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WPCNR NEWS COMMENT. By John F. Bailey. September 25, 2008: In Congress’s 7 Day Drill, reminiscent of an Eli Manning Super Bowl Drive,  the “Hurry-Up-and-Save-Our-Fortunes-Stop-the-Bleeding-Save the Economy-Stop-the-Madness”  hearings on the Wall Street bailout Wednesday, after some 10 or more hours of hearings in two days, of all the Senators and Congresspersons wringing hands, taunting  the money white knights, Ben Bernanke, the Federal Reserve Chairman  and Henry Paulson, the Treasury “Czar,”  one congressman showed he is by far the smartest man in Congress.

Congressman Gregory Meeks, Democrat from the 6^th District in Good Old  Jamaica, Queens, was the last questioner and the man who asked the last question in the Financial Services Committee Hearing Wednesday. Mr. Meeks had the business smarts to ask Ben and Hank what assurance  there is that the $700 Billion would actually be used by the financial institutions to give out loans instead of using the money to reward stockholders, keeping the bailout money on their balance sheets to attract investment and raise their stock price.

 

Mr. Bernanke dodged “The  $750 Billion Question,”  saying,  and,  Mr. Money said, (I’m paraphrasing) well that’s what these institutions do make loans  extend credit  – but  he did not guarantee in any way,  the money received for toxic assets would be  spent with asset holders with the explicit imperative it would be earmarked for credit liquidity. Mr. Bernanke did not say it would or give any assurances. He and Hank expect, hope  the robber barons will get religion and start making loans with it.

This was the most important question and most intelligent question asked in two days and Mr. Meeks is to be commended for asking it. He has brains. He’s from Queens not from the Upper East Side. And, I don’t think he owns a house on the New York Riviera in the Hamps, or the Dominican Republic yet.

Considering that Barney Frank who runs the House Committee announced early in the Wednesday afternoon hearing the house had already worked up a 42-page bill to send the Senate, it became increasingly clear this is a dog and pony show with the bailout a certainty with no certitudes.

Mr. Meeks question landed at the end of the hearing like a large elephant feces in the middle of Mamaroneck Avenue in the  Columbus Day Parade.  It stunk up the house chamber with its aroma of truth, as Frank gaveled the hearing to a close.

Mr. Meeks’ intelligence grenade highlighted that this money is being given without restrictions, without purpose, other than to restore “confidence.”

People on Wall Street say we need to restore confidence in the markets. Who can have confidence in this stock market that makes money on failure, insider trades, and misrepresents value?

Poppycock.

It is being given to save our fortunes – maybe. We are to believe that all these firms – and how about a list of all the firms that are going to get this money? Hundeds? No one has asked that.

Magically, it is supposed to unjam the credit system with Ben and Hank’s faithful promise that they think this is the best way to do it.

It’s good for the companies getting the money, I assure you. That’s where these guys are coming from.

Congress getting hung up on restricting the salaries of these people at companies getting the money is not productive.

Could we please follow the money through the system, as Mr. Meeks so intelligently, bluntly pointed out?

Could we please say in the bill – money received for assets will be used for new loans only or at least a goodly percentage of it?

Frankly, I have no confidence these companies will be altruistic. Once they get their manicured fingertips on the money, they will consider it their money.  Hire more interns.

No Wall Street firm is altruistic. Haven’t we learned that through scam after scam: The Keating Savings and Loan Debacle, (John McCain must remember that one) (going way back) Teapot Dome, the Transcontinental  Railroad scam,  the Dot Com Runup, the Oil Price runup, the subprime scam. They’re con men and women.  

Congress is giving this money away for them to build up confidence? Why should we have confidence in them? We have confidenced ourselves into a depression believing in them.

Of course, Hank says you cannot put restrictions on the money or limit how it is used because that would restrict the market and the ability to evaluate the assets. But, supposedly these places need the money.

I say Congressman Meeks is one smart man. How did he ever get  nominated to run?  Must have slipped through the  6^Th District Nomination Committee undected.  He better watch it asking intelligent questions. The Queens County Democratic Committee may have to recall him.

Thank you Mr. Meeks for asking the $750 Billion Dollar Question: how will we be sure the money will result in more credit being opened up? And Ben and Hank would not answer it or assure it.

The Setup

With the Senate Leader Nancy Pelosi, Chuck Schumer of the Senate Joint Economic Committee and the House leader Mr. Benoit saying they’ve agreed in Principle on the bailout means this was in the works all along. After all, all those well-heeled contributors to congresspersons, the contributors who stand to lose a lot of money in their personal fortunes have to be saved.

It is a setup for another government agency that does not work: Department of Homeland Security, FEMA, TSA. 

Not to mention the reams of hearings  next year on regulating Wall Street to come,  with a “saved” and prosperous economy bringing America back to Number 1, and our fortunes saved

Then —

One more huge patronage bureaucracy coming up. Bring on the interns. Hire press offices. Hire more hacks. Bring on the clowns. Bring on your favorite Wall Street lobbyists and give them jobs.

Remember it’s all for the American family, to save our fortunes.

We are truly grateful, congress for your oversight, piercing questions, and canny financial acumen in vetting this $750 Billion measure in a week.

I want more Gregory Meeks-es in Congress. Or at least one Gregory Meeks on the White Plains Common Council and School Board.

Thank you Mr. Meeks, keep asking that question.

We who are about to pay, salute you.

Could we please get in free to your next fundraisers, Senators and Congresspersons in the Hamptons? Or Lincoln Center.

 

 

 

WPCNR SCHOOL DAYS. By John F. Bailey.September 24, 2008: Kerry Broderick, President of the White Plains Teachers Association, currently without a contract with the school district and negotiating, said the teachers and the district are not at an impasse. She told WPCNR the teachers have scheduled talks October 6 with the Superintendent of Schools. Broderick told WPCNR the negotiations were centered on salary only and that the district has agreed to negotiate a two year contract with salary details not decided.

The sticking point, she said were the increases in premiums paid the district health care provider the teachers have had to pay out of their salaries the last year and increases in the co-pays. She said the teachers are seeking to make up those costs.

The agreement on a two-year contract insulates any new Superintendent of Schools hired by the district from negotiating with the union in his or her first year of their contract.

Fred Seiler, Assistant Superintendent for Business for the district confirmed that premiums with the Statewide Schools Cooperative Health Plan, the consortium the district has contracted with for health benefits have gone up 17% since July 2007. He said, Co-Pays have doubled from $10 to $20 for doctors visits.

Teacher Share of Health Premium, 7%.

Seiler said the total premium for an individual with “SWSCHP” as it is known, this year is $7,293, of which a teacher pays $625  annually (8.6%) . For a two-person family, the premium is $15,388, the teacher share they pay is $1,075 annually (7%). The premium for a family Two Person, is $16,336, of which a teacher on the family plan pays $1,220 (7% of the cost).

Seiler told WPCNR, “That changed in July, 2007, a year and a half ago. What that meant on an individual basis  It went $15 to $20 a visit for a individual visit. The deductible stayed the same. It’s the CoPay for either your primary physician or your medical prescriptions, but also at the same time, was introduced a plan with MEDCO there, where people could buy 90 days supply of their regular medication at a much lower than what they were paying before. For some employees they actually were saving money.”

Seiler said he was a member of the SWSCP Board (with the state). He said he had heard nothing criticizing the increases that took place in mid-2007.

 Seiler recalled that when the SWSCHP increases took place, “Everyone understood it was an increase in the premium and an adjustment in the CoPay(s), you need a little bit of both to make it (the health plan) reasonable.”

A year and a half ago it went up 9% plus a change in the CoPay. This year, there were no change in benefits, coPays, or anything, then the overall increase was 8- 8-1/2% (in the premium). It was the first time in 12 years it was less than double digits.  Not as low as we’d like it to be, but that’s true of every health plan.”