Asking A Congressman About The Economic Crisis
Trib Publisher Michael Schenkler (l.) with U.S. Rep. Gary Ackerman Oct. 6 at the Trib offices.
By MICHAEL SCHENKLER
Iím always reluctant to take personal e-mails and ask to use them in my column. But somehow when it is about our nation and the e-mail exchange is with one of my dearest friends, my Congressman, and this newspaperís founder, the line between personnel exchange and public discourse gets blurred. Nevertheless, I always ask.
Gary Ackerman is a wonderful public servant and I couldnít think of anyone with a better heart or mind for that matter, to represent me (and many of you) in Washington. However, that being said, I donít always agree with him and often let him know when I donít.
Our exchange on the economic bailout began in person on Monday when I was asking questions searching for understanding and confidence in the steps our government was taking with the understanding that Gary is only one vote and one voice in a big sea of big leaders with a lot of inertia and knowing 535 viewpoints doesnít work well to solve problems.
But Gary is bright and thoughtful and I enjoy challenging him.
He enjoys challenging me back.
He left me on Monday with an uncomfortable feeling that he was not super confident in the government solution for which he voted and its effect would take some time to reach the marketplace.
Thus, after receiving a phone call from a friend, I began my column and sent a first rough draft to Congressman Gary by email asking for his thoughts.
The E-mailed Column draft
I received a call from Gary Levi ó a friend who was involved in Queens politics long before I was. Iíve only known him for about 10 years, but he was Mario Cuomoís Exec Assistant when Mario was lieutenant governor. He left government and politics a lifetime ago but still retains the passion and enjoys playing on the periphery.
I am not sure whether he called to vent or more likely, he wanted me to pass his thoughts along to my friend Gary Ackerman Ė Iíve brought the two together before.
ďThey havenít engaged the middle class in addressing the economic crisis,Ē was Leviís cry. ďItís only Washington and Wall Street involved and theyíre failing.Ē
And as I write this, at least for the moment, the market is shouting they are failing Ė and failing miserably. Granted the $700,000,000,000 (Seven hundred billion Ė do I have enough zeroes?) will take sometime to get into the economy. I wonder if the extra $130,000,000,000 (one hundred and thirty billion) added to bribe enough Congressmen to vote for the bailout is already being spent on special interest deals long before the mortgage money enters the system.
But thatís not the issue. So Congress voted to throw dollar numbers so large they canít be entered into our calculators (try 700 billion Ė you donít have enough digits) at the problem and the market reacted with dismay and disdain. The people are not buying their solution.
There is no confidence in the solution, in Wall Street or in Washington, D.C. Certainly, there is no confidence in the president and I guess not much more in Congress. Hank Paulson hasnít done the trick either Ė not close.
No I donít have the solution and neither did Gary Levi but he and I have ideas and suggestions.
During the most recent presidential debate, one audience member asked about citizen sacrifice Ė what was expected from each of us to solve the economic problem?
Gary Levi, a student of history proposes that they bring back the Liberty Bonds concept. Originally designed as a mechanism to help fund World War I, Liberty Bonds offered ordinary citizens a way to invest in the war effort while earning interest and having their funds backed by the full faith and credit of the United States.
I donít know what the government is paying to borrow money today, but I do know they are not reaching out to the middle class to participate. We currently face a crisis of confidence because we are not engaged Ė certainly the middle class is not and no one is trying to involve them.
Well Congress, engage us!
Go back to work. Why the hell is Congress in campaign-time recess while the markets are plunging, people losing faith and the global economy in turmoil. They threw $870 billion at the problem and went home to campaign.
It hasnít worked so far. So Congress, get your butts back to Washington and meet and think and hold hearings. Call Warren Buffet and Mike Bloomberg and whoever else you need to testify, advise and create. Ask them, not the president, to address the nation. Seek out the best minds in the nation and do something besides campaigning. Our futures depend on it.
Explain to the people in understandable terms what is happening and how it is being addressed. Sorry, at this point in time, we donít believe you and we donít believe you know.
Is all of this really caused by bad home mortgages? Címon.
I donít know if a Liberty Bond type program will help solve the problem.
I do know it could engage the masses. I do believe the billions it would raise could be used to make mortgages available to the middle class. I do believe that the masses would love to participate in the solution.
But right or wrong, it is an idea. And Iím sure there are many.
But while Congress is shut down for election season, we have only the Bush administration thinking for us.
Hey Congress, get back to work!
A quick email exchange
Gary Ackerman: Cynical, simplistic, naÔve, impractical, and factually wrong. But it would make a hell of a populist speech.
Mike Schenkler: Factually wrong? I like the rest of the descriptors.
Gary Ackerman: The add-ons (Pork? Sweetners?) were to get senatorsí votes, not House members. We canít do add-ons as we have a germane rule. But I liked a lot of them and you did too.
Mike Schenkler: So why not correct the facts and give the speech?
Gary Ackerman: If your intent is to bash Congress and not be responsible, the column will do the trick. If you want to be constructive and responsible you need to take a different approach. I personally have received suggestions from at least 30 Gary Leviís. Please understand, the publicís (and your) cynicism and lack of confidence in government is understandable; that is not the problem. There is really no liquidity in the market. Thatís a fact, and itís worldwide. Europe and Asia are not in the panic the political pundits are fanning. They are responding to economic facts, having nothing to do with the ďI donít like governmentĒ theme you strike (even though itís real and maybe deserved). That doesnít spook markets as it does political opinions. If Gary Levi thinks Americans will buy enough V-Bonds to make the system liquid enough, wow! Now tell me again who will pony up those trillions (three more zeros) to buy these T bills or V bonds? Only the Chinese seem to be willing American patriots. And the gratuitous get back to work, Congress? We did what is believed to be needed. Liquidity, hasnít had an effect as itís not in the system yet. Treasury can pump out maybe $50 billion a month, they say, after the mechanisms are in place. Iím not demeaning Gary Levi for thinking or trying. And Iím not saying Congress had a magic formula, but overwhelmingly, the best minds in the financial world (no, not those you would say caused the problem, but the thinkers and academics) convinced the majority of a very skeptical Congress, that what we worked out was the best approach. Suspend the campaign and go back to Washington didnít fix John McCainís problem, and unless we think of a better solution, Iíll still walk the streets asking for ideas, and respectfully ask for your vote.
Mike Schenkler: Congress working, monitoring, holding hearings, talking to the best minds, asking constituents and economists to participate and reaching out to the masses in the form of small affordable accessible bonds, would go a long way to restore confidence. I am not expecting you to be the savior of the economy, however, I am expecting all of you to be monitoring Bush and Paulson and company with our three-fourths of a trillion dollars while you examine other ideas. Even if you believe there is nothing you can do, Iíd like you thinking and talking about alternatives. The people really donít want another case of the administrationís guy and a batch of experts said we had to do it. We know where that got us. I personally think the Liberty Bond ó make small denomination bonds available and ask the people to help, youíll see both participation and morale building. Now, can I use your e-mail?
Gary Ackerman: FYI on part of what we did. (The email contained a half a dozen attachments including a summary of steps taken sent from the Speaker to the Democratic Members detailing the involvement and diligence of Congress).
Congress represents the American people, and although there are incidentally some experts on a variety of subjects therein, it is not, and is not supposed to be, the nationís experts on everything. The experts are supposed to be the Executive Branch appointees, answerable to and supervised by the president. The Congress checks and balances the enormous power of the Executive, and tries to hold them accountable by holding hearings. Congress is the peopleís watchdog in the process, and shares the blame for not seeing the unforeseeable, during the tenure of an Administration with a predilection to be faith based, and a misplaced belief that in a free market economy, the only evil is regulation. Shame on us all.
Mike Schenkler: So, can I use your e-mails if I do an economy column? Gínite
Gary Ackerman: Only if youíre nice.
Me, really? He couldnít have any doubts, could he?
There has been active communications concerning appropriate action to respond to or prevent the Council from usurping the power of the people in regard to term limits.
I have thrown the following proposal into the mix as a fair and viable option to the current term limit debate. It would require a special election Ė a cost of $10 million which I hope all the plotting billionaires would attempt to raise to cover the Cityís cost. I believe it could be done relatively quickly before the next election if the mayor appointed a Charter Revision Commission. Or it could be done by initiative Ė the collecting of the requisite number of valid signatures to put the questions on the ballot. With the dozens of candidates already actively seeking Council in í09 and the Working Families Party mobilized, the signature collection should be possible.
I am hoping for a coordinated effort and a pro-bono legal team to properly word the ballot questions. I assume once the initiative has been completed, the Council would approve a Special Election.
I suggest the following separate ballot proposals:
1) Any law passed by a referendum of the people may only be changed by the people.
2) For the election of 2009 only, the term limits for the office of the Mayor shall be three consecutive terms or 12 years.
3) For the election of 2009 only, Term Limits for Public Advocate, Comptroller and Borough President and City Council shall be three consecutive terms or 12 years
4) (If the Council has acted to modify the term limit law passed by the people then this question shall be included) Shall the term limit law which existed before the Council acted to change it in 2008, be reinstated with the modifications above, if approved, for the 2009 election only?
Obviously there is a lot to be done. I still believe that a majority of councilmembers may do the right thing and refuse to follow the mayor down a self serving undemocratic path.
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Wall Street Lays An(other) Egg
It would be irrelevant to write only about term limits when the stock market is in free fall or in recovery, depending on when you read this. We observe that irrational panic on Wall Street is no more sensible than the ďirrational exuberanceĒ that Alan Greenspan warned about in December 1996. But what did Greenspan do to prevent the sub-prime crisis that brewed while he was Chairman of the Federal Reserve? A minor result of the spiral of descent has been the diminution of Greenspanís reputation.
That leaves Warren Buffett, the Oracle of Omaha, the last iconic figure in the business world. He is a wise, generous and extremely modest man. He put shares of Berkshire Hathaway then worth over $30 billion into a foundation named for Bill and Melinda Gates. Wikipedia says that was the largest charitable donation in history.
Some of Buffettís managers were convicted of misconduct (perhaps unjustly, the case is on appeal) in the transactions which led to Eliot Spitzer throwing Hank Greenberg out of AIG. Unfortunately, in todayís world of show trials, a conviction doesnít necessarily mean that you did anything seriously wrong. Greenberg, accused of overstating AIGís profit, was succeeded by bunglers who led the insurance giant to its knees, requiring the largest U.S. bailout in history, so far amounting to $115.7 billion (Thatís $115,700,000,000). Would that have happened if Spitzer had allowed Greenberg to stay, rather than intimidating the board into removing him? Who knows, but the subprime problems might well have been avoided in part.
Is the AIG result, only visible years after the act, part of the price we pay for Spitzerism? Ask the holders of stock which is now nearly worthless. One difference between Spitzer and Senator Joe McCarthy is that Spitzer, acting through Darren Dopp, had the press cheering him on, while McCarthy was rightly opposed by most of the media. A whisper from the ďSheriff of Wall StreetĒ could devastate a companyís stock price, causing it to lose billions in market capitalization. Businesses paid fines of hundreds of millions of dollars to avoid that fate. While he was in power, Spitzer was unchallenged, because we all know that some corporations do shady things. But were the attorney generalís sanctions proportionate to the wrongdoing?
Unfortunately, we only found Spitzerís downside after he was elected governor, and started treating his colleagues as criminals, although some of them were. Senator Joseph Bruno misused the state plane, although staying within the letter of the law. Spitzer could have grounded him, as Pataki had done previously. Instead, Spitzer set off a Clouseau-type investigation of Bruno and then lied about it.
One thing leads to another, and the circle of wrongdoing and misconduct grows ever larger. It is safe to assume that for every crooked lawmaker exposed, there is another who has escaped detection. There is not even much honor among thieves, as we see from former Assemblyman Brian McLaughlinís wearing a wire to record self-incrimatory remarks by Assemblyman Tony Seminerio, one of the nicer people in Albany, who, envious of the money that lobbyists and consultants were earning, set himself up as one of them. You can watch others get rich; you can envy them; but you cannot take their money, even if it is given willingly. That is bribery and a felony.
Term Limits, In Brief
What the City Council is programmed to do, extending voter-approved term limits without a referendum, may not be criminal, but it is ďdisgusting.Ē Who said that? Why, Michael Bloomberg did. That was before he tied his own future to theirs. Why the world financial crisis dictates that 36 local councilmembers due to rotate out should occupy their seats for another four years is a difficult question to answer. It would be nice to have Mayor Bloomberg continue in office, and we believe he should have the opportunity to run. This result can and should be accomplished by public referendum, which many of us would support as it applies to citywide officials, who are known to the public and whose districts have not been gerrymandered.
We donít need the councilmembers, who attached themselves like leeches to the mayor as the price they charge for City Council approval for this end-run around the Charter. The attempted maneuver is possibly technically legal (the Court of Appeals will decide) but morally indefensible, especially after one has pretended for seven years that such an action would be an outrage.
It is a pity that Bloomberg, Lauder and the publishers fail to see what fair-minded people so clearly understand. It is not an issue of two terms or three; that is debatable. It is cheating, by changing the rules in the middle of the game, at a window of lack of opportunity for the other side to take its case to the voters. The oligarchs are decent people, but their collusion in this matter is an insult to the democracy under which they became rich and powerful. We hope they reconsider.
Not4Publication.com by Dom Nunziato