Fallout: The Financial Crisis

Congressman: Bill prevents calamity

Marketplace Staff Oct 2, 2008
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Fallout: The Financial Crisis

Congressman: Bill prevents calamity

Marketplace Staff Oct 2, 2008
HTML EMBED:
COPY

TEXT OF INTERVIEW

Kai Ryssdal: California Republican John Campbell sits on the House Financial Services Committee. He voted yes on the original proposal on Monday. Congressman, welcome to the program.

John Campbell: Good to be with you, Kai.

Ryssdal: We’re gonna get to tomorrow’s vote in a second, but I want to back up to earlier this week and ask you, what the heck happened on Monday that this bill failed.

Campbell: This bill has been characterized in all media everywhere as a $700 billion bailout of Wall Street. It’s not and I’m happy to explain later, if you want, why I believe it’s none of those things, but as a result, the public believed that’s what it is, and they were calling offices and telling people in huge numbers, including my office, to vote against it. And then in the end, I think, both the Democratic and Republican leadership didn’t quite get it right, ’cause they’re not supposed to put a bill on the floor that they want to pass, unless they know they have the votes to pass it.

Ryssdal: As you know, the markets are doing so well today, Congressman. Do you think maybe Wall Street and the wider credit markets don’t believe you guys are gonna get it done tomorrow?

Campbell: I actually don’t think that’s what’s going on today. I actually think the markets probably have more confidence that it’s going to pass tomorrow than I do right now. What I think you’re seeing is, even if this bill passes and even if this bill works, the economy is bad. What the bill, if it works, if it works, is prevent calamity. I mean, it prevents a complete rapid meltdown, but even with the bill and if it works, we’re still likely to see an orderly drop into recession and the after effects of this credit crunch that’s going on. I mean, you’re hearing about it everywhere. Car loans being super expensive and drying up. Loans for solid businesses drying up. All those shocks are going to continue to be negative impacts on overall economic activity.

Ryssdal: Well, let me “what if” this thing for you for a second here, Congressman. If all of these bad things are going to happen, kind of whether this bill works or doesn’t, what’s the influence on lawmakers tomorrow to vote for the bill.

Campbell: Well because if we don’t vote for it, these credit markets could melt down and accelerate to the point where people go to the bank and can’t get their money out, you know, people can’t get their money out of a money market fund. Those are all impacts that could be extremely, extremely negative if we do nothing. If we do pass it and it does work, things still won’t be great but we won’t have that kind of calamity.

Ryssdal: I don’t want to get in hot water with your party leadership, here, Congressman, but you did say that they didn’t get it right on Monday. What did they have to do, the speaker and Congressman Boehner, to get enough votes tomorrow to get this thing to pass?

Campbell: I think people, first of all, have to be convinced of how dire the need is and how severe the problem is. And if it doesn’t pass, then all these bad things that others are predicting happen, how’s it going to be for you then? You know, when you go back home and then people say, hey, why didn’t you do anything to prevent this from happening? So, I think there’s a little bit of that, and I think there’s a little more confidence that needs to be built up for some people that the $700 billion, it will not be spent, it will be invested in buying assets. And there’s actually three different layers of security to make sure that the taxpayer gets all of it back and may, in fact, make a profit. And I think that’s the misconception that’s out there. The $700 billion will not be spent.

Ryssdal: Do you feel good about this vote, you personally?

Campbell: Nobody feels good about this bill, I mean nobody wants to do this. Again, Republican or Democrat. But I feel extremely confident, I’m not sure I’ve ever been as sure of many votes that I’ve made here as I do that the yes vote on this bill is the right vote. Not one I love to make but that it’s the right vote and the best thing under the circumstances, not just for my constituents, I mean, for the country and arguably the world.

Ryssdal: Representative John Campbell, Republican of California. Congressman, thanks a lot for your time.

Campbell: Thank you, Kai. Good to be with you.

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