US Rep John Larson’s constituents were angry Wednesday night. After they waited patiently for Larson and his local panel of experts to stop talking they wanted some answers about how the US economy got here.
Jerry Dolan of Bristol said he wanted to know what happened to the cash? If more than 95 percent of people are paying their mortgages, then where is that money going? he asked.
Larson attempted to explain it by talking about how the problem is two-fold. On one hand, the mortgage crisis resulted in excess paper “sold, bundled, and resold,” he said.
On the other hand, Larson referenced a conversation he had with United Technologies Corp. Board Chairman George David who explained to him the cost of business went up overnight. Larson said UTC is big enough to bear the increase in costs, but is worried about its supply chain.
“Did anyone understand that?” Dolan asked after Larson attempted to answer his question.
Next up, was John Patrick President and Chief Executive Officer of Farmington Savings Bank, who explained that the crisis is “market to market accounting.” He said he has to maintain certain capital levels and when the secondary mortgage market collapsed so did the market’s confidence and along with it the amount Fannie and Freddie Mac were paying on mortgage bonds.
Douglas Glazier of Windsor Locks said over the past four years Congress was warned by a number of people about the subprime mortgage situation. He said it’s beyond his comprehension to understand “how this couldn’t have been seen?”
“The fox is guarding the hen house,” Larson said. He said while Congress was aware of the subprime mortgage situation, “Americans were thriving in that environment.”
“But for the housing market things would be different,” Larson said.
One young man seen here in above video wanted to know why Congress would leave Chairman of the Financial Services Committee US Rep. Barney Frank, D-Mass., in charge because he’s perceived by some as one of the people who contributed to the current crisis.
Larson defended Frank and reminded his constituents that Frank has only been in charge for the past 18-months. He said before that Frank was not the chairman because the Democratic Party did not hold the majority in Congress until recently.
In his opening comments Larson said he understands the outrage and anger over the “rescue mission, mislabeled as a bailout.”
Referring to Monday’s vote where the proposal was defeated 228 to 205, he said “not to act even with an imperfect plan was not the right thing to do.”
Doing nothing, “is too severe,” he said. “My belief is that this requires action.”
Stephen Fournier, the Green Party candidate challenging Larson for his seat, said, “So we give them the money now and regulate them later?”
Larson said regulation requires specific legislation. He said Congress will be going back to address some of these things like bankruptcy protection for homeowners in foreclosure. Larson said the problem is this bill needs the Senate’s approval and the President’s signature. The delicate balance of getting the bill passed requires, “a certain amount of leverage and certain amount of politics,” he said.
Outside in the hallway, after Larson had departed for the airport, Fournier said he thinks the Congressman made more arguments against the bill than for it. He said Larson was incoherent and the banker, Mr. Patrick, was even less coherent. He said he’s concerned that Larson is “sowing panic.”
Allyn Nelson of Windsor, who got to speak only after Larson had left to catch his flight back to Washington, said he thinks the bill was put together “much too fast.” He said he wants it explained to him in “terms we can understand.”
“What was in that 110 page bill?” Nelson asked.