The Silence is Deafening
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
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
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.
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.
The Stump Speech I’m Waiting to Hear
This country is not for sale. Despite actions by Republicans like Scott Garrett, this country is not for sale. Since the inception of our Republic, special interests have attempted to curry favor with decision-makers in the political arena. I can say now without fear of contradiction that like no time before, the stakes have never been higher, and the playing field has never been more tilted in their favor.
The combination of Citizens United and career politicians like Scott Garrett have created in Washington a situation in which the foxes are truly guarding the hen-house. Representatives are sent to Washington to protect the interests of their constituents. Many of these constituents have business interests that need protecting as well. However, when the balance between protecting the interests of business and the needs of the people shifts so dramatically against the people, we cannot afford to remain silent.
This country was founded by a band of underdogs seeking freedom; Freedom from a monarch not interested in protecting his subjects, but rather using them as a source of revenue to be tapped into whenever necessary. After almost 250 years, we have come full-circle. The names and titles have changed, but the game remains the same. The King has been replaced by the corporation; Colonial Governors are now Members of Congress. The lot of the people however remains the same - without a real say in the way in which we are governed.
Time and time again, Scott Garrett has sided with the needs of corporations over the needs of his constituents. When Scott Garrett voted against The Affordable Care Act he was putting the interests of corporations ahead of the needs of his constituents. The Affordable Care Act requires health insurance companies to cover people with pre-existing conditions. It requires that 80% of all health insurance premiums go to providing health care and not marketing, lobbying or paying bonuses to executives. It allows children under the age of 26 to remain on their parents health care policy. It closes the “donut hole” that keeps prescription medication for some seniors out of reach. To cap it off, The Affordable Care Act actually reduces the deficit by $220 billion over ten years.
Scott Garrett is not looking for ways to make sure you and your family have access to affordable health care coverage. He seeks to maintain the large profit-margin of the health insurance industry at our expense.
Scott Garrett opposes Wall Street Reform and as a chairman of a Financial Services Subcommittee has passed legislation to try to roll back consumer protections in order to maintain the maximum profitability of Wall Street. Scott Garrett is supposed to protect Main Street from Wall Street. Instead, he leaves us exposed to their exploitation.
Americans are hurting. We need good paying jobs. Instead of working with the administration to create these jobs through stimulus spending, he rails against deficits telling anyone who will listen that we need to get our financial house in order. I ask you Mr. Garrett why weren’t you concerned with deficits when you voted for unpaid for wars, unpaid for tax breaks geared to the top 1 percent and voted for an unpaid for senior prescription drug benefit? I say to Scott Garrett “stop playing political games with American jobs. Fight for us, not the special interests.”
Scott Garrett would have you believe that tax cuts pay for themselves because money left in the hands of wealthy “job creators” will lead to an expanding economy and will thus through a broaden our economic base and bring more money into the Treasury. In fact, the opposite has happened. Both tax cuts during the Bush years widened our annual deficit. Even Republican economists have finally admitted the truth. Tax cuts do not pay for themselves.
Alan D. Viard, a former Bush Jr. White House economist said “Federal revenue is lower today than it would have been without the tax cuts. There’s really no dispute among economists about that.” “It’s logically possible” that a tax cut could spur sufficient economic growth to pay for itself, but there’s no evidence that these tax cuts would come anywhere close to that.”
Scott Garrett is not looking out for the interests of the average American taxpayer, unless the average American taxpayer earns more than $1 million per year.
The list is long and inglorious. Whether it’s off-shore drilling, emergency health care benefits for 9/11 rescue workers, the proposed auto bailout, campaign finance reform, relief aid for hurricane victims or making education affordable, Scott Garrett always seems to side against the interests of the average American while protecting the interests of the large corporations that provide the funds to keep him in Congress.
Mr. Garrett, I say to you that “protecting the general welfare” does not just apply to corporate America. Americans are hurting and you are not helping. We have asked for your assistance and instead you have closed the door and shut us out. No more, Mr. Garrett. You are sent to Washington to represent us and you have clearly failed in this endeavor.
Ladies and gentlemen, I ask for your vote because we need a new voice and vision in this district. We need a vision of possibility. We need a voice seeking to protect us all. We need a Congressman working to make all of our lives a little better, not just the people and corporations who contribute to Mr. Garrett’s political campaign. I seek to be that voice. Thank you.
Paul Ryan is the Best Friend of Democrats Everywhere
For the third time in recent memory, Congressman Paul Ryan has given Members on both sides of the aisle campaign material on which to run. The first two times, Congress voted on Ryan-constructed Republican budgets that called for massive cuts to social safety-net programs, replacing Medicare with a voucher program and providing tax cuts for the wealthiest among us.
The third Ryan budget proposal is the Republican solution for replacing automatic cuts in defense spending that would begin next year as a result of the deal reached between Congressional Republicans and the Administration to raise the debt ceiling. Republicans demanded hundreds of billions be cut from the budget as their price for going along with raising the debt ceiling and thus preventing the Federal government from defaulting on its obligations.
The problem is that Republicans do not want any of the cuts they agreed to last year to come from defense spending. In reality, even with these cuts, defense spending will still increase by 20 percent, but apparently that’s not good enough for Congressional Republicans. Never fear, Americans; Paul Ryan has the solution. Instead of trimming back a military budget which is larger than the next 15 countries on the list combined, Paul Ryan proposes cutting $83 billion in federal retirement benefits, capping medical malpractice lawsuits to save $49 billion, slashing about $48 billion from Medicaid programs and reducing food aid by more than $36 billion.
When I first saw this proposal I thought no one would ever go along with such a plan. Who would be heartless or craven enough to blatantly prioritize defense spending over retirees and the poor? Well, Paul Ryan’s “Sequester Replacement Reconciliation Act of 2012″ – or as I like to call it “Preserve Bloated Military Spending at the Expense of the Poor and the Elderly Act of 2012″ passed the House by a vote of 218 to 199. Everyone of those 218 votes came from Republicans. Not a single Democrat – not even the Blue Dogs, voted in favor of passing the bill. It goes without saying that Scott Garrett voted in favor of the bill. Fortunately, the Senate is not likely to even consider this bill, so this was a symbolic vote for House Republicans. It was a symbolic vote signalling to the Republican base ”we believe as you that military spending is of the highest importance.”
It’s ironic that the Republicans who fall on their swords to see the appropriations faucet open full-throttle at the Pentagon are the same Republicans who consistently vote against things like improving health benefits for returning veterans, giving employers incentives to hire returning members of the military and making it easier for veterans to obtain additional education.
What do we make of the gulf that exists between the two parties for how we prioritize spending in this country? By casting such votes, Scott Garrett is telling his constituents that he prioritizes military spending (except money directed at returning soldiers) over protecting seniors and the poor. He can make any arguments he likes to try to make it appear differently, but the boiled-down facts are obvious and unavoidable.
I say to the candidates running against Scott Garrett this is a campaign issue. It’s an issue that positioned properly cuts across all people regardless of their political affiliation. It’s an issue that will not fade with time if the candidates refuse to allow it to disappear from our collective memory. I urge them all to pick up this burning-flame of an issue and give Scott Garrett a metaphorical hot-foot every chance they get from now until November.
I’d Like Your Feedback
I’ve created a quick ten question survey and I hope you’ll all participate. It shouldn’t take more than three minutes to complete. Thanks in advance for your participation. I will publish the results.
Take Our Survey!Government Spending in a Recession
An unemployment rate of 8.1% translates to roughly 12.5 million Americans out of work. In rough numbers, every time the unemployment rate goes up one tenth of a percent, an additional 154,000 Americans are added to the unemployment rolls.
According to Okun’s Law, a 1% rise in unemployment translates into a 2% drop in Gross Domestic Product (GDP). High unemployment has an impact on government expenditure, taxation and the level of government borrowing each year. An increase in unemployment results in higher benefit payments and lower tax revenues. When individuals are unemployed, not only do they receive benefits but also pay no income tax. As they are spending less they contribute less to the government in indirect taxes. This rise in government spending along with the fall in tax revenues may result in a higher government borrowing requirement.
In yesterday’s edition of The Wall Street Journal, Justin Lahart wrote an article citing Department of Labor statistics which made the case that without the deep cuts in state and local government spending, the unemployment rate would be 7.1% a full percentage point lower than it is today. 
That’s an additional 1.54 million people who would be working today and not looking for a job.
Lahart wrote: The Labor Department’s establishment survey of employers — the jobs count that it bases its payroll figures on — shows that the government has been steadily shedding workers since the crisis struck…
Lahart postulates ”One reason the unemployment rate may have remained persistently high: The sharp cuts in state and local government spending in the wake of the 2008 financial crisis, and the layoffs those cuts wrought.” This sharp reduction in state and local spending was a result of the insistence by Congressional Republicans like Scott Garrett that stimulus money earmarked for the states had to be eliminated from President Obama’s stimulus package.
As previously stated here on this site, it is more costly to our economy to have higher unemployment than it is to pay interest on borrowed money to keep government workers employed.
Scott Garrett, you’ve been backed into a corner by The Wall Street Journal, the bible of conservatives everywhere. Here’s proof of what many of us have known all along. Your policies of financial austerity in an economic downturn are having a deleterious impact on us all. Here’s how our economy has performed to date during the Obama Administration. What’s plain to see is that president’s policies are heading this economy in the right direction. 
Taking into account Okun’s Law, Scott Garrett’s economic policies are at least partially responsible for a 20 point decrease in America’s GDP since 2008. No one is happy to see an increase in the annual budget deficit. But there is a time and a place for everything. Mr. Garrett you should have been screaming for financial restraint during the reckless spending years of the Bush Administration. I for one would have had you back if you had bucked your party and demanded that wars be paid for, that tax cuts have a cost – they are not free and finally prescription drug benefits for seniors needed to be paid for as well. But you didn’t do that.
You waited until your party was out of the White House and then decided that “The Great Recession” was the perfect time to bring our financial house in order. Scott Garrett is like a bank security guard who allows the robbers to walk out of the bank with all our money and pulls his weapon on the person who comes in to ask for a loan.
