Kanjorski Comments On Wall Street In Rolling Stone

Feb. 23–U.S. Rep. Paul Kanjorski was quoted in an extensive story in Rolling Stone magazine about the Wall Street bailout and how the banks are creating another scenario for a financial disaster.

Writer Matt Taibbi authored a scathing article on Goldman Sachs’ chief executive Lloyd Blankfein receiving a stock-based bonus of $9 million in 2009. The article was titled “Goldman Sachs and other big banks aren’t just pocketing the trillions we gave them to rescue the economy — they’re re-creating the conditions for another crash.”

Taibbi wrote: “But here’s the thing. Despite all these trillions in government rescues, despite the Fed slashing interest rates down to nothing and showering the banks with mountains of guarantees, Goldman and its friends had still not jump-started lending again by the first quarter of 2009.”

Kanjorski appears twice in the article.

The first reference followed this paragraph: “Collectively, all this largesse was worth trillions. The idea behind the flood of money, from the government’s standpoint, was to spark a national recovery: We refill the banks’ balance sheets, and they, in turn, start to lend money again, recharging the economy and producing jobs.”

Kanjorski is quoted saying, “The banks were fast approaching insolvency.” Kanjorski is a vocal critic of Wall Street who nevertheless defends the initial decision to bail out the banks. “It was vitally important that we recapitalize these institutions.”

The second reference appears near the end of the article. The author states: “And what should really freak everyone out is the fact that Wall Street immediately started skimming off its own rescue money. If the bailouts validated anew the crooked psychology of the bubble, the recent profit and bonus numbers show that the same psychology is back, thriving, and looking for new disasters to create.”

Kanjorski then says, “It’s evidence that they still don’t get it.”

“It is a sign of the difficult economic times that we are in, that so many more people are interested in my work, particularly regarding reforming Wall Street and preventing ‘too big to fail’ companies from existing,” Kanjorski said.

Kanjorski said he has always worked to speak openly to the American public about what Congress is working on.

“Now, the only difference is that more people are listening,” he said.

Last year Kanjorski, D-Nanticoke, chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, expressed aggravation and disappointment about reports that American International Group (AIG) would pay $100 million in bonuses to employees.

The Kanjorski amendment — now referred to as the “too big to fail” amendment — is part of the Wall Street Reform and Consumer Protection Act. It was included in the act that passed the House in December.

It would empower federal regulators to rein in and dismantle financial firms that are so large, interconnected or risky that their collapse would put the entire U.S. economic system at risk.

Kanjorski also supports President Obama’s proposed Financial Crisis Responsibility Fee or bank tax, which would require the largest Wall Street firms to pay back taxpayers for the assistance they provided to aid economy, so that does not add to the deficit.

Bill O’Boyle, a Times Leader staff writer, may be reached at 829-7218.

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