The Bill Foster for Congress campaign issued the following statement Wednesday:
FOR IMMEDIATE RELEASE: September 22, 2010
Statement from Congressman Bill Foster
[Batavia, IL] –Today, September 22, Congressman Bill Foster held a press conference where he read the following statement:
I talk to people in my district constantly, and I hear over and over from people whose lives have been ruined by the bursting of the housing bubble and economic misery that followed from that. People and families are suffering because they are underwater on their mortgages, and some small banks have failed because they bought toxic assets, and even banks that have not failed from that are being forced to restrict credit to small businesses because of the toxic assets on their books. I often discuss the fact that $17.5 trillion in net worth was wiped out during an 18 month period ending in March 2009 - the largest destruction of wealth in human history - and that approximately 2/3 of that amount was due to the collapse of prices in the housing market. So I’m angry on behalf of those I represent, because of the lives that have been ruined, the retirements that have been ruined, and the businesses that have been ruined by the housing collapse.
Everyone who has looked at this understands that shaky financial products –so-called toxic assets – were at the root of the economic collapse. These were substandard and risky mortgages, like those requiring no income documentation or from people with bad credit histories, that were repackaged and sold off as “mortgage backed securities” by firms who were making big money by marketing these toxic assets to banks and to individuals who were not informed of the huge risks in buying these products.
Many of you may have seen the article in Crain’s Chicago Business yesterday, and I want you to know that it seems this story is only the tip of the iceberg. So let me tell you a little bit more about Randy Hultgren, and of his business experience that he so often touts.
Mr. Hultgren is the Vice President of Marketing at an investment firm that peddled various mortgage products. These bad products were sliced and diced mortgage products, sold them to firms without telling investors and banks how risky they were. Simply put, Randy was a salesman for toxic assets – the very products that inflated the housing bubble and triggered collapse of the housing market and our economy.
But even worse, after the collapse, Mr. Hultgren’s company then profited off of the crisis they helped to cause. His firm set up another investment fund in the Cayman Islands – capitalizing the fund with TARP and TALF bailout money. This was what was highlighted in the Crain’s story yesterday.
Put simply, firms like Mr. Hultgren’s are financial arsonists who then later show up at the fire sale to buy damaged merchandise on the cheap. They have very little shame about what they are doing. Firms like Mr. Hultgren’s knew what they were doing – they sold toxic assets that caused the financial collapse, and then they were able to make a quick profit by using bailout funds.
Now, I’m a businessman, and at my company, if we sold a bad light, we’d either give the customer their money back or we’d replace the light for a non-defective one. What I don’t see from my opponent is a similar offer – to buy back these toxic assets or to refund money to his investors.
For months, Randy Hultgren has been railing against the bailouts and all of the emergency interventions that were necessary to help our economy recover from the damage that firms like his caused. The hypocrisy of this is especially breathtaking since Randy Hultgren was the top salesman – the vice-president for marketing -- who sold the very products that undermined our economy. Voters and homeowners in the area will be very interested to learn about this, and other aspects, of Mr. Hultgren’s business dealings.
At the end of the day, this is not an argument between my opponent and me. This is an argument between Mr. Hultgren and the voters of the 14th District. Homeowners want to know what their lives would be like if their mortgages weren’t underwater. Carpenters want to know what their livelihoods would look like if the housing bubble hadn’t popped. The hundreds of now unemployed employees at Stanley National out in Sterling may wonder if their plant would still be open if there was still a demand for the home hardware that was produced at that factory. And all that would have been necessary to avoid this crisis was firms like Mr. Hultgren’s firm to have told the truth about the risks of the bad mortgage products they were marketing.
When my constituents become aware of these facts, they get it, and they tell me that they don’t think Mr. Hultgren deserves to hold any role in public service.