War II, Willys won the competition, and we made hundreds of thousands of Jeeps in Toledo, and we continue to do that today. Toledo workers make the best-known brand in the world.

Control of Chrysler, however, went to Daimler, and then to an uncaring hedge fund known as Cerberus.

Who is Cerberus? No one knows. Worse yet, Cerberus even has a seat on the trust created to handle the United Auto Workers' 55 percent investment in Chrysler. But the UAW doesn't even have a seat, and it's their money.

Wall Street, again, will call the shots, not the people whose money they hold.

By the late 1990s, the auto companies were profitable on paper, but only through their financing arms, because their Wall Street handlers had rigged the Tax Code, through this place, to benefit car leasing, fleet leasing, and financial activities. And you can trace the recent demise of GM and Chrysler, discounting the equally devastating trade and tax policies that bore down on them, to the year that they became financing companies, not production companies.

Wall Street started to accumulate and milk the wealth of these firms. When GMAC became a mortgage lender and sucked into Wall Street's subprime lending in the late 1990s, then acquired by Cerberus, their fate was sealed. Chrysler Financing is now subsumed under Cerberus, too, as has been GMAC for quite a while.

It is true that the public wanted more energy-efficient vehicles, and the Big Three failed to produce them. However, this goes back to management who were in cahoots with Wall Street and the role of Big Oil.

You can look at all of the green patents that these firms filed, evidence of the industrial people, men and women inside these companies trying to beat back the Wall Street house.

Why, in Europe, are the majority of cars diesel, but not here?

Why, in Brazil, are flex-fuel vehicles made by GM the norm but not here?

I will tell you why. Because lots of people made money off the ``gas hog'' cars of America. Global oil companies certainly did. And as oil companies merged and went global, many Arab sheiks got filthy rich by recirculating their petro dollars through, guess where, our own Wall Street houses. Their wealth grew so huge they constitute one-seventh of reinvested global capital that today props up our economy.

This goes way back to the time of Richard Nixon and Secretary of State Henry Kissinger, whose secret U.S.-Saudi agreements were signed through the Treasury to denominate Middle East oil sales in dollars, thus assuring petro dollar reinvestment in this country's financial system and saddling the American people with gas hogs for years to come, because gas hogs meant more oil sales. The more oil sold, the more Wall Street got petro dollars to recirculate.

Gradually, we became more and more embroiled in the Middle East, where our troops stand today, over 150,000 of them. And more energy-efficient cars would mean less deployment of U.S. troops to places they shouldn't be in the first place. But Wall Street doesn't like that game. They'd lose too much money and their greed would not be fed.

Beyond diminishing our Nation's innovation, this dependence also wed our country to a diminishing resource found in these unstable, undemocratic nations. For too long, it is has compromised the integrity of the industrial might of regions like I represent in a critical sector of our economy, as well as our defense base.

What great industrial Nation does not have a thriving automotive and vehicular sector?

Wall Street continues to sell out our heartland. Let me repeat that. Wall Street continues to sell out our heartland, sell out our companies, sell out our workers. I hope the American people begin paying attention to whom really has the reins of power in this country, and it's time the American people reassumed that power to themselves.

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