Obama’s Stimulus Package: Is Any Good Coming Out Of It?

  I would say that yes, there is some good coming from the plan.

Kos

kktlaw  Tue Mar 31, 2009

Our President has brought to implementation more life-changing programs for millions of Americans than could be listed in this diary. OK, he did not do this alone. But under his leadership, I don't believe there has ever been a President who has changed the scope of America (for the better) in such a short time. Yes, he really can walk and chew gum at the same time, much to the Repugs' chagrin.

I want to share with y'all how these programs are working already. And they are working for people I know, including myself, in life-changing ways.

My friend Paula is a high school Spanish teacher in a large Southern California school district. She has been in this position for seven years and is highly regarded by her students and her administrators. At the end of February, she (and many of her colleagues) were called into a meeting where they learned that, due to state budget cuts, they would no longer have a job next September. The old "pink slip" day.

Paula was devastated. She is a single mom of two little girls. She saved for years and two years ago finally bought a condo overlooking a park for her girls. There are simply no teaching jobs to be had in So.Cal. because of these state-wide cuts. She didn't know where to turn.

Then, last Friday, Paula was called into another meeting, and learned that, because of President Obama's American Recovery and Reinvestment Act, better known as the "stimulus package", Paula and all her colleagues will keep their teaching jobs. The billions of dollars of funds being pumped into California have  already been allotted, and her district learned it would be able to keep all its teachers, and will even be able to hire some desperately needed ESL teachers and special education teachers.

One of my favorite neighbors, Bob, has been unemployed for over a year. He has over thirty years experience in health care administration, human resources, and hospital management. The last hospital group he was with merged with another chain and his job was eliminated. After months of networking, resume sending, and interviewing, he got a part-time "consultant" position at an L.A. health care group. He loved the job, but knew it was temporary, and since it was for only a few hours a week, it wasn't enough to sustain his large family. The owner of this Hispanic-owned non profit organization had applied to receive direct funds from the stimulus package. (The company provides free health care clinics in under-privileged areas as well as home care resources and pharmacy services to low-income populations.)

The owner had told Bob that if these funds were received, Bob would become a valuable full-time employee. Just this past week, the company received confirmation of the ARRA funds. Bob was hired into a position he already knew and already enjoyed!

Many of you know my own situation. I'm a lawyer who had a large income until I became ill with an autoimmune disease. The disease causes dizziness and falls, and lo and behold, I had a doozey of a fall last year, causing eleven major surgeries within one year, eight months in a physical rehab center (nursing home), two near-fatal staph infections, and permanent disability. Through all this, I became unable to make payments on my house that I have owned for fourteen years, never missing a payment until eight months after the accident. Prior to last week, my mortgage holder, Wachovia, had no interest in refinancing, restructuring, nor even negotiating, even though I persisted for months.

But last week, Obama's "Mortgage Relief Plan" hit the fan. I had been watching carefully when Wachovia would begin implementing it, and I called the very next day. Their attitude for the past few months has been, kind of, "Stop calling us, you scumbag. We're not going to help you. We just want your house, and you have __ days until we evict you and then we get your house."

BUT, when I went there in person last week, with all my paperwork, the website information, and a copy of the mandate by which Wachovia is abiding, the tone was quite different. It was "How can we be of service to you?" Heh, I love a good Federal mandate, don't you?

I'm still not clear on the details of my new loan. I know it will meet the requirements of the Mortgage Relief Plan, discussed here and here. From my limited research, it appears all big mortgage companies are obeying the mandate by offering the same programs. I plan to write a diary detailing my experience when I get through the escrow period, with a list of other banks offering the same program. For now, by going on the website's FAQ's  you can learn the "meat" of this program.

President Obama's mortgage plan has enabled me to keep my home, where my kids grew up, and which I have owned for more than fourteen years. The ARRA program has saved important teaching jobs and provided talented leadership like Bob's new position in the non-profit health sector. I will be forever grateful to our President for saving my house and giving my dear friends their much-deserved jobs. I just keep thinking how I would already be out in the street if McCain had won. I don't like to go there, but sometimes I can't help it.

I know this is just the beginning. I believe we will be hearing plenty other stories like this in the coming days and weeks. (Yes, DAYS and WEEKS, not months and years.)

Technorati Tags: Barack Obama,American Recovery and Reinvestment Act,stimulus package,Mortgage Relief Plan

The Solution to "Too Big" is Not Bigger

From DailyKos

by Devilstower  Sun Mar 29, 2009

The administration is seeking additional power to seize firms involved in the financial problems. Which is fine -- so long as their plan for dealing with these firms doesn't encourage more mergers and buyouts like JP Morgan / Bear Stearns or Whoever / Wachovia. Because, despite the Bush administration defending these mergers as "necessary to preserve the free market," they're neither necessary nor "free."

In fact, the last round of buyouts came with with speacial breaks instituted by then Treasury Secretary Hank Paulson, who rescinded a 1986 rule and provided an estimated $140 billion in tax breaks to grease the skids for mergers. In some cases, the government did more than make it easier for financial institutions to merge. In some cases it played Shadchan for reluctant partners, in others (as with Wachovia) it drove institutions to marry at the point of a fiscal shotgun. So banks that were too big to fail became bigger financial institutions that (like Citigroup) required billions more to keep afloat.

Let's wind back the clock a bit. Remember Smith-Barney, the brokerage that used the slogan "we make money the old fashioned way -- we earn it?" (you can bet no one on Wall Street is using that motto today) In the 1980s, Smith-Barney was already part of an insurance/brokerage mash-up called Primerica. Then Primerica was bought by Commercial Credit, which merged with Travelers Insurance, which bought the brokerage firm Solomon Brothers, which merged with Citicorp to form Citigroup. Fun fact: this was all pre-1999, when the Glass-Stegall Act was still in full effect, meaning that several of these mergers were probably illegal. But instead of enforcing the existing law, Congress chose to pass Gramm-Leach-Bliley, pasting a retroactive smiley face over these mergers and clearing the way for more in the future.

So instead of several smaller companies, we ended up with one behemoth which has collected $45 billion in bailout bucks, in addition to billions more in tax breaks -- $10 million of which is going to spruce up executive's offices.  But why should we be surprised by that, or by the bonuses handed out in AIG? When we gripe about these companies that have become "too big to fail," what we really mean is that they have become too big to be dictated to. They have been provided with such fiscal leverage, such control of the system, that they are too big for the United States government to control.

This is a problem whose coming was welcomed by many conservatives, who have long lived in a Rand-ian dream world where business size is equated to moral worth -- and feared by everyone else at least as far back as Teddy Roosevelt.

Theodore Roosevelt actually liked big business. He thought that the growth of big business was very healthy, that most of the businesses got there because they were efficient and the businessmen were doing their jobs right. But two things bothered him. ... One was just that idea that they were overshadowing the government, that some of these tycoons, such as J. P. Morgan, could presume that they were sovereign equals of the U.S. government.

For example, when the first big anti-trust suit under Roosevelt was brought, which was against Morgan's railroad combine, Morgan said, "Send your man to see my man and tell him to fix it up." Roosevelt's answer to that was, "That can not be done. Nobody treats as a sovereign equal to -- of the President. No company can presume to be -- no private interest can presume to be equal to the government. The government must be superior to all of these."

Market fundamentalists may cheer at the idea of government being bossed about by business forces, since they've long held disdain for government and awe of the most ruthless business mogols. They'll defend elevating business above government as "freedom" while ignoring the fact that it's enormously undemocratic. If we get anything out of living through the Great Bushwhack, let's hope it's a new understanding that the market fundamentalists are simply anti-American nuts.

From its beginning, the "American compromise" has represented an understanding that business be regulated by government for the betterment of both the market and the people. Teddy didn't mince words when it came to restating this as a central, and often neglected, role of the government.

Of course there are many sincere men who now believe in unrestricted individualism in business, just as there were formerly many sincere men who believed in slavery -- that is, in the unrestricted right of an individual to own another individual. ... The proposal to make the National Government supreme over, and therefore to give it complete control over, the railroads and other instruments of interstate commerce is merely a proposal to carry out to the letter one of the prime purposes, if not the prime purpose, for which the Constitution was founded.

When it comes to "too big to fail," the solution now as the same as it was a century ago: chop them up. That means not waiting until a company has an effective monopoly on the market before applying anti-trust laws. It means applying those laws when a company reaches the size where it deforms the market, bullies its competitors, and when the prospect of its failure is so frightening that we cushion its fall with billions in taxpayer assistance. It means applying those rules to AIG and Citigroup and others like them long before now.

So give the administration the authority to seize the companies at the heart of the financial meltdown. Not to let them "fail gracefully." Not to force them into more corporate marriages. Not to prop them up with more billions in government investment.

Seize them, then slice them, dice them... heck, use them to make julienne fries (whatever those are). The truth is that many of these corporate monsters are much less efficient as giants stitched together by the egos of their officers, than they were as separate entities. Chop 'em up. Then put back reasonable restrictions on the merger of financial institutions so that this doesn't happen again.

Technorati Tags: Economy,Business,Anti Trust