Retire Garrett

Happy Memorial Day Weekend

Michael S — Fri, 25 May 2012 21:55:17 +0000

Thank you to those who have been vocal and active in supporting this site. Rest up and enjoy Memorial Day Weekend. I know many of you will be campaigning over the long weekend and I wish you well. When we return to our “9 to 5″ jobs on Tuesday we’ll be exactly one week away from the primary. Make sure you let your friends and family know how important it is for them to participate on June 5th.

Take care and be safe!

We Need to Hold them Both to their Word

Michael S — Thu, 24 May 2012 14:49:41 +0000

Last night was the third and likely final debate between Congressmen Bill Pascrell and Steve Rothman. The debate was hosted by Bergen Grassroots and the Ethical Culture Society of Teaneck.

As I mentioned yesterday, there was reason for residents of the 5th Congressional District to pay attention to what was said by both candidates last evening. News was made, and we may improved our odds at defeating Scott Garrett.

Before either candidate got too comfortable, the moderator of the debate, Professor Alain Sanders posed the following question to the candidates:

Win or lose on June 5th will you commit to not only supporting your opponent but also assisting our neighbors in the 5th District in their efforts to defeat Scott Garrett? If your answer is “yes” please provide specific things you will commit to doing.

I’ve been following their race as closely as anyone without a “dog in the fight” and I’ve never heard that question put to either candidate let alone have it raised as an issue during a debate.

I’m pleased to report that both candidates said the right things. Steve Rothman and Bill Pascrell both committed to doing everything within their power to assist us in getting rid of Scott Garrett. They committed to raising money, hosting fundraisers and making appearances no matter which of them won or lost their own race on June 5th.

Candidates and residents of the 5th District need to hold both of these men to their words. I’m in no way saying I don’t believe they will not live up to their promise; I believe they will. However, this matter is far too important to leave anything to chance. News 12 covered the entire debate and I’ve made arrangements with them to get a copy of the event sent directly to me. When I get it, I’ll post the relevant portion of the debate at Retire Garrett.

As a side note, both candidates did themselves and New Jersey proud last night. Whoever prevails on June 5th, I have no doubt they will continue to represent their constituents with the same passion and commitment they’ve both demonstrated throughout their tenure in Congress.

A Relevant Divergance

Michael S — Wed, 23 May 2012 15:43:41 +0000

Tonight Congressmen Steve Rothman and Bill Pascrell are participating in what will likely be their last debate before the June 5th primary. The primary will determine which of these two sitting Members of Congress will be the Democratic nominee for the 9th Congressional District. The debate will take place at 7:30 PM in Teaneck at the Ethical Culture Society and is hosted by Bergen Grassroots and the Ethical Culture Society.

You can still watch the debate even if you are not able to be in attendance. News12 will be covering the event live and in its entirety. If you are not a Cablevision subscriber AND Cablevision is not available in your area, you can watch the debate online at www.news12.com.

For those of us in the 5th District, I can tell you with certainty that there is reason for you to watch this debate. I can’t give you the particulars, but I can say it will be more relevant than one Congressman chastising the other for not choosing to challenge Scott Garrett in the 5th District.

If you miss the debate, fear not. I will be in attendance and will report back to you tomorrow.

Can He Sleep on His Own, or Does He Need to be Told How to do That as Well?

Michael S — Tue, 22 May 2012 18:36:37 +0000

Back on April 5th, we posted an article calling out Scott Garrett for his attempts to roll back Dodd-Frank. Garrett introduced legislation which would prevent the CFTC and the SEC from regulating derivative trades by overseas subsidiaries of American companies. In other words, the same bad actors who helped cause the worst economic recession since the Great Depression could simply conduct their derivative trading through overseas subsidiaries and go back to doing business as usual as they did before Dodd-Frank.

It good to see the media is starting to pay attention to what Mr. Garrett is trying to do:

WASHINGTON (MarketWatch) – The nation’s top commodities regulator on Monday said he was concerned about legislation under consideration in the House that would exempt derivatives transactions made by offshore branches of a U.S. bank from regulation required by the Dodd-Frank Act. “It would substantially reduce transparency and increase risk to our financial system and the economy,” said CFTC chief Gary Gensler in comments prepared for the Financial Industry Regulatory Authority annual conference. Gensler made the comments in connection with concerns about J.P. Morgan Chase & Co.’s JPM -2.50% surprise trading loss of more than $2 billion, which emerged from the company’s London office. The bill, introduced by Rep. Scott Garrett, Republican of New Jersey, would exclude from the crisis-reform statute derivatives transactions between a London branch of a U.S. bank and offshore entities.

I sometimes wonder if Mr. Garrett would fall lifeless to the ground if anyone waved a sharp instrument over his head and cut the strings Wall Street uses to control his every move.

Two Weeks to Go

Michael S — Mon, 21 May 2012 17:13:08 +0000

Two weeks from tomorrow, voters in New Jersey will be heading to the polls to vote in our primary. It’s too late for anyone to register to vote on June 5th, but there are still a lot of people eligible to turn out and make their voices heard.

I’m sure I’ll be repeating this message again at least once more but we need to turn out the vote for Democratic candidates. While there is no doubt as to the renomination of President Obama, there are several importance races to be decided.

There are three candidates running for the chance to face Scott Garrett in the fall. In addition there are two contested primaries races for Bergen County Freeholder (I’ve made no secret about my support for Tracy Zur and Steve Tanelli), and Tom Palmieri needs at least 100 Warren County residents to write his name in so he can be on the ballot in November (I’m a big fan of Tom as well).

We need you to talk with friends and neighbors throughout the district to remind them about the upcoming election. Don’t accept “I’m not going to be around on election day” or “I don’t know anything about the candidates to make an informed vote.” First, it’s not too late for voters to request and obtain a form to vote by mail. Second, if you’ve been following this site with any regularity you know the issues on the Congressional level.

We need to practice turning out the vote now, so we’ll have a better understanding of what works best come November. Let’s get busy. Defeating Scott Garrett doesn’t just take place in November. It has to happen every day by everyone out there who understands how destructive this man’s policies and voting record is to our community.

Short and Sweet

Michael S — Mon, 21 May 2012 01:06:11 +0000

Tomorrow, Scott Garrett is holding a mini town hall meeting with local constituents at the Montague Bagel Factory at 432 Route 206 from 1:15 PM until 2:00 PM. He’s doing it because this week has been designated by Congress as “Small Business Week.”

Mr. Garrett will be fielding questions from the people in attendance. Regrettably I will not be able to attend. However, I’m hoping somewhere there will pose the following two questions to our Member of Congress.

First, please ask him why Republicans classify a small business according to the number of shareholders in the company as opposed to the revenue generated by the business. This means that according to the Republicans, Koch Industries – one of the largest privately held corporations in the world, and The Wrigley Company – past or present owners of such organizations and products as the Chicago Cubs, The Chicago Sun Times, Life Savers, Orbit Gum, Doublemint Gum and Skittles, are just as much a small business as the family owned bagel shop he’ll be dining in tomorrow.

Second, please ask him how the real small businesses are going to be able to afford health care coverage if he and his Republican colleagues are successful in repealing The Affordable Care Act. After all, over the past decade, average annual family premiums for workers at small firms increased by 123 percent, from $5,700 in 1999 to $12,700 in 2009, while the percentage of small firms offering coverage fell from 65 to 59 percent. The Affordable Care Act provides over $40 billion in tax credits for the real small businesses in this country to help cover owners and their employees.

I’ll be curious to see how he responds.

You Can’t have it Both Ways

Michael S — Fri, 18 May 2012 18:58:15 +0000

Either Scott Garrett is in favor protecting taxpayers in the event a “Too Big to Fail” institution fails, or he isn’t.

The Dodd-Frank legislation was enacted by Democrats. It was not as robust as many Democrats would have preferred, but it was a good start. It passed in the House by a vote of 232 – 202 without the support of a single Republican lawmaker.

During House debate, Garrett voted on several amendments to weaken the legislation. Since the final vote, he’s advocated for legislation to weaken Dodd-Frank and for its outright repeal as well.

The Dodd-Frank Act puts a comprehensive new regulatory regime in place to deal with the problem of “too big to fail” financial institutions, including both banks such as JPMorgan Chase Inc. and Bank of America Inc., and large non-bank firms such as American International Group Inc. and Blackrock Inc., which are essentially firms that are so large or systemically important that their insolvencies would cause large amounts of economic and financial damage. The new law imposes “heightened risk oversight on large financial companies, including higher capital requirements, increased reporting and examination [and] resolution authority.”

Wednesday, The Financial Services Subcommittee on Financial Institutions and Consumer Credit held a hearing entitled “The Impact of the Dodd-Frank Act: What It Means to be a Systemically Important Financial Institution (SIFI).” SIFI is another way to refer to a company that is “Too Big to Fail.” At this hearing Scott Garrett made the following comments to panelist Lance Auer, the Treasury Department’s deputy assistant secretary for financial institutions: “So let’s be honest here, the entire debate about SIFI designation is nothing more than a charade. It’s the debate about which financial institutions are too big to fail. And we should not be debating which companies to call too big to fail, we should be debating: how do we end the taxpayer being on the hook for these institutions?”

Forgive me for being shocked by this statement. After all, Mr. Garrett opposed Dodd-Frank every step of the way, advocates for its repeal, introduces legislation to weaken the law and has held hearings in an attempt to intimidate S.E.C. regulators into not promulgating regulations designed to protect investors but which also might prove burdensome to his Wall Street benefactors. And now he wants us to believe he’s concerned that we the taxpayers will be on the hook should another of these SIFI’s fail.

Before Dodd-Frank, if a SIFI failed – and they did, the American taxpayers were the ones to pay for the bailout. For a real-world example of such a bailout go to Google and type in the acronym, T.A.R.P. Dodd-Frank set a framework for classifying certain institutions as “Too Big to Fail.” Thanks to Dodd-Frank, such institutions are now subject to higher capital reserve requirements and heightened levels of regulation. In addition, key provisions of the legislation will protect taxpayers from having to bailout such failures in the future. Christopher Matthews of Time Magazine wrote an excellent piece I encourage you to read which spells out the policies that were put in place to deal with such companies. Here are the key passages:

So how would the FDIC go about nursing one of the U.S.’s mammoth financial institutions through a crisis? First, the FDIC would put the firm’s “holding company” into receivership. The holding company is the part of the firm that owns all the subsidiaries. Some of the nation’s largest financial institutions own hundreds of subsidiaries, which are joined together by the holding company. Prior to Dodd-Frank, the FDIC had the power to resolve only federally insured banks and thrifts, and this was a crucial limitation when an investment bank like Lehman Brothers collapsed in 2008. With the new authority provided by Dodd-Frank, the FDIC will now be able to put any failed financial institution into receivership.

According to [Acting-Chairman of the FDIC] Gruenberg, the strength of taking just the holding company into receivership is that the subsidiaries can function on their own, upholding financial contracts and providing services for their clients. This strategy will help avoid the falling domino effect of the 2008 financial crisis, where one large bank failure caused many other institutions to go down as well.

After the holding company is taken into receivership, the FDIC will transfer its assets into a new company, keeping those subsidiaries open that are solvent. Debt holders of the old company will become the owners of the new company, and shareholders will be wiped out. So all the stakeholders in the company can expect to suffer losses — just like in any normal bankruptcy proceeding.

To provide financing to keep this new bank going during the transition, the Dodd-Frank law set up an “Orderly Liquidation Fund” at the Treasury Department. Any losses to this fund must be “repaid from recoveries on the assets of the failed firm or from assessments against the largest, most complex financial institutions,” said Gruenberg, adding that taxpayers will not be allowed to bear any loss from such a resolution.

Mr. Garrett, the legislation you’ve fought tooth-and-nail to defeat – and failing that to water-down, has provisions to protect taxpayers in the event a SIFI fails. Repealing Dodd-Frank means returning to a time not so long ago when the American taxpayer is expected to be the safety-net to protect our economy when Wall Street acts in a reckless manner. You can’t now claim you wish to protect us, when you’ve already shown us you’re more concerned with the health of Wall Street than Main Street. SIFI’s present a real danger to the world’s economy.

I understand it can be burdensome and costly for these behemoth institutions to be classified as a SIFI. This country can have a debate about how to define a SIFI and what additional rules and/or regulations need to be put in place to protect us in the event one of them fails in the future. But it would be criminal for our government to not learn the lessons of the recent past and allow such a scenario to unfold again. Your crocodile tears will not make us forget that you’ve opposed Dodd-Frank reforms from the outset.

The Silence is Deafening

Michael S — Thu, 17 May 2012 13:09:56 +0000

More is learned every day about the malfeasance committed at the trading desk of JPMorgan Chase. What was thought as recently as Monday to be a $2 billion loss on a series of risky trades is now expected to be at least a billion short of the actual figure. Experts commenting on the situation suspect the true losses to the company may actually be closer to $4 billion.

This private institution was gambling with taxpayer money. Shareholders are concerned that their quarterly dividend will be cut due to these losses. I am sympathetic to their concern but on a grander scale, I’m concerned that we’ve simply chosen to turn a blind-eye to the 2007 meltdown that began the downward spiral for our economy that we’re still trying to stop today.

I’m frightened by the lack of leadership on the part of Scott Garrett. That he continues to defend the need for unfettered capital markets is not surprising. The fact that he held a hearing as a way to reprimand the SEC for even considering ways to protect investors but won’t even consider that it might be prudent to rethink his position let alone schedule a hearing to look into actual wrongdoing at JPMorgan Chase is inexcusable.

We as taxpayers are providing the safety net to traders who engage in high-risk speculation. As Nelson Schwartz and Jessica Silver-Greenberg reported today in The New York Times:

The Federal Reserve is examining the scope of the growing losses and the original bet, along with whether JPMorgan’s chief investment office took risks that were inappropriate for a federally insured depository institution, according to several people with knowledge of the examination.

These traders can take any risk they choose because they know the FDIC will make them whole with taxpayer’s money. There doesn’t appear to be a bet too risky for these traders. This is not an isolated incident. We’ve witnessed time and again such behavior and yet people in a position to do something to stop it (I’m talking about you, Scott Garrett) refuse to act. I’m curious how bad things have to get before Scott Garrett steps in to defend us. I suspect there are no set of circumstances that could befall us which would cause Mr. Garrett to change his position.

Mr. Garrett, our economy has metaphorically hit an iceberg and we’re in trouble of sinking to the bottom of the ocean. You can no longer stand on the bridge and continue to ignore the flashing lights and warning bells. Put down your rose-colored binoculars. This ship will never make it to dry land if you refuse to plug the leaks and insist on regulations to prevent this from every happening again. Scott Garrett has got to go.

Yes Virginia, There is a War on Women

Michael S — Wed, 16 May 2012 16:43:56 +0000

Telemedicine is the use of telecommunication and information technologies to provide clinical health care at a distance. It helps eliminate distance barriers and can improve access to medical services that would often not be consistently available in distant rural communities. Imagine being able to respond to a stroke and start treatment within fifteen minutes, instead of having to transport patients to another facility while the window of treatment is closing. That’s telemedicine. Telemedicine is also necessary in any area of the country where abortion providers have been scared out-of-town or even killed; Wichita for example.

On May 10th, Scott Garrett signed on as a cosponsor to H.R. 5731, The Telemedicine Safety Act. This legislation would make it illegal for a health care provider to “prescribe, dispense, procure, administer, or otherwise provide any instrument, medicine, drug, or any other substance, device, or method to terminate the pregnancy of a woman who is pregnant, without such health professional conducting an in-person medical examination of such woman during her current pregnancy…” The penalty to the doctor for violating this law is a fine and/or prison for up to a year.

Scott Garrett would carve out and criminalize providing abortion-related services via telemedicine from every other form of legal health care. Under this proposed legislation if a woman gets raped or is the victim of incest, she cannot be prescribed the morning after pill unless she is physically in the same room as her doctor. On the other hand, if she were beaten and raped by an assailant, a doctor could use telemedicine to prescribe pain medication and issue orders on how to sucher the patient, but couldn’t prescribe medication to prevent a pregnancy that has yet to occur unless that physician was physically in the same room as the victim.

A proposal such as this would actually lead to more abortions. If a woman can’t get the morning after pill because her community has no physician willing to provide such services, and she can’t get medical help through telemedicine, there’s a good chance she’s going to become pregnant. Let me say that again for emphasis. She’s not pregnant now, but she might be forced into an unwanted pregnancy because this legislation makes it more difficult for her to prevent a pregnancy by using the morning after pill. What does Scott Garrett think is going to happen once a woman becomes pregnant against her will? Chances are she’s going to have an abortion.

Some areas of this country have limited access to any kind of health care provider. Some hospitals have to fly in physicians from out-of-state to staff emergency rooms. Some clinics only have a doctor on site during certain days of the week. Health care is not equally available in all parts of the United States. Should a women seeking medical help be penalized because she lives in an area in which no gynecologist has a practice? Is it the patient’s fault that a community may not be able to provide an adequate base of patients for a doctor to survive, let alone pay off expensive medical school loans? Telemedicine - or telehealth as it’s also know, is a life saving tool being praised all around the country. States are expanding the use of telemedicine as a critical tool in providing timely medical care to patients at the same time Congressmen like Scott Garrett are seeking to carve out an exception to preclude women from getting legal health care services.

This is not about preventing unwanted pregnancies. This is about controlling women’s bodies. This is about using any means necessary - legal or otherwise to deny women the right to control what happens to their bodies. If this were really about preventing unwanted pregnancies, these conservatives would introduce legislation to require all men at a certain time in their life to get a vasectomy. They would seek to criminalize engaging in intercourse unless expressly for the purpose of procreation, but they’re not. Instead, conservatives like Scott Garrett who set the Republican agenda have made it clear they intend to deny women hormonal birth control by passing “personhood amendments,” and then prevent any practical means for a woman to obtain an abortion.

This is about denying women access to legal health care services. This is about disproportionately impacting poor women who can’t afford to travel to places where a full range of health care services are readily available. This is about preventing scared young women from getting the health care they need. This is – despite the denial by Scott Garrett and others like him, a War on Women. Say it with me… Scott Garrett has got to go.

Wall Street Reform Made Simple Enough to Explain to Your Children

Michael S — Tue, 15 May 2012 20:44:20 +0000

In simplest terms, large financial institutions over-leveraged themselves in an extremely risky sector of the market that they now claim they didn’t fully understand. These financial institutions were repackaging high-risk “toxic-assets” and dumping them on an unsuspecting public. The reason they found buyers for these repackaged loans is in large part because the agencies responsible for rating these toxic assets – Moodys, Standard & Poor’s and Fitch gave these assets their highest rating; AAA. The reason banks could engage in such practices was the repeal of laws and regulations designed to prevent such practices. For example, while investment houses were still required to keep a certain percentage of assets in-house as insurance against leveraged investments, no regulations were in place to monitor the banks in this area. The banks were on the “honor system.”

In response to the real possibility that our economy could implode – taking the rest of the world with us, President Bush proposed and Congress passed legislation designed to shore up our economy. That legislation was known as TARP.

From Tarpprogram.com:

The troubled asset relief program, otherwise known as the TARP program, was implemented by the US government in 2008 to buy “troubled” equity and assets from banks and financial institutions as part of a historic effort to make the US financial system healthy again. Radical, virtually unprecedented steps in this direction became necessary amid fears that the subprime mortgage crisis was spinning out of control.

The idea was that the U.S. Treasury would be sanctioned through the TARP program to buy or insure up to $700 billion of these troubled assets because the market for them had ground practically to a halt, making them difficult or impossible to value.

The Democratically controlled Congress believed that these financial institutions were so large that should even a single one of them fail, it would have a catastrophic impact on our economy. In fact, these banks were so big Democrats feared their failure would not only cripple the US economy, but the rest of the world’s as well. With the election of President Obama in 2008, the Democrats controlled both Chambers in Congress and the Administration as well. Despite Republican efforts, Democrats were able to get Dodd-Frank through Congress and onto the President’s desk. Dodd-Frank was Congress’s and the Obama Administration’s attempt to better regulate these institutions to protect investors, prevent a similar crash in the future and prevent the financial bailout of these behemoths to be once again laid at the feet of the American taxpayer.

Scott Garrett and his fellow Republicans unsuccessfully fought to prevent Dodd-Frank from becoming law, although they did succeed in watering it down in several areas. For example, Republicans in the Senate – by threatening a filibuster, were able to replace a provision that financial institutions had to set aside $19 billion in a reserve fund to pay for any future bailout. Today banks don’t have to pay into the emergency relief fund; American taxpayers do. As a member of the Financial Services Committee, Scott Garrett has attempted to repeal Dodd-Frank and short of that has sought to prevent regulations from being implemented and tried to dry up funding to the regulatory bodies tasked with overseeing the markets. Garrett and his Republican colleagues have had some success in these areas.

JPMorgan Chase, the second largest bank at the time and its CEO, Jamie Dimon were supposed to be the exception to the rule. JPMorgan Chase didn’t engage in such risky and highly leveraged transactions. In fact, Republicans pointed to JPMorgan as proof that further regulations were not necessary; They could police themselves.

The fact that JPMorgan Chase has recently disclosed the loss of $2 billion in a highly risky and speculative series of stock trades has not dissuaded Scott Garrett from his position that regulation is the enemy of capital markets. Scott Garrett – while not alone in his beliefs, is definitely in the minority. The Star Ledger’s Editorial Board had this to say:

This blunder reminds us it’s the taxpayers who could be the ones on the hook: Wall Street’s bonuses encourage this kind of risk-taking, but, while the gamblers keep their winnings, they know the taxpayers are there with a safety net.

Meanwhile, Dimon and his fellow bankers lobby furiously to weaken government regulation of their industry — such as the Volcker rule, a piece of financial regulation that would prevent risky trades, even with the bank’s own money.

Dimon has personally lobbied against the Volcker rule, which critics say should outlaw precisely the kind of trade that cost JPMorgan $2 billion. Dimon says this costly trade wouldn’t be covered — but that’s only because he lobbied for a loophole that allowed it.

In 2008, the top 10 US banks had assets totaling approximately $8.8 trillion. Four years have passed since George Bush signed TARP into law. Since that time, US banks have gotten larger. Smaller banks were swallowed by large banks and large banks were swallowed by even larger banks. Today the top 10 US banks had assets totaling approximately $11.37 trillion. The risk of failure is growing not decreasing.

Republicans claim that Democrats are using this latest event as an excuse to fix a problem that doesn’t exist. They believe that President Obama and Congressional Democrats are using this “isolated incident” as an excuse to foist additional unnecessary regulations on our already regulatory-burdened financial markets. Scott Garrett believes that shareholders benefit in the good times and suffer in bad and that the risk stops there. The problem with that Ayn Rand-logic is that when times get really bad, shareholders aren’t the only ones made to pay. I didn’t invest in JPMorgan Chase stock and I don’t have my money at their lending institution. However, if Republicans have their way, I and my fellow taxpayers will bear the entire financial responsibility in the event JPMorgan Chase - today the largest financial institution in the United States actually goes under. If you don’t think it’s possible, ask a former employee of Bear Stearns or Lehman Brothers. I’m sure most of them didn’t think it was possible either.

Scott Garrett, the Chairman of the Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises has fought hard to prevent government regulation of our financial institutions and markets. As events continue to unfold, it is clear that Mr. Garrett is wrong on policy and philosophy. What should frighten us all is that Scott Garrett is in a position to effect change. It’s clear that Scott Garrett is more interested in protecting business on Wall Street than he is in protecting you and me. Scott Garrett has got to go.