For a while it looked like I might be able to climb down from my high horse on matters related to federal bailouts of the automobile and financial services industries. But no. I’m back in that saddle.
On April 22, The Washington Post reported: “Top recipients of federal bailout money spent more than $10 million on political lobbying in the first three months of this year.”
Lobbying? LOBBYING?
“…aggressive efforts aimed at blocking executive pay limits and tougher financial regulations, according to newly filed disclosure records.”
If you or I give money to an organization that’s even minimally involved in lobbying, can we deduct it as a contribution on our tax returns? No sir. But these guys can take stacks of the money you and I have paid in taxes, for which they pleaded and begged and sobbed and whined because they were on the verge of bankruptcy or collapse, and they can use it to try and influence (read “block”) legislation they don’t like. More specifically, they are lobbying to limit Congress’ ability to correct the abusive practices that pushed these businesses right up to – and maybe over – the brink of ruin. “Major bailout recipients have spent more than $22 million on lobbying in the six months since the government began doling out rescue funds, Senate disclosure records show.” That includes General Motors (spending $1 million a month) and Citigroup and JP Morgan Chase (proud new owner of WaMu) leading the pack among financial institutions.
Be still, my heart. Come down, my blood pressure.
Sure, $22 million is a pittance to our friends in Congress and in corporate boardrooms. But for the overwhelming majority of us on Planet Earth, it is a lot of money.
What else do we need to do to convince our elected officials to cut off the flow of any additional taxpayer money to prop up these monumental monuments to avarice, arrogance, corruption, and incompetence?
Thought I’d jot a little note to members of Congress (and I actually sent it) on the eve of yet another round of debate on health care reform. This is one of those things I needed to write in order to get it off my chest so I don’t get all fired up with my family and friends.
It is a national disgrace to have more than 45 million Americans with no health insurance, especially when Members of Congress enjoy premium coverage paid for by taxpayers.
The insurance industry will continue to push for delays in reforming health care even though premiums rose over four times as fast as wages between 2000 and 2006, and industry profits of the nation’s largest insurers rose 170.2 percent to $12.6 billion between 2003 and 2007. Facts like these turn my stomach – and they should turn yours as well.
While insurance conglomerates (another $30 billion for AIG??), auto manufacturers, and banks whine and grovel for bigger bailouts, millions of us have been pushed out of jobs and out of our homes, and robbed of financial security.
It’s time for Congress to 1) tell the insurance lobby to sit down and shut up, and 2) get on with the business of crafting policies that put the needs of ordinary Americans before the interests of corporate boardrooms. There’s plenty of anger and frustration simmering out here in the public. Hopefully we’ll see some serious attention given to this and other matters before it boils over into a 21st century Boston Tea Party.
Hats off to Ingrid Ougland Sellie for this note on her Facebook page:
Dear World,
The United States of America, your quality supplier of ideals of liberty and democracy, would like to apologize for its 2001-2008 service outage.
The technical fault that led to this eight-year service interruption has been located. Replacement components were ordered Tuesday, November 4th, 2008, and installation is underway. In early testing, the new equipment functioned beautifully, and it became fully operational on January 20, 2009.
We apologize for any inconvenience caused by the outage and we look forward to resuming full service and hopefully even improving it in years to come.
“President-elect Obama.” Man, that sounds good. It already inspires confidence and rekindles (dare I say it?) hope that a new day is around the corner. I’m not expecting President-elect Obama and his team to come up with easy solutions to the disasters created by the Bush administration and soon to be dumped onto President-elect Obama’s administration. The era of simplistic answers to complex problems is over.
But I’m already sensing the presence of something long absent from the national scene: leadership. President-elect Obama’s first press conference was a welcome glimpse of things to come. For one thing, it will be good to have a president who can string together complete sentences all by himself. When he spoke on Friday, I thought President-elect Obama set a friendly, respectful, and business-like tone that was upbeat without denying facts, even when there was more bad news about the economy. That’s change I can believe in.
Here’s something else that will be welcome and different: competence. I’m reassured to know that President-elect Obama seeks the advice of a diverse collection of highly-capable, experienced, and smart people. Check out the lineup on his transition economic advisory board:
David Bonior, a Michigan Congressman from 1977 to 2003;
Warren Buffett, chairman and CEO of Berkshire Hathaway;
Roel Campos, former SEC commissioner (appointed by President Bush);
William Daley, chairman of the Midwest for JP Morgan Chase, and Commerce Department secretary from 1997 to July 2000;
William Donaldson, former SEC chairman from 2003 to June 2005;
Roger Ferguson, president and CEO of TIAA-CREF, and former vice chairman of the Board of Governors of the Federal Reserve;
Jennifer Granholm, Michigan governor;
Anne Mulcahy, chairman and CEO of Xerox;
Richard Parsons, chairman of the board at Time Warner Inc;
Penny Pritzker, CEO of Classic Residence by Hyatt;
Robert Reich, University of California professor and Labor secretary from 1993 to 1997;
Robert Rubin, chairman and director of the Executive Committee of Citigroup, Treasury secretary from 1995 to 1999;
Eric Schmidt, chairman and CEO of Google, Inc;
Larry Summers, former president of Harvard University, managing director of DE Shaw, and Treasury secretary from 1999 to 2000;
Laura Tyson, professor at Haas School of Business, University of California, served as chairman of the National Economic Council in 1995 and 1996, chairman of the President’s Council of Economic Advisors from 1993 to 1995;
Antonio Villaraigosa, mayor of Los Angeles;
Paul Volcker, chairman of the US Federal Reserve from August 1979 to August 1987.
Good to know that President-elect Obama has already sought out and is listening to people who represent more than just the banking industry. (Dick Cheney still refuses to disclose the names of the energy executives who advised his notoriously secretive energy task force.) Let’s hope that President-elect Obama pulls together the very best people he can find, and not just cronies who want to promote themselves and line their own pockets. We’ve had enough of that in recent years to last lifetimes.
As a taxpayer and [somewhat] responsible citizen, I look forward to having a president more interested in ideas and history and best practices than in ideology. I welcome the prospect of a president asking us to do more for the nation than merely ‘go shopping.’ I am eager to follow the lead of a president who can inspire us to think and to dream and to sacrifice, and who can be honest and humble enough to tell us when we’re missing the mark. And I long for a president who can help millions of us to be proud once again that we are Americans.
While Wall Street financiers stoked today’s financial meltdown with explosive investing in high-risk mortgage loans, politicians, federal officials and lobbyists shielded them from lawsuits that would have protected borrowers and tempered the frenzy.
Banks and financial institutions have demonstrated that they are unwilling and perhaps incapable of regulating themselves. For years these guys were exceedingly eager to lend large amounts of money at exorbitant rates to people who shouldn’t have qualified for loans:
Like those low teaser rates? Don’t worry about upward adjustments – you can always refinance.
Can’t verify employment, or income, or assets? Don’t worry – we don’t need to know.
Interested in an interest-only loan almost sure to get you financially upside-down? We’ll set you up.
Willing to assume that the value of your home goes up every year? We are too!
In the midst of mounting piles of financial wreckage for which they are largely responsible, banks are now refusing to loan money to each other, bringing global credit markets to a standstill. They didn’t mind raking in fortunes for themselves by providing millions of people with risky loans that jeopardized our entire financial system. But now they won’t trust others of their own ilk enough to lend them money. And Wall Street panics. As a result, trillions of dollars – how much is that, anyway? – of wealth have evaporated. That represents jobs, home ownership, retirement plans, and college educations that have simply disappeared.
Meanwhile, as the financial crisis deepens and spreads around the globe, the US Treasury is considering acquiring at least partial ownership of banks. And this from the Bush administration – who knew? Many regard nationalizing such institutions as socialism. But would they prefer more of the same practices that led to the current mess? Call me a radical, but this additional step of government intervention actually sounds like a good one. Bankers don’t like the idea of government ownership or interference in their institutions… So what? I couldn’t care less what bankers like or don’t like. They’ve had their say and their way, and they screwed us.
For those of us who are not bank executives, gross negligence like theirs would land us in the unemployment line for sure, and probably in jail. A few things pop into my mind:
Crank up investigations of bankers and Wall Street financiers, politicians, federal officials, and lobbyists, and bring appropriate action against them.
Put the houses, cars, bank accounts, investments, insurance policies, jewelry – everything owned by highly-paid executives of failed firms – into escrow accounts. For those who are found not guilty, items could be reclaimed if and when measures to restore value and stability are successful; otherwise they belong to the US Treasury.
Use a chunk of the bailout money to build prisons for (1) above who are found guilty.
So much for this tirade. I hope that American consumers are seriously rethinking personal patterns of borrowing and spending, and considering how we have helped to create the current economic climate. As for me and my household, we’ll continue to drive our 1990 and 1991 Toyotas (as little as possible). Projects around the house are on hold. More people we know are losing their jobs. Like so many others, we’re looking at other ways to simplify and stretch the resources we have, but that’ll be the subject of another post…
The Keating Five were Alan Cranston, Dennis DeConcini, John Glenn, Donald Riegle, and John McCain. They were accused by the Senate Ethics Committee of acting to protect the interests of Charles Keating, chairman of the Lincoln Savings and Loan Association. Lincoln was under investigation for fraud, and collapsed in 1989 at a cost to American taxpayers of nearly $3.5 billion. Senators Glenn and McCain were cleared of “acting improperly” but criticized for their “poor judgment.”
While the McCain campaign tries to whip up suspicion about Barack Obama’s very thin association with William Ayers, a troublemaker in the 1960s, let’s not forget Senator McCain’s much more recent involvement with what was at the time the biggest case of financial fraud in US history. This is very disturbing, especially in light of the current financial crisis which is partly a result of zealous deregulation that Senator McCain has long supported:
“We have sort of become a nation of whiners. You just hear this constant whining, complaining about a loss of competitiveness, America in decline. You’ve heard of mental depression; this is a mental recession.”
“Thank God the economy is not as bad as you read in the newspaper every day.”
July 2008, Phil Gramm, vice chairman of the Swiss bank UBS, senior economic adviser to John McCain, former Texas senator, and holder of a doctorate in Economics
I got a ‘D’ in Intro to Econ in college. After the last class of the semester I couldn’t wait to get my workbook into a urinal and invite others in the dorm to join me in symbolically ending my career as a student of Economics. But even I understand that borrowing to pay back borrowed money, repeated 20 or 30 times and always adding “a little something” for yourself, is a recipe for guaranteed disaster.
So what’s with these bankers and Wall Street fat cats? Did they fail their Econ courses? If that was the problem, we could just send them back to school. No – behind all the fancy terminology and slick deals is a more fundamental issue: greed. Eeewww. That’s a word we usually hear in church, not in the marketplace. But its practitioners in the financial world have exercised greed so blatant and outrageous that the word is now back in common use.
So much for the idea that business does best with no government interference (ie, regulations). Looks like Adam Smith’s ‘invisible hand’ has actually been using a chainsaw to cut off its own legs. Once-venerable banks and financial institutions are crumbling under mountains of bad debt. The sickening part of this mess is that it was knowingly created by financial wizards who figured they could get their piece of the action and get out before it all collapsed. The heck with the rest of us.
One of the bitter ironies here is the extent to which the financial services industry tried to keep the government out of its business. According to a BankNet360.com analysis of data, the finance, insurance & real estate sector (which includes commercial banks, credit unions, and mortgage banks) increased overall spending on lobbying by 4.7% in 2007 to nearly $390 million. In fact, the finance, insurance & real estate sector spent close to $3 billion on lobbying from 1998 to 2007, more than any other industry in the nation. In the last ten years, Fannie Mae and Freddie Mac alone spent nearly $200 million on lobbying and campaign contributions.
Now these guys are lined up with hats in hand asking the government to bail them out. Not only that, they have the gall to try and shape the legislation being considered by Congress. If a kid comes home (hopefully unhurt) after wrecking the family car as a result of carelessness, what parent would be interested in hearing the kid’s ideas about revising traffic safety rules? Would the kid be out driving another family car very soon? Probably not at our house. I can’t think of a reason we’d trust bankers or Wall Street execs to help craft solutions to the current financial crisis. Foxes in henhouses. Henry Paulson used to be CEO at Goldman Sachs ($37 million compensation package in 2005; net worth estimated at more than $700 million). Not sure he qualifies as a ‘disinterested party’ to steward up to $1 trillion of taxpayers’ money.
So I’m in agreement with Christopher Dodd, Chair of the Senate Banking Committee:
Do not allow the Treasury Department to purchase any assets “unless the Secretary receives contingent shares in the financial institution from which such assets are to be purchased equal in value to the purchase price of the assets to be purchased.”
Limit executive pay “to exclude incentives for executives to take risks that the Secretary deems to be inappropriate or excessive.” The provision would also permit limitations on senior executives as it is “determined to be appropriate in the public interest in light of the assistance being given to the entity.”
Create a special inspector general program and a separate emergency oversight board including top officials from the Federal Reserve, Federal Deposit Insurance Corp., and Securities and Exchange Commission.
President Bush, who has been practically invisible in the midst of yet another disaster occurring on his watch, now wants Congress to bail out the banks his way, and fast. Please excuse us, Mr. President, if we don’t rush to embrace another of your administration’s “solutions.” And we’re going to need more than the two-and-a-half-page request for $700 billion that Henry Paulson initially brought to Congress. People across the country and around the world are still reeling from the effects of other horrendous decisions President Bush has made, so let’s take the time needed to get this one right.
What if the bankers and high-rolling financiers aren’t happy with the terms of a bailout? First, as Phil Gramm might tell them, “Quit whining!” They’re not really in much of a position to bargain. And if they don’t like the taxpayer’s extraordinarily generous offer, that’s fine. They’re welcome to go find themselves a better one.
When I think about choosing a bank, I look for stability, good and friendly customer service, and a reasonable return on my money. I’m not looking for “Whoo hoo!” which is the current marketing slogan for Washington Mutual – or WaMu, as they prefer to be known.
As gigantic banks swallow up small and not-so-small banks, what happens to the little guys – the customers? I’m currently a customer of Washington Mutual, which used to call itself “the friend of the family.” Those days are gone. Like so many others, WaMu joined the scramble to offer customers subprime mortgages and high-interest consumer debt. Eager to rake in fees and profits on risky loan portfolios, banks fell all over themselves to push bigger loan obligations and more credit cards to their customers. That’s no friend of the family.
I originally decided to bank with WaMu because it was a local business. Now my “local” bank has branches – and much more – all over the country. I’m going to move our millions elsewhere as soon as I can, and here are just three among many contributing factors:
The WaMu Theater is located in New York City, inside Madison Square Garden. It seats anywhere from 2,000 to 5,600 and regularly hosts stage shows, graduation ceremonies, and business meetings. It has only been known as the WaMu Theater since early 2007…
WaMu decided to celebrate its entry into the New York market in a big way. For “Spotlight on Teachers” the bank bought out every ticket to every show on Broadway for a single matinee performance on November 16, 2002 (28,000 tickets in total). 14,000 K-12 teachers were chosen from metro New York City and New Jersey school districts to attend the Broadway show of their choice, with a guest, compliments of Washington Mutual. “The program culminated in a fabulous pre-show event staged in the heart of the theater district with a rousing send off of the teachers to each and every Broadway theater.” That’s great New York-style marketing. But when Washington Mutual spends the big bucks to entertain thousands of teachers in New York, I’m ready for a change.
Check out this gorgeous “leadership center” owned by WaMu, just a five-minute car ride from Seattle’s airport. It appears that WaMu’s movers and shakers thought nothing was too big or too good or too soon for them. Wonder what people learned about leadership or ethics or sound business practices or financial responsibility at that center…
“Whoo hoo!” may be more than just another zippy ad campaign. Perhaps it captures the attitude of decision makers gleefully snapping up billions of dollars worth of bad investments and expecting to sell them for big profits. Now it looks like the party’s over, and someone has to pay the piper and clean up the messes made by WaMu’s “leadership” as they drove the bank over the cliff.
At first glace, Cindy McCain doesn’t seem to be doing much to advance the cause of blonde women. In her Aug 31 interview with George Stephanopoulos on ABC, she was asked about Sarah Palin’s foreign policy experience:
“You know, the experience that she comes from is, what she has done in government — and remember that Alaska is the closest part of our continent to Russia.”
But maybe she’s onto something. If we follow the logic of what she suggests, then millions of us may have the foreign policy experience it takes to be Vice President of the United States – and President, if necessary. Wow – and we didn’t even know it. Residents of Washington, Idaho, Montana, North Dakota, Minnesota, Michigan, New York, New Hampshire, Vermont, and Maine have foreign policy experience because we live close to Canada. And folks in California, Arizona, New Mexico, and Texas have foreign policy experience with Mexico. People from Alaska are the most qualified, of course, because they live close to two countries – Russia and Canada! They’ve got double the foreign policy experience of the rest of us.
The more I think about this, the better it gets. We can finally recognize the educational experience of Americans who live near schools, the work experience of those living close to employers, and even the religious experience of people with a church in their neighborhood.
Thank you, John (and Cindy) McCain, and Sarah Palin. This really is a change in how we understand and operate in the world. In fact, it’s a completely new and different way of thinking that is unencumbered by facts, history, study, humility, truthfulness, reality, or any of those other outmoded and inconvenient frameworks we’ve been using. Just imagine what could happen if these two were to become President and Vice President of the United States!
The ridiculous brouhaha over lipstick on a pig has me wondering about the trigger-happy campers in the McCain-Palin tent. Apparently these folks are desperate to keep the public’s attention off of John McCain’s “maverick” record of voting with President Bush 90% of the time. Not much wiggle room there, my friends.
How “lipstick on a pig” could be interpreted as a sexist remark is a mystery to me. Given that the idea behind this common expression is the inherent absurdity of dressing up a pig, would it be more reasonable to describe one as wearing a tie or a tuxedo? When I look at a pig, the snout protruding right above the mouth is what I notice first; in fact it’s sort of emblematic of pigs. Decorating that snout is the easiest thing to imagine in any attempt to make a pig look nicer. Hey – maybe that’s how it came to be a common expression!
Did you see a flash in the sky over Tennessee during this artificial storm? That was Fred Thompson’s love of drama flaring up. The former senator and actor rushed to Palin’s defense saying, “This woman is undergoing the most vicious assault that anybody has ever seen in public life.” Get that man some perspective, stat! I’m prescribing a few hours at the Holocaust Memorial Museum in Washington, DC, for Fred’s initial treatment. Hopefully it will clear his mind and calm the impulse to blurt out such preposterous nonsense.
And what are we to make of Jane Swift (former acting governor of Massachusetts) demanding an apology from Obama for calling Sarah Palin a pig? When did he do that? Apparently she found his remark offensive, so she jumped in front of the cameras on national television to express her outrage. Check out this bit of gobbledygook from Ms. Swift:
“You know, his first comment was about lipstick, and his second comment was about a rotting, old fish, and so, you know, he certainly for someone with a strong grasp of the English language — it would be remarkable that he chose so badly anecdotes that people like me could take offense at and could misconstrue.”
Ms. Swift[boat], did you take offense at and misconstrue John McCain using the same expression to criticize Hillary Clinton’s health care plan? Last October he put it this way: “I think they put some lipstick on the pig, but it’s still a pig.” He did it again in May: “I don’t like to use this term, but the latest proposal I see is putting lipstick on a pig.” Do you think that Senator McCain was calling Senator Clinton a pig? How about when Victoria Clarke, McCain’s former press secretary, wrote a book in 2006 titled Lipstick on a Pig: Winning In the No-Spin Era by Someone Who Knows the Game.Did that offend your sensibilities? No? Surely you’re not suggesting that you object solely because the “offender” in this case is a Democrat!?! That would be so petty, so unfair, so hypocritical.
Get a life, Jane. A sense of humor might come in handy, too. In the meantime, I’m going to risk offending you with some advice based on a common expression that has definite sexist overtones: While you’re ladling out sauce for the goose, be sure to save plenty for the gander. He deserves at least as much.
