Washington, DC—Senate Majority Leader Harry Reid made the following remarks today on the Senate floor to mark the one year anniversary of the collapse of Lehman Brothers. Below are his remarks as prepared for delivery:
“One year ago today, our economy came precariously close to its breaking point – as close to the brink as it had in generations. One year ago today, Lehman Brothers, part of the foundation of Wall Street for more than a century and a half, collapsed.
“Much is being made of this anniversary. The media are dedicating significant amounts of airtime, newsprint and bandwidth to analyzing what it means, to recording how far we have come since that day and to prescribing the work we still have before us. President Obama went to Wall Street today to reiterate the importance of strengthening the system that keeps financial firms in check.
“But as significant as this occasion is, it is critical to remember that the economic crisis was not created in one day. As dramatic as it may sound, the reality is that our economy did not wake up on the morning of September 14 and suddenly find itself in the emergency room.
“In fact, this was a long time coming. The Lehman collapse was simply the final straw that broke a vulnerable economy’s back, the final spark that ignited a highly flammable and flawed system.
“The conditions that created this crisis had been brewing for years. A lethal combination of government deregulation and industry irresponsibility meant Wall Street could run wild. And run wild it did.
“Greed, excess and reckless risk ruled the day. Disdain for government oversight – even though the singular purpose of oversight is to protect the people – was in vogue. Loopholes were exploited. And when the rules didn’t offer any loopholes, those rules were broken.
“More than a year and a half before his company’s collapse, a Lehman executive told his boss just how risky the mortgages that had artificially inflated their business were. He knew the bubble was bound to burst. And he knew that once the housing market fell, it would fall onto the nearby dominoes in the banking markets and credit markets. He saw it coming.
“Bear Stearns knew as early as 2005 that the complicated loans it packaged were too good to be true. The Securities and Exchange Commission saw the warning signs, started an investigation, but then dropped the case. They saw it coming, too.
“But the industry didn’t act alone. For years, the previous administration put the interests of Wall Street before those of Main Street.
“The mantra of the last eight years was deregulation, deregulation, deregulation. The last White House refused to police lenders when they deceived and defrauded Americans looking for loans, and neglected to protect consumers when we were being abused.
“The previous administration did nothing while Wall Street traders bid up the price of oil, took windfall profits and left the tab for the rest of us – a Republican idea Warren Buffett called ‘financial weapons of mass destruction.’
“Instead, it sat and watched while the sub-prime mortgage market sent millions into foreclosure – and nowhere worse than in Nevada.
“It gave tax breaks to the wealthiest Americans, but gave no thought to how we would make up for the lost revenue.
“It looked the other way while the executives who got us into this mess took home bonuses and golden parachutes, and continued to look the other way while taxpayers, consumers and investors were taken to the cleaners.
“It declared war on fiscal responsibility and accountability. It said ‘anything goes’ – but all Americans saw go were their jobs, their homes and their economic security.
“It simply refused to safeguard the American people from an impending crisis clearly visible on the horizon.
“It was a time of blissful ignorance at best and willful neglect at worst.
“The hardworking Americans who lost everything did nothing wrong. But their leaders did nothing, period.
“We all know what happened next: our economy was paralyzed and credit was frozen. Families and businesses were forced to make painful cuts, cuts that were felt in every corner of our country and every industry in our economy.
“The stock market lost a third of its value in 2008. Consumer confidence hit an all-time low as the cost of living went up and incomes went down. Families and financial institutions alike couldn’t pay the bills. People couldn’t get car loans, students couldn’t get college loans, and small businesses couldn’t grow their companies.
“Economic experts from Nobel Prize winners to former Cabinet Secretaries to Ivy League professors said that we needed to act fast to keep a bad situation from getting worse.
“And despite it all, those in the Bush White House and some Republicans here in Congress told us the economy was fundamentally sound at a time it was fundamentally flawed.
“The history books will tell the tale of what happened in the weeks and months after September 14, 2008: Major investment banks that for decades anchored Wall Street simply disappeared. Institutions that were once synonymous with success became synonymous with distress. And America took unprecedented steps to stabilize a bleeding economy.
“But the history books will also tell the tale of what happened before September 14, 2008. And the singular lesson from that gilded age is that we cannot wait until a system collapses before we act to save it.
“Today, the system headed for its breaking point is the health insurance system.
“We have already seen what happens when we do nothing about rising health care costs and reckless health insurance policies. We have already seen what happens when we let the market take care of itself, as some of our Republican colleagues have urged us to do.
“Over the past eight years of inaction, the price of staying healthy in America rose to record levels, and the number of Americans who can’t afford insurance did the same.
“For the millions of families who file for foreclosure because they can’t afford both their house and their health care, not acting is not an option.
“For the millions of Americans who file for bankruptcy because their medical bills grow higher and higher, not acting is not an option.
“For the millions of Americans who skip doctor visits or treatments they need to stay healthy – or who never fill the prescriptions their doctor gives them – because health care is simply too expensive, not acting is not an option.
“For the 600,000 Americans – including 46,000 Nevadans – who, we learned last week, joined the ranks of the uninsured between 2007 and 2008, not acting is not an option.
“That is a lesson we need to hear extra loud today. We again see the storm clouds gathering – this time, they hover over our unhealthy health care system. We again can predict the very real, very painful consequences of not acting. We again see disaster, but again, one that is avoidable. And again, we have a choice.
“If we learn the lessons of the financial crisis, the choice we will make is to put the future of the American people first.
“We will choose to recognize that working people – not greedy executives – are the backbone of our economy, and we will choose to give them the security and stability they deserve.
“We will choose to act in the short term for the sake of the long term.
“We will choose to put the American people first, and fulfill our fundamental duty to promote their well-being.
“We will choose to keep the insurance companies and government bureaucrats out of your medical decisions.
“We will choose to keep health care companies honest and accountable.
“We will choose to give you more choices in your health coverage.
“And we will choose to make quality, affordable care available to every single American citizen.
“Those in Congress who think we can’t afford health insurance reform sound an awful lot like those who didn’t want to risk the windfall profits they earned during Wall Street’s heyday.
“Those in the health insurance business who let their profits and bonuses – rather than their conscience or ethics – guide their decisions sound an awful lot like those who got us into this mess in the first place: those who saw all the warning signs and stuck their heads in the sand.
“This country has no place for those who hope for failure, and this time has no patience for those who seek more of the same failed ideas.
“George Santayana famously said that ‘Those who cannot remember the past are condemned to repeat it.’ And my response to those who want to ignore the lessons of the last year is simply: We can’t afford to let history repeat itself.”