Chuck Schumer

Dear Senators Dodd and Schumer and Congressman Frank,

First things first, let me congratulate you for reaching a level of hypocritical grandstanding I thought impossible even for the United States' Congress.

Congressman Frank, you blocked oversight at Fannie and Freddie while you were dating a high ranking Fannie official.

Senator Dodd, you took a bribe from Angelo Mozillo to filibuster George W. Bush's attempts to reign in criminal excesses at Fannie and Freddie.

Senator Schumer, the 100% tax rate you propose on Wall Street bonuses violates the ex post facto clause in the United States Constitution.  Not that you care when you're up for re-election this cycle....

Furthermore, all three of you were crucial players in the decision to bailout Wall Street.  While you may personally disagree with some of the decisions those firms have made, the fact remains you had an oppotunity to let said firms fail six months ago.  Instead of letting Wall Street fail; you failed.

Once you decided to bail these firms out, you implicitly accepted responsibility for any unpopular business decisions said firms made.

Against that backdrop, I find your grandstanding over the compensation paid by the American International Group (AIG) utterly nauseating.  Said compensation, while perhaps unwise from a narrowly defined business perspective, is standard practice in the financial services industry.  Gentlemen, if you didn't want AIG engaging in standard business practices; THEN YOU SHOULDN'T HAVE BAILED THEM OUT IN THE FIRST PLACE!!!

Don't get me wrong: AIG screwed up and THEY SHOULD FAIL as a result (the fact that their screw up is a direct result of Elliot Spitzer's bullying is a topic for another day).  That said, Gentlemen, you are standing in the way of AIG's creative destruction.  Until you are willing to let AIG fail, your whines about executive compensation ring hollow.

Sincerely,

Adam Cahn

Austin, TX

Obama Adminstration Negotiates Nuclear Bailout Deal with Iran

by. Irving Peter Freely

WASHINGTON -- Declaring the World's Largest Sponsor of Terrorism "too big to fail," U.S. President Barack Obama today announced the Iranian Nuclear Reinvestment Act of 2009.  The controversal deal, opposed by Republicans, will commit the U.S. Government to funding the Iranian nuclear program through the end of 2010.  The Iranian Nuclear program had become a causalty of the global credit crisis and lower oil prices.

"In this time of global economic crisis," President Obama announced today, "when we stand on the edge of catastrophe, Vice President Biden, Secretary Geithner and Iranian president [Mahmoud] Ahmedinejad have negotiated a deal that should allow us to create or save over 400 jobs in the Iranian Nuclear Sector.  Given the unprecedented nature of the pressures Iran faces, not acting is simply not an option."

The deal is expected to meet resistance on Capitol Hill.

"Is the President serious?"  Asked Rep. Eric Cantor (R-VA), a member of House Republican Leadership.

"The American People do not want us to send billions of dollars to prop up the nuclear program of a country that regularly declares it's intention to destroy the United States of America," said Rep. Mike Pence (R-IN).

Not all members of Congress feel this way.

"I find it appaling that Herbert Hoover Repubilcans would follow Rush Limbaugh's marching orders to obstruct this crucial economic and national security measure in order to justify their own failed policies," said House Speaker Nancy Pelosi (D-CA).

"Who do these Republicans think they are?" asked Sen. Chuck Schumer (D-NY), "When the administration negotiates a bailout deal in secret with our enemies, they expect a certain amount of support from the United States Congress.  These Herbert Hoover Republicans seem to think that the Iranian nuclear program will survive if we do nothing.  These Republicans don't understand that real people work in the Iranian nuclear program."

While Republicans are anticpated to largely oppose the deal, Democrats expect the measure to pass largely along party lines, although moderate Sen. Arlen Specter (R-PA) is expected to support the administration.

"I just think that, given the size of the current crisis, we have to do something even if this approach isn't my first choice", Specter said this week on the Sean Hannity Radio show.  "I gave my word to the Senate Leadership and I intend to keep it."

If the discussion of the range of responses to the banking crisis on This Week today is any indication, we are truly living in a topsy-turvy world.

Stephanopolous leads with a clip of President Obama addressing a question about the nationalization approach taken by Sweden to resolve a mortgage bubble driven financial crisis in 1991-1992.

Barack Obama:

Sweden has a different set of cultures in terms of how the government relates to markets. And America's different. We want to retain a strong sense of private capital fulfilling the core investment needs of this country.

Lindsey Graham:

I think if you put most of our major banks under a 'stress test,' they're going to fail...

This idea of nationalizing bank is not comfortable but I think we have got so many toxic assets spread throughout the banking and financial community throughout the world that we're going to have to do something that no one ever envisioned a year ago, no one likes.   

To me banking and housing are the root cause of this problem. Government is going to have to...I would not take off [the table] the idea of nationalizing the banks.

Chuck Schumer:

I would not be for nationalizing. I think government's not good at making these decisions as to who gets loans, how this happens...

GOP Rep. Peter King joined Sen. Graham in speaking in favor of nationalizing some banks. Only Rep. Maxine Waters remained true to form. She, of course, has no fear of a government-based solution.

Needless to say, Schumer's remarks are disingenuous in the extreme. First, no one is talking about the government running the banks long-term and making "decisions as to who get loans", etc. Nationalization is merely a mechanism for an orderly disentanglement of failed banks, not dissimilar except in scale from what the FDIC does regularly. Second, Sen Schumer as usual neglects to mention that he is wholly a creature of the New York financial services industry. Schumer's opposition to nationalization is completely self-serving since step one of nationalization would be to wipeout the shareholders (his campaign contributors) and fire the executives (his friends) of any bank found to be insolvent.

On a purely partisan basis bankrupting Schumer's financial base would be good for the GOP since Schumer's ability to bring Wall Street money to the Democratic Party is a major if under publicized reason for his party's resurgence.

As a matter of policy, I agree with Sen. Graham that some of our major banks are indeed insolvent; their liabilities exceed their assets. It is only by clinging to the fiction that the face value of their toxic assets have any bearing on reality that these institutions can present a balance sheet that is not dripping red ink. As long as they insist on carrying on with that charade they will not have real assets to lend and that will mean the American economy will lack a robust financial intermediation function.

So here we are in a topsy-turvy world where within days of passing the gargantuan stimulus bill Democrats are lining up to preserve the zombie banks and Republicans are calling however modestly at this point for their nationalization. What a world!

Japanese electronics maker Panasonic used to use the slogan

"Just slightly ahead of our time"

Readers of this blog have been treated to similar ahead-of-the-curve intelligence regarding various economic issues. And now, might I remind you what I wrote when Hillary Clinton announced she was stepping down from the Senate to serve as Secretary of State 

New York's next Senator? by Ironman | November 23, 2008 at 1:21 PM

• Just one year ago it would be hard to have imagined the obscure Lt. Gov of New York, David Paterson, having the power to make or break a national level political career.

But with Eliot Spitzer and now most likely Hillary Clinton out of statewide office, Governor Paterson now gets to decide who will be the next great NY state politician.

The Albany Times-Union has a story about the choices facing Governor Paterson. He has taken his own name out of contention, but there are plenty of ambitious Democrats eager for a move up in the world. http://timesunion.com/AspStories/story.asp?storyID=742556

A few crass political calculations come to mind here. Appointing Attorney General Andrew Cuomo removes a possible primary opponent to Paterson. Having failed in 2002 to win the gubernatorial nod, Cuomo may try again; but as of yet Paterson's ratings are pretty good and he obviously would have a huge bloc vote supprting him in a primary race. 

The other element here is the 2010 NY Democrat ticket violates the time honored "balanced ticket" approach.  David Paterson and Chuck Schumer are both from NYC; which casts less than 30% of the statewide vote.  Therefore there will be great interest in considering an upstate/suburban candidate; especially as Daniel Moynihan and Hillary Clinton were perceived as non-NYC candidates and the state legislature is now controlled by NYC Democrats.

The other demographic concerns are that the huge white Catholic bloc in NY (which frequently votes Republican) may not have a prominent statewide Democrat candidate in '10; nor is there a woman incumbent seeking re-election statewide for the Dems in '10. Hispanic  political figures are also arguing it is time for a statewide Hispanic officeholder, but a candidate like Nydia Velasquez might struggle upstate trying to hold the seat.

Given those considerations, don't be shocked if suburban Albany Congresswoman Kirsten Gillibrand http://en.wikipedia.org/wiki/Kirsten_Gillibrand    gets picked by Paterson. She fits all the necessary balancing factors as an upstate catholic woman, who has a centrist record for a Northeastern house Democrat (She is a Blue Dog). She also has been a fundraising machine in her races.   

Gillibrand would need to resign her Republican oriented house seat.  http://en.wikipedia.org/wiki/New_York%27s_20th_congressional_district_election,_2008  http://en.wikipedia.org/wiki/New_York%27s_20th_congressional_district, but we might do well to get a stronger candidate  for the special election than millionaire Sandy Treadwell, a rather low intensity figure.

One thing we should now be painfully aware of is the Democrats have stopped doing things for self-gratification that don't make political sense.  I think David Paterson will help himself with his senate appointment; even if it is perceived as yet another step away from vocal leftism.  

So, I saw Kirsten Gillibrand on the radar weeks ago. And now she's been seen again

Confirmed: Kirsten Gillibrand Chosen to Fill Clinton's Senate Seat

January 22, 2009

 

PIX11 News ExclusivePosted 6:02pm | Updated 7:35pm

 

PIX NEWS is being told that Congresswoman Kirsten Gillibrand is the reported choice of Governor David Paterson to fill the U.S. Senate seat vacated by Hillary Clinton.  Two Congressional sources say members of the New York delegation have been invited to join Governor Paterson for the announcement in Albany at noon tomorrow. 

Of course, there's the usual NY State political intrigue. Gillibrand's awareness the Consitution contains a 2nd Amendment offends some downstate liberals, and LI gun grabber Rep. Carolyn McCarthy is making noise about a possible primary.

I expect Chuck Schumer will put the kibosh on this; especially as McCarthy hasn;t shown any recent fundraising prowess ( Think SE PA libs whining about Bob Casey, circa 2006)  

But, grab the popcorn!

Wayne Barrett (a man no one can accuse of being a GOP Hatchet Man) has a disturbing piece in this Week's Village Voice on the disgusting relationship between Mayor Michael Bloomberg, Governor David Paterson, Princess Caroline, the NYC Dept. of Education, and the Democrat Party.

I was trying to find one money quote from this article and it's just chock full of them.  Lowlights include:

- Michael Bloomberg as Monopolist; this one is funny because it's 1000% true:

Bloomberg made his fortune as the founder of a monopoly supplier of computerized corporate data. It should come as no surprise that he believes in monopoly politics as well—with him, of course, as the CEO, a post usually reserved for governors in New York's hierarchy. Should Paterson choose Kennedy, he is said to be considering signing up with Knickerbocker SKD, the political consultants already tied to Bloomberg, Kennedy, Chuck Schumer, and [NYC City Council Speaker] Christine Quinn, all of whom are up for re-election this year or next.

- The fact that Paterson caved to Michael Bloomberg's third term power grab to avoid facing Michael Bloomberg in the 2010 Governor's race:

The mayor announced his decision to introduce a City Council bill overturning term limits—scuttling the votes of 1.2 million New Yorkers in two plebiscites—on October 2, the morning after a largely unnoticed dinner at a Bronx restaurant attended by the mayor; his girlfriend, Diana Taylor; Paterson; and the governor's wife, Michelle....[I]f Paterson rejected Bloomberg's third-term ambitions, he ran the risk of facing Bloomberg himself in 2010, an implied threat that hung like a dark cloud over the governor during the term limits debate. No wonder Paterson told reporters that he would "love to have the mayor around" for four more years, though he was officially neutral on the Council bill.

- Michael Bloomberg's naked political opportunism:

The success of the mayor's coup has led, predictably, to an attempt at a second one—the installation of a Bloomberg-friendly U.S. Senator. Although Bloomberg had just spent the recent election season trying—in vain—to hold on to a GOP state senate majority, he and his advisers saw no reason why he couldn't insert himself almost immediately into the selection of the state's next Democratic senator....Bloomberg's ballyhooed switch to Independent in 2007 for a contemplated presidential run could prove a precursor to a 2009 reversion to the Democrat he was before he entered politics. His term limits play and the Kennedy campaign, if successful, will solidify his position for the 2009 election so much that it could force the two major Democratic contenders, Thompson and Congressman Anthony Weiner, out of the race.

- The fact that appointing Princess Caroline is Paterson's act of absolute submission to Michael Bloomberg:

Paterson's acquiescence on term limits convinced the Bloomberg camp to use Kennedy to seal their growing alliance with the governor as well....[T]hen, when Paterson delivered his State of the State address last week, there was Bloomberg sitting next to Paterson's wife and father, with the governor going on and on about obesity, trans fats, and junk foods—all Bloomberg hobbyhorses.

- Michael Bloomberg's Whore of a Top Political Consultant:

his consigliere, Deputy Mayor Kevin Sheekey—who shamelessly intends to draw his $196,574 public salary in [post Wall Street Collapse] 2009 even as he continues to act as the mayor's chief political adviser....The architect of Bloomberg's two-year presidential operation, Sheekey went on to take to task "the entire New York political establishment" for supporting Clinton and opposing Obama....Sheekey's attack on New York Democrats who supported Hillary Clinton (similarly, every Illinois Democrat backed Obama) is the sort of slapstick that would boomerang on any political operative measured by the wisdom of his words, rather than the depth of his candidate's wallet. But Sheekey, like Bloomberg, still gets master-of-the-universe stroking in the media.

- The degree to which Princess Caroline has prostituted herself to the Bloomberg Education Myth:

Because Kennedy's 22-month stint between 2002 and 2004 as [NYC Schools Chancellor Joel] Klein's chief executive of the newly created Office of Strategic Partnerships is the only job she's ever held—a (very) part-time, $1-a-year position—the chancellor is literally the only employer she can turn to for a recommendation letter....Both Klein and Kennedy also tried to hype her role at the Fund for Public Schools, a nonprofit set up to receive private donations to the system that is chaired by Klein. Kennedy has stretched her less-than-two-year DOE "job" into six years in her recent media interviews, without mentioning that she's counting the four years since she left the department only because she's continued to serve as one of two vice chairs of the Fund. The other vice chair, Daily News owner Mort Zuckerman, made a $1.5 million grant to the Fund, but Lara Holliday, the Fund's director, told the Voice that Kennedy, personally worth at least $100 million, "has not contributed financially" at all to the city schools.

In the words of my favorite good government organization in New York:

New York has an appointed State Comptroller, and an appointed Governor, both candidates for election.  Do we need an appointed United States Senator seeking re-election, so that three unelected state-wide officials will be competing as incumbents?

Now what, prey tell, are my own thoughts on this topic?

1) Absolute Disgust - As I have mentioned before, all this politcal backscratching adds dramatically to cost of living.  Seeing these politicians pull this stuff really makes my blood boil.

2) The Residual Power of the Drive By's - The only reason any of this is possible is because Michael Bloomberg, Joel Klein, and Princess Caroline are social friends with the drive by's.  While I am also social friends with the drive by's, the difference is that they don't listen to me.

3) Michael Bloomberg as Monopolist - I'd never seen it expressed this way.  It's completely true.  Michael Bloomberg's entire career has been built on obtaining monopoly power and intimidating potential competitors.

4) Princess Caroline as A Golden Opportunity - This slime might provide us with a Joesph Cao Moment.  After all, it's not like we have a known corruption fighter running for Governor or anything.

5) The Dems Aren't Ready to Govern - Governing is harder than being in the minority.  The Dems are about to learn this.

Thoughts/Suggestions?

Now this is goining to have the sound of "man bites dog" on this blog, but Congress ought to set to in the lame duck session this week and insist that the Energy Department immediately spend $1.2 billion.

It's the best bargain for public money I've seen in a long while.

The Strategic Petroleum Reserve is short 26 million barrels from its 727 million barrel capacity.

http://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve

It had been filling at the rate of 70,000 barrels/day when noted energy experts like Senator Chuck Schumer insisted this be stopped so as to keep the feds from adding to oil demand, thus boosting oil prices. This was when the price of crude was going to infinity and beyond.

At the time, eminently reasonable But of course, they then passed legislation forbidding the Bush administration from buying any more oil.

In order to take advantage of the oil bubble's collapse (prices are down around $40/bbl) the legislation needs to be repealed. NOW.

The window to take advantage of this historical crash in oil prices may be short. OPEC meets on December 17 and almost cretaintly will shut in lots of production to try and drive the price back up.

Acting now in the lame duck session to repeal the SPR purchase ban is good for taxpayers, good for consumers and  improves our energy independence. And as soon as the ban is lifted the Energy Department ought ot buy up as much oil as it can immediately.

If they don't act; I do not want the likes of Reid, Pelosi and Schumer bleating next year about energy independence--topping off SPR is a quick cost -effective way to improve the situation now, not some green pipe dream decades away from market.

While we are at it; maybe DOE ought to lock in oil futures for December 2009 delivery.  We might like to emulate Southwest Airlines and set a fixed price for future fuel needs for the Pentagon and the Low Income Energy Assistance Program.  I'd love to see us get heating oil to the northeastern non-profits cheaper than the tinhorn dictator Hugo Chavez and his lefty Kennedy friends.     

It's an idea that makes perfect sense. So, don;t expect anyone in Congress to do this. 

Is this the first volley in the October Surprise? 

David Asman of Fox News has put together a scathing, devastating documentary which completely exposes the Democrats' responsibility for destroying our economy including FDR, Lyndon Johnson, Jimmy Carter, Bill Clinton, Chuck Schumer, Barney Frank, Chris Dodd, and yes - Barack Obama, our favorite community organizer who was single-handedly responsible for ACORN forcing banks to lend to unqualified buyers which has now mushroomed into today's economic disaster. 

It's called Saving Our Economy: What'$ Next?   It airs in about 15 minutes, and will air again tonight. Check the link for local time. 

UPDATE:  These videos were taken down from YouTube.  If you didn't have an opportunity to watch this program in its entirety, you'll be able to to see it this coming Saturday, October 11, at 9 pm EST.

Saving Our Economy: What'$ Next?  Part 2, Part 3, Part 4, Part 5, Part 6