TN Senator Calls On President, Congress To Tell Americans: Our Banking System Is Insolvent
Lyndon LaRouche
January 22, 2009 (LPAC)--Sen. Bob Corker (R-TN), rose to speak on the floor of the Senate this afternoon during Hillary Clinton's confirmation hearings, but on the subject discussed in the morning on the stimulus package. His message was simple: Our banking system is insolvent, and until that is dealt with, no amount of money we put into the system will work. While Corker is a staunch "fiscal conservative" ideologically opposed in general to government action, today he argued the following, as monitored on C-SPAN television: We are putting capital into insolvent banks, he said. They are hoarding the TARP money, because they know their losses coming up are much larger than what they have. They are calling in letters of credit, because they need the money.
We are running out of powder to solve problems. Trillions of dollars of capital will be lost in the credit markets; a zombie banking system is being created.
Large banks, banks which we all respect, are insolvent, and need to be seized. Write-downs must be done. The longer we wait, the further we will be from dealing with the root issue.
That root issue is that much of our banking system is insolvent. Assets must be written down to their real value. We do that with derivatives. We need to do that with mortgages. Mr. President, you did not create this problem. But we must tell our people that their banking system is insolvent, he said.
He noted his agreement with Sen. John Kerry's statements in the morning Finance Committee hearings: Talk to bankers on Wall Street. They know they are insolvent. We have to face it like adults. Face up to the insolvency. Face up to these major losses. We have to do something about that first, before doing things that might be helpful after we do this.