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More from Dodd on the Banks

Thursday, June 4, 2009

One thing about being the head of the Banking Committee, you can make a lot of noise about things to which a lot of people can relate. Dodd is now warning the banks about gouging people with checking fees:

DODD PUTS BANKS ON NOTICE ABOUT EXCESSIVE AND DECEPTIVE CHECKING ACCOUNT FEES

WASHINGTON, D.C. – Senator Chris Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing and Urban Affairs, today put banks on notice after recent reports of consumers being gouged by increased, excessive and deceptive fees imposed on their bank accounts. Senator Dodd pledged to work to protect consumers and cautioned the banks against excessive fees and the use of other deceptive practices that unfairly inflate the cost of bank accounts.

“While we just scored a tremendous victory for consumers against unfair and abusive credit card practices, we’re now seeing that a few banks have applied some of the same unscrupulous practices to bank accounts,” said Dodd. “At a time when so many families are already struggling to make ends meet, automatic overdraft charges and other excessive fees are forcing consumers deeper into debt. Banks and consumers should know that these actions have not gone unnoticed, and that I will continue to work to protect consumers from these fee increases and other unfair practices.”

I have a story that I could share if I had the time.

By the way, for the sake of my Republican readers who apparently don’t know the party affiliation of those Senators who head Senate Committees, I must disclose that Dodd is a Democrat.

This is pretty much of a throwaway post, by the way. I feel guilty that I was unable to post yesterday, and, as I’m heading off to Drinking Liberally in a few minutes, not likely to post again tonight


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Reminder: Drinking Liberally Thursday Night

Tuesday, June 2, 2009

It’s that time of the month. If everyone who has promised to come, does come, we’ll have quite a crowd at our June Drinking Liberally get together. Remember, we never charge admission.

Time: 6:30 or whenever you want to arrive.

Place: Bulkeley House, Bank Street, New London.


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Max Baucus gets an earful-figuratively if not literally

Tuesday, June 2, 2009

This is interesting. Apparently the people of Montana, or at least those interested enough in health care to attend bogus meetings with Montana Senator Max Baucus, are not happy with the representation they’re getting on the issue from their senior senator. They turned out for “town hall meetings” in which Baucus appeared only on pre-taped video, leaving his hapless aides to take the heat from the voters. Apparently, they prefer the single payer option. You know, the sensible medical system that saves us all a ton of money by bypassing the insurance companies.

At one meeting, his aide, Jon Selib, argued that employer based plans are very popular, but you couldn’t prove that by the people in the room.

Baucus, as the head of the Finance Committee, has a lot to say about the shape of health care. Single payer is, in fact, out of the question. Too many palms, including Baucus’s, have been greased by the insurance companies for the sensible solution to be considered. Baucus has refused, until just recently, to even meet with single payer advocates.

What’s interesting, though, is that Selib said this, as he cowered before the crowd:

“If you think your insurance company is screwing you … then you’d have the option of going to the public plan,” Selib said. “Senator Baucus is fighting tooth and nail to include that in any final deal.”

In fact, Baucus has hitherto been fighting tooth and nail to exclude the public plan from the program, though he’s been under increasing pressure to change that position. He’s deathly afraid of doing unto Republicans what they did unto him-use the reconciliation process. Better to screw 300 million Americans than upset 40 insane Republicans. In truth, his aversion to the reconciliation process might just be a cover for his desire to serve the interests of the insurance companies.

What’s important is that Baucus seems to be coming around on the public option. In a rational world, this would be considered a half ass measure, but in the land of the free and the home of the brave, it’s the only way to arrive at the single payer system. Properly done, a public option will drive the private folks out of business. The “properly done” part is a huge caveat, but if it passes quickly, Obama will have almost seven years to get it established, and build up a base of support with which the Republican who succeeds him may not wish to tamper. If Baucus is going to stop the obstruction then it just might get done.


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JJB Dinner

Tuesday, June 2, 2009

My wife and I joined 4 other Southeastern Connecticut Liberal Drinkers at the JJB Dinner last night, where we ate really palatable food and listened to select politicians blather on. Actually, the featured speaker, Montana Governor Brian Schweitzer, gave a very entertaining keynote speech, capped off by an auction of his bolo tie for the benefit of the Connecticut Democrats. It fetched around $3,500.00, if memory serves, though I may have gotten distracted toward the end. I happened to be standing when the bidding started, and one of my tablemates was kind enough to urge me to sit, or I might own the thing right now.

A few pictures. Here’ are the Liberal Drinkers (minus me) with sometime Liberal Drinker Senator Andy Maynard and (she says) future Liberal Drinker (and union activist) Nancy Driscoll (on the right).

And here are the full contingent of “cts”, CTblue (me), CtBlogger, and CTBob. You can see why I prefer to remain behind the camera.


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A chance for Dodd to step up

Monday, June 1, 2009

We live in an era in which a sense of shame is for wusses. The banks and their trading partners created a world wide financial crisis, primarily through the use of unregulated financial instruments, such as credit default swaps. In the process they made a lot of money, much of which is up in smoke, replaced by taxpayer money. Anyone with any sense of shame or decency would be somewhat chastened. Not the bankers. According to the Times, they are in full lobbying mode (indirectly, of course, paid with our money) to defeat meaningful regulation of derivatives.

The method of choice is the old stand-bye: the build in loophole; the exception that swallows up the rule. According to the banks, some credit default swaps are so “customized” they can’t be priced on the open market. Therefore, rather than the obvious solution of banning such swaps altogether, they propose allowing things to remain just as they are for such swaps. As Senator Harkin points out, suddenly every CDS will be customized. The banks also want these instruments traded through an institution that is essentially a captive creature of the banks, all the better to escape meaningful oversight.

What’s galling, of course, is that the banks are trying to preserve financial instruments that yielded phony profits. Credit default swaps are like insurance contracts, except in the case of the CDS, the company took in the premiums, but when it came time to pay off, the taxpayers paid the bill. In the end there would have been no, or little profit, had the bailout never happened (look who got the money we funneled through AIG) and even with taxpayer help, as a bookkeeping matter, companies like AIG lost big time on these instruments. But the folks who packaged them- well, that’s a different story. They got fat paychecks and fat bonuses. So, strictly speaking, it’s not the banks (on behalf of their shareholders) that are doing the lobbying, it’s the bankers (on behalf of their paychecks).

This is where the rubber meets the road, and it’s an opportunity for Chris Dodd, who should be in the thick of this, to prove his bona fides. As is typical with Geithner, Obama’s terrible pick for treasury secretary, the Administration’s proposal is half hearted.

In truth, the recent credit card legislation, for which Dodd gets credit, was pretty feeble; it mainly requires that the credit card companies tell us in simple language exactly how they’re screwing us and stops some particularly egregious practices, but without rate limitations it doesn’t afford much real relief. The credit card issue was important, but this issue is bigger by several magnitudes, and if they don’t get the regulations right, we’ll soon be back where we are now, only in worse shape. If Dodd wants to show he’s for real, this would be an excellent place to start. Real, effective regulation of these financial instruments, along with outright banning some of them, is critically important. If Dodd can bring that about, then he’ll have accomplished something worth bragging about.


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Making Groton Look Good

Sunday, May 31, 2009

I’ve railed in the past against the Groton Town Council’s penchant for granting tax breaks to hotels. In the most recent case, they granted a tax abatement to a hotel developer who had forgotten to ask for an incentive before he built his hotel. Not to worry, the Council voted to give him his incentive after the building was complete. I’m generally opposed to these special tax breaks, but in the case of hotels they seem doubly objectionable. Hotels are built where they people are; a developer can’t threaten to take a hotel proposed for Mystic and build it in South Carolina. One would think that logic would apply in spades to a hotel planned for the Disneyland environs.

But no (via Atrios):

The Anaheim City Council voted Tuesday to extend a $76.3-million tax break to a developer to build two Disney-operated luxury hotels, despite strong opposition from a council member, community activists and union members who called the deal a corporate handout.

The council voted 3 to 1 to make up to 15 years of assistance payments to GardenWalk Hotel I, LLC, the developer planning to build two, 12-story hotels with 866 rooms for $242.4 million. The payments would begin once the hotels began operation.

So this is not just a tax break, in essence the City is becoming an investor:

Keyser Marston Associates, a real estate consultant hired by the city, concluded in a report that “the proposed hotel cannot be constructed or operated without economic assistance, and that the assistance is warranted because the costs are estimated to exceed the owners’ ability to finance the project.”

If one accepts free market principles, the owner’s inability to finance the project means either that the project is not feasible, or the owner is too big a risk. Even if neither is true, note that this is not just a tax break, the town will be making payments to this developer, meaning it is favoring one hotel over the others that clutter up Anaheim.

Sounds like the dreaded socialism, doesn’t it? But, that’s not the case, according to the head of the Orange County Visitor and Convention Center; this is just business as usual:

Charles Ahlers, president of the Orange County Visitor and Convention Bureau, told the council that the incentive was needed to bring more first-class hotel rooms, and supported the subsidy.

“A subsidy is the normal course of doing business,” he said.

Apparently, socialism is bad only when it helps normal people. Now, it’s true that Anaheim derives a lot of revenue from hotel taxes, but in this case it is not clear that the revenue will match the outgo. In any event, if the developer (which expects to have Disney operate the hotels) had to scale its plans back to something for which it could get financing, Anaheim would get tax revenue without a countervailing expense.

This reminds me somewhat of a developer who, during my tenure, came to the Groton Council seeking an abatement, telling us he wanted us to “share the risk”. He never offered to share the profits. Our sole incentive was that somewhere down the road he would pay taxes at the same rate as everyone else.

It looks like the Anaheim City council has basically agreed to “share the risk” but not the rewards. If things go well, they get only the taxes to which they would be entitled in any event; if things go poorly they have no recourse. In the normal world of finance, an investor shares both the risks and rewards, but in the topsy turvy world of corporate socialism, the taxpayer shoulders the risks, and the corporations reap all the rewards.


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Take the Oath

Saturday, May 30, 2009

Entirely optional of course, this being a secular humanist sort of thing.


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Friday Night Music-Radiohead

Friday, May 29, 2009

My son is staying with us for a few days, and I asked him to suggest a video, and he directed me to Radiohead’s video of “House of Cards”. It is unclear if this video breaks the no lip synching rule, since it’s somewhat sui generis. Here’s how it was made:

In Radiohead’s new video for “House of Cards”, no cameras or lights were used. Instead, 3D plotting technologies collected information about the shapes and relative distances of objects. The video was created entirely with visualizations of that data.

Here’s the video itself:

And here’s a brief video about the making of the video:


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Groton Hearts Dodd, by a slim margin

Friday, May 29, 2009

Yesterday the Groton Democratic Town Committee adopted a resolution I authored supporting Dodd. The vote was close, there being three Merrick Alpert fans on the committee (including Merrick), and a number of people who voted no because they felt it was too early to endorse anyone, though I carefully avoided the word “endorsed” in the resolution.

Given the potential for acrimony, the debate was relatively friendly, though I must admit that I have very little patience with politicians who try to use their military experience as a trump card. It appears that Merrick fought in Bosnia for the right to hold elections, and somehow a Groton Democratic Town Committee vote supporting Dodd undermined his war effort and endangers free elections in this country. Apparently, it is undemocratic for the Democrats to express their opinions.

Speaking of Dodd, he’ll be coming to Groton on July 25th for a fundraiser for our committee. Time and place to be announced; we’re still calling around to find a good place.

UPDATE: Amazing how these things get around.


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The memes keep on a coming

Thursday, May 28, 2009

Yet another right wing meme has sprung up about Sonia Sotomayor. Her alleged high reversal rate in the Supreme Court proves that she is far too radical to be on that court. Nate Silver demolishes math here.

But I suggest that it’s wrong to buy into the basic premise. First, from a purely partisan point of view, there’s not much reason for any Democrat to want a judge with whom the present Supreme Court agrees. One of the reasons it was so important to get a new president was because it was a necessary condition precedent to getting a new court. The Supreme Court is the only court in the country from which there is no appeal, so the fact is that the judges on that court can vote any way they please. Sotomayor, from what I’ve read in the last few days, is a judge who has adhered pretty strictly to precedent. As an lower rung judge it is her obligation to do so. That is not quite the case for a Supreme Court judge. We must all fervently pray that she disagrees with the current majority more than she agrees.

The fact that three of her five cases that the Supreme Court reviewed were reversed is therefore not troubling. What we should be more concerned about is the fact that two of her decisions were upheld.

Okay, the above is a bit facetious. I don’t know anything about the cases in question, nor do I know who constituted the majorities in any of those cases. It may be that she was reversed by the four “liberals” plus Kennedy, which might in fact be troubling. Of course, the folks attacking her on this score have not been interested in doing that analysis either. What I can say in all seriousness is that we should definitely not buy into the argument that a high reversal rate should be considered somehow disqualifying. Given the present extreme right-wing make-it-up-as-you-go-along Supreme Court (see, e.g., Bush v. Gore) a high reversal rate should be expected for any fair minded judge who adheres to settled precedent.

On a somewhat different note, why is it that the media (example here, but I’ve seen others I’m too tired to locate) gives valuable space to Wendy Long, of the Judicial Confirmation Network, a person who can say the following, apparently with a straight face:

Wendy E. Long, counsel to the Judicial Confirmation Network, said Sotomayor “has an extremely high rate of her decisions being reversed, indicating that she is far more of a liberal activist than even the current liberal activist Supreme Court.”

The “current liberal activist Supreme Court” – the Bush v Gore court- the corporations can do no wrong court, is without a doubt the most reactionary court we have had in about a hundred years. No serious person can doubt this. Yet these remarks are printed uncritically. It’s a bit like passing along a quote to the effect that the world is flat without pausing to remark that the statement is unquestionably false.


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