It's part two of our "Netroots Nation Goes To Vegas Piano Bar Extravaganza", and in keeping with tradition that means we are again taking a story request.
This time we won't be talking about energy security or "climate security"; instead, we'll discuss retirement security, keeping your money for yourself instead of paying it out in "mystery fees", and how one of the "usual suspects" is at it again.
The bill included tax break extensions for folks suffering from Hurricane Ike. In case y'all didn't know, LA-01 suffered from some pretty bad flooding during Ike. But the bill didn't include one parish from LA-01 as being eligible for those tax breaks.
Yet Mr. Scalise chose to get political attention for himself by railing against Wall Street, and voting Nay on the bailout. He even took the time to call into WWL on Thursday and talk with constituents about his opposition to the bailout.
Had he been doing his job as an advocate for LA-01, he would have fought to get LA-01 parishes included in the Hurricane Ike tax breaks. Some of y'all might say that he was opposed to the bill, so why would he include things in it? Folks, while on WWL on Thursday, he stated that he knew the bill would pass. If he knew it would pass, you would think he'd try to help out his own constituents, no? That is what we sent him there to do, right?
A tax break for rum produced in Puerto Rico and the U.S. Virgin Islands may trigger a hangover for proponents of Congress' huge bailout bill after the U.S. Senate tacked on tax reductions for the islands' liquor.
In its current form, the estimated cost of the U.S. Caribbean rum tax proposal, which provides payment to Puerto Rico and the U.S. Virgin Islands for rum imported into the mainland, is US$192 million over 10 years.
Normally, this tax break would be extended with little fanfare, but the Senate screwed the pooch on this one, y'all. Something tells me that we're going to be revisiting this mess under the next Administration come January.
Anyhow, here's the breakdown of the Louisiana delegation in the House vote:
Ayes:
LA-03: Charlie Melancon (D)
LA-04: Jim McCrery (R)
LA-05: Rodney Alexander (R)
LA-07: Charles Boustany (R)
Nays:
LA-01: Steve Scalise (R)
LA-02: Bill Jefferson (D)
LA-06: Don Cazayoux (D)
Steve's in the fight of his life in LA-01; and so is Bill over in LA-02; and Don is facing a tough re-election battle against Bill Cassidy. Still, Don sent out this statement about his vote: (emphasis added)
""Today, I cast my vote against Senate version of the Emergency Economic Stabilization Act. This was decidedly one of the toughest votes I have taken during my career in elected office, but I am confident that I cast the right vote. It is my firm belief that giving Wall Street $700 billion in taxpayer money is not the right way to solve the fundamental challenges facing our economy and financial markets. I was hopeful that the new compromise bill would have a smaller pricetag with less taxpayer liability, but it did not."
WOW. I'm sitting here shocked by the press release I just received from Senator Landrieu's office:
"Unfortunately, it appears that an influx of taxpayer money will ultimately need to be a part of any attempt to stabilize and restore faith in our financial sector. However, if the people of Louisiana have learned anything in the last several years, it is that simply throwing money at a disaster doesn't fix the problem unless paired with wise reforms to the practices that failed us.
"Significant improvements have certainly been made since the audacious first draft of the bailout plan. But in its current form, it falls too short of having the safeguards needed to ensure American taxpayers aren't left shouldering the burden of problems left uncorrected."
Thank you, Senator, for standing up for the hard-working taxpayers of Louisiana.
The Senate will be convening tonight to vote on the bailout plan that the House rejected. While financial bills must originate in the House, the Senate is twisting the rules by including tax breaks that the House already rejected in an attempt to induce more Republicans to vote for the bill.
By the way, I am now firmly OPPOSED to this $700 billion giveaway to the banks. I changed my mind on it when I read from respected economist Dean Baker the following:
For the record, the restrictions on executive pay and the commitment to give the taxpayers equity in banks in exchange for buying bad assets are jokes. These provisions are sops to provide cover. There are not written in ways to be binding. (And Congress knows how to write binding rules.)
Nice to know that Congress is telling us all one thing, and the Treasury is telling the Wall Street banks another. Can we actually get some REAL leadership on this?
And no, John McCain ain't providing it ... he's too busy playing politics with it all. Unfortunately, neither is Obama, as he's going to vote for the bailout in the Senate tonight, even if it's larded up with yet more tax cuts to put us even more in debt.
Bringing Accounting, Increased Liquidity, Oversight and Upholding Taxpayer Security
1. Require the Securities and Exchange Commission (SEC) to require an economic value standard to measure the capital of financial institutions.
This bill will require SEC to implement a rule to suspend the application of fair value accounting standards to financial institutions, which marks assets to the market value, no matter the conditions of the market. When no meaningful market exists, as is the current market for mortgage backed securities, this standard requires institutions to value assets at fire-sale prices. This creates a capital shortfall on paper. Using the economic value standard as bank examines have traditionally done will immediately correct the capital shortfalls experienced by many institutions.
2. Require the Securities and Exchange Commission to restricting naked short sells permanently
This bill will require SEC to implement a rule that blocks naked selling, selling a stock short without first borrowing the shares or ensuring the shares can be borrowed. Such practices many times harm the companies represented in the sales and hurt their efforts to raise capital. There is no economic value produced by naked short sales, but significant negative effects.
3. Require the Securities and Exchange Commission to restore the up-tick rule permanently.
This bill will require SEC to implement a rule that blocks short sales without an up-tick in the market. On September 19, 2008, the SEC approved a temporary pause of short selling in financial companies "to protect the integrity and quality of the securities market and strengthen investor confidence." This rule prevents market crashes brought on by irrational short term market behavior.
4. "Net Worth Certificate Program"
This bill will require FDIC to implement a net worth certificate program. The FDIC would determine banks with short-term capital needs and the ability to financially recover in the foreseeable future. For those entities that qualify, the FDIC should purchase net worth certificates in these institutions. In exchange, these institutions issue promissory notes to repay the FDIC, counting the amount "borrowed" as capital on their balance sheets. This exchange provides short term capital, with not cash outlay. Interest rates on the certificates and the FDIC notes should be identical so no subsidy is necessary.
Participating banks must be subject to strict oversight by the FDIC including oversight of top executive compensation and if necessary the removal of poor management. Financial records and business plans should be subject to scrutiny while participating in the program.
In 1982, Congress approved a program, known as the Net Worth Certificate Program, that allowed banks and thrifts to apply for immediate capital assistance. From 1982 to 1993, banks with total assets of $40 billion participated in the program. The majority of these banks, 75%, required no further assistance beyond the certificate program.
5. Increase the FDIC Insurance limit from $100,000 to $250,000.
The bill will require the FDIC raise its limit to provide depositors confidence that their money is safe and help eliminate runs on banks which are destabilizing to the industry.
Point #1 seems to be what makes this bill work, as going after the short sellers is a populist move, but I'm not sure what effect that will have on the market itself; and raising the FDIC limits from $100,000 to $250,000 is designed to calm down the masses worried about their money. In other words, prevent a run on the banks.
Creating an economic value standard for banks to use would partially help solve the problem of the banks having no liquidity, as it seems that a major part of the problem with the market right now is that the banks have no clue as to the value of their paper (i.e. mortgages) since the housing market was seriously inflated.
Point #4 seems to be the alternative to a $700 billion bailout. But I don't think it entirely solves the liquidity crisis, but rather, merely puts a band-aid on it, as the note to Point #4 states that only 75% of the banks who participated in the 1982-1983 program needed more help. Folks, that means 1 in 4 banks needed MORE help that that.
What do y'all think? I still think we will need to buy an equity stake in the troubled banks ... so we can recoup the taxpayers' money when the banks get on their feet. Then again, what do I know?
The Louisiana delegation broke down on whether they faced re-election - McCrery and Melancon voted for it, as McCrery is retiring, and nobody stepped forth to challenge Melancon. Alexander, Boustany, Cazayoux, Jefferson and Scalise, all of whom are facing re-election, voted against it.
Frankly, I don't blame individual Members of Congress for how they voted on this bill. It is clear that something needs to be done, but this bill was not the answer. Nor is the cynical posturing by House Republican Leader ... Rep. Boehnor (R-OH) voted for the bill, and them blamed the House Democrats for the bill's failure.
The majority of the blame goes to President Bush. He told the regulators to take the last eight years off, and look what happened. The Administration also tried to get away with one more boondoggle for their wealthy friends by demanding $700 billion with no oversight and nothing in return for the American taxpayer.
I also blame the House Republicans ... there 202 Republicans in the House, and a mere 65 of them voted for this bill. The politics of this demanded that a significant number of House Republicans back this bill, as the Democrats were not going to pass this bill on their own ... and allow the House Republicans to play politics with the vote over the next 5 weeks.
Further, the House GOP Leader, John Boehner (R-OH) tried to blame a speech by Speaker Nancy Pelosi for the GOP vote against it. Like Pelosi's spokesman said:
"You don't vote on a speech. You vote on a bill."
There's more after the jump ... including why I don't like the bill, as well as discussion of the way forward from here.
Well, folks ... I've just seen something I never thought I'd see in politics, mainly because I am not my grandparents' age. Back then, most Americans literally worshipped FDR, and they still do. Pray tell, what am I talking about? This:
Well, Mr. Kennedy may want to revise that statement in light of this article that John McCain had written for the September/October 2008 issue of Contingencies, the magazine for the American Academy of Actuaries:
"Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation."
I understand that the confidence in the market right now is shaken and stirred. But if the plan, as Krugman asserts in the 2nd link above is about restoring investors' confidence in the market, wouldn't investors be more confident if we put in some new restored the regulatory framework that kept the banks and titans on Wall Street honest prior to recent deregulation craze that was ushered in by "Saint Ronnie"; in addition to buying off the bad debt?
According to the Paper of Wall Street, lobbyists are already telling the Republican Party to just give them the money:
House Republican staffers met with roughly 15 lobbyists Friday afternoon, whose message to lawmakers was clear: Don't load the legislation up with provisions not directly related to the crisis, or regulatory measures the industry has long opposed.
"We're opposed to adding provisions that will affect [or] undermine the deal substantively," said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, whose members include the nation's largest banks, securities firms and insurers.
A deal killer for the group: a proposal that would grant bankruptcy judges new powers to lower the principal, interest rate or both on a mortgage as part of a bankruptcy proceeding.
So the banks, securities firms and insurers want the taxpayers to take on all the risk of the bad debt AND give them hundreds of billions of dollars, while getting NOTHING in return?
As my mama was fond of saying when I tried to sweet-talk her outta some extra cash as a teenager, "I wasn't born yesterday ... what's the money really for?"
I think Oyster may have nailed it with by highlighting the buried lede in a Politico post:
"The solution being proposed by the Bush administration is the most expensive bailout in the nation's history, sharply curtailing the ability of the next president to push for tax cuts or new spending."
I'm asking you to indulge me so I can tell you my experience of 9/11/01.
I was a recent college graduate, working on my second paid campaign, a race for a City Council seat in Manhattan. The district was the First Councilmanic District, which includes most of lower Manhattan - Battery Park, Tribeca, Wall Street, Lower East Side, Chinatown, Little Italy, SoHo, and small slivers of the East Village, Greenwich Village and the West Village.
9/11 was Primary Day.
That meant that the night before we had to make sure we had the following things done: money to pay the field workers hired to hand out the palm cards; that the palm cards were stacked in stacks of 50 and ready to be handed out to workers; and that everyone knew their responsibilities for the day.
I was dispatched around 6 PM on 9/10 to go get the money for the workers from the candidate, who was at her apartment. I was told to take a cab, so I would be back quicker. Unfortunately, after I got the money, I couldn't find a cab anywhere in Tribeca. So I'm walking down to the World Trade Center with thousands of dollars in my pocket so I can catch a train back to the campaign HQ, which was on the corner of Broadway and Houston Street. I remember walking through the mall that was on the first floor, marveling that it was so empty that night at such an early hour.
Once I got back to the campaign HQ, I made sure the palm cards were ready to go, a task that wasn't finished until nearly midnight. I went back to my brother's apartment to crash for a total of 4 hours before getting up to start the GOTV program.
I got up at 4:30 AM, and made it to the office at 5 AM. I was a Field Captain, responsible for making sure the poll workers were doing their jobs at a cluster of polling locations not too far from the campaign HQ.
Around 8:45 AM, I was walking past a polling location located in the basement of a St. Anthony's church on Sullivan St. I heard an explosion. Like everyone else, I looked up ... and saw a fireball in the North Tower of the World Trade Center. I immediately called the office, and one of our staffers, Blanca, answered. Blanca was one of my favorite people on that campaign ... she's a 4'11" dynamo. I told her that the election was likely going to be postponed ... She, not knowing what had just happened, laughed. My response was a bit harsh, but I said, "Blanca, go down the hall and go into the consultant's office, where you can see the WTC. You'll see a burning hole." I don't think she hung up ... I think she just dropped the phone and took off running.
Right after that phone call, a woman came up to me and asked to use my phone to call her husband. I just handed her the phone.
Then I got a call from the Field Director, my brother Rodd, telling me to make sure that my people were still working, that they were okay, and that they had water. So I walked a couple blocks north of Houston St over to the Children's Aid Society on Sullivan Street, where there was another polling station. While I was talking to the poll worker, I heard a woman scream in a way I hope I never hear again ... it was a blood-curdling scream of pure fright ... and I whipped my head around ... to see the second plane dip its wings into the South Tower.
At that point, I helped calm down the polling worker, helped him call his wife to let her know he was okay, and then went to the campaign HQ to find out what to do, as I couldn't make a call on my phone. Strangely enough, I could receive calls. And my mom called to make sure I, along with Rodd, was okay. I said I was ... and that Rodd was too, since we were almost a mile from the WTC.
For some reason, I had the urge to call my friend Danny. Danny, at that time, was working at our alma mater, Providence College, as an Admissions Recruiter. Of course, I didn't get him ... I got his voice mail. I left him the following message - "Danny, it's Ryan. Let everyone know I'm okay ... and do me a favor. Go to the Chapel and pray."
That was the last call I would be able to make on my cell phone in NYC for a couple of weeks. When I got back to the office, the campaign staff regrouped, and determined that we should make sure our poll workers were okay. We had something like 150 people on the street, including some that were mere blocks from the WTC. So all the field captains were told to go to their polling locations, and tell their people to head back to the Campaign HQ to get paid before heading home. It took me 2 and a half hours to do that.
As I was getting to my first polling location, I saw Asian tourists snapping photos of themselves with the burning Towers in the background. Moments later, I saw the first tower fall. I remember seeing one of the candidates running for the Council seat, Brad Hoylman, go running down the street to see what was happening once we heard and felt the rumbling of the first tower to fall. Folks were in absolute shock at that point.
The landmarks that we all used to orient ourselves in Lower Manhattan was missing a tower. Hundreds, if not thousands, had just died before our eyes.
Later, as I was trying to find my poll workers, and being VERY unsuccessful ... as it was like looking for a needle in a haystack. The streets of Manhattan were jammed with people milling about, crying, hugging, screaming. Folks were spreading rumors they were hearing on the news from person to person ... San Francisco had been attacked. Chicago had been attacked. The Pentagon had been attacked. I still trudged to all my polling locations, especially the one all the way down 6th Avenue, as it was the closest polling location I had closest to the WTC, probably 10 to 15 blocks away.
I don't recall seeing the second tower fall. All I remember is seeing it not there. When I got back to the campaign HQ, I saw one of our field workers ... covered in soot. He had been two blocks away from the first Tower when it fell. It took him almost 4 hours to get to the campaign HQ. The worst part of it all was he lived in the Bronx, some 220 blocks north from where the campaign HQ was. The island of Manhattan was in lockdown mode. The cabs were nowhere to be found. The subway wasn't running. The planes were not flying overhead. There was no one driving cars. The vehicles on the road were that of the police, the firefighters and the EMT's. The only way to get off the island was to walk off, or take the ferry across the Hudson River to New Jersey. Nothing was coming into the city.
The next day, my brother and I went to get breakfast at the diner down the street. We tried to find a paper so we could read it, but as soon as they were put out for sale, they were snatched up. Even the Italian newspapers that some newstands sold were gone! We met up with some friends and walked down to the Tower. The closest we could get was 5 blocks away. So we walked over to the West Side Highway, where we cheered all the fire trucks making their way down to find survivors.
I didn't get out of Manhattan until that night, when I went to my parent's house in New Rochelle by train. It was free. There was no one on it. And the normally bustling train station in New Rochelle, with hundreds of folks waiting to take the train into the city, was deserted. And the newspaper machines were full. No one had come to the train station that day. So I bought one, so I could read it. I still have it.
