Congress is Failing America!
By: Rene Velez Mar. 17, 2009
In some of my commentaries I have often cited the majority of America’s congressmen are lawyers by profession. Although I have been known from time to time to make folly of how lawyers have a funny way of making simple matters a complicated bureaucracy, I could not of imagined that they were as foolish as they are collectively. At minimum I would have thought there was a sense of safety in numbers, because someone eventually comes out and says……”wait a minute this doesn’t seem right!. Our congress has been fed the hook line and sinker, they have been hood winked, hog tied, extorted, deceived, lied to and they don’t even know it. These are the people we have in a position of power and trust of our money and government. I am in disbelief and if it were not for the seriousness of the matter I would think it’s a comedy of absolute stupidity. I need to add, I am not alone on this! I think what I say here most of America is beginning to understand.
The World As It Is For You and Me
If you or I (the typical average American) is having a hard time and we find ourselves having to cover for business mistakes, losses and a poor economy, we could try to find investors and or banks to give us financial assistance. If we were in the position of AIG, if somehow we could possibly convince a bank to loan us $165 billion dollars, there would not be a bank or investor in the country worth their weight in salt, that would give us money unless there was a contract drawn up. (Of course this is very hypothetical as no one would lend us or invest in a $165 billion dollar failure) But, for this illustration the terms and conditions would say things like, no excessive compensation to owners and officers, no distributions unless approved by lender, collateral of all personal holdings and even those of your children would be at risk, a guarantor would be required, like your rich grandfather or someone who had some financial weight. The stipulations for this kind of highly speculative loan would be long and extracting of the company and its owners. You probably could not buy a company lunch unless the lender approved it. Not only is this typical for lenders to do, but regulatory agencies would require prudent legal documents for such a loan and just about any newly minted attorney would tell you….you should have that agreement in writing, recorded and all the like legal procedures complied with. The truth is we would not likely get this type of loan unless we were holding some very special wild card that would amount to a miracle card. Something like an anti-aging drug, or the cure to all known diseases. Not even a cure for cancer would warrant a $165 billion dollar nailout. Oops, bailout.
So the question is , why didn’t congress create a better loan term document for AIG? Was there perhaps a shortage of lawyers? Did no one realize that there was an expectation of performance, repayment, control and transparency and accountability. These concepts of negotiated terms are so basic to a financial transaction that if congress has not properly protected US taxpayers, I dare say it is malpractice.
The Keys to The US Treasury
I know there is some document out there with terms and all, but it would seem that whatever the legal jargon on that document is the net effect appears to be, congress gave AIG the keys to the US Treasury and has told AIG, “write yourself a check and we will square it out later.” When I was a young boy visiting my relatives in Puerto Rico, I came to the realization, the small town I lived in was indeed very small and I was by no means living in Brooklyn. On a given day my cousins and some friends decided to go on a camping adventure through the cane fields and farms in the local area. So we gathered all the equipment and I was assigned the task of going to the local “Bodega” (a small country store) to secure basic provisions. This amounted to bread, butter some hard salami and other goodies. The only issue is I had no money. My cousin said, “don’t worry just go in there get the stuff and Miguel will put it on our list.” I didn’t know who Miguel was but asked, hey how does Miguel know who I am. My cousin replied, “ you are grandpas’ grandson from New York, everybody knows who you are. Indeed people I never met and that were not related to me knew who I was in town, knew I was from New York, thought very highly of my New York lifestyle, and even called me by my first name. Surely, coming from New York that was novel but truly I never gave it too much thought. I was not brought up to think I was more special than anyone although in retrospect, I was privileged among even my immediate relatives. I went as instructed to the Bodega, was kindly greeted at the door ordered my supplies and when I was finished, I was never asked to pay. Miguel simply said to say hello to my Dad for him and wrote down our purchase in a “school composition book” and told me to have a great day! That was they way things were done in Puerto Rico in that day and age and in many Latin American countries round the world. Today, I realize I was given that honor because I was wealthy compared to many in the town. I was also very well known because of my grandfather, who was well liked and respected in the community. I was indeed privileged to have doors opened to me by people who had much less than I. Who respected accomplishments by my grandfather and father and therefore looked kindly to their children. These people knew my grandfather would not abuse his credit or repayment obligation even though my grandfather never authorized or called ahead to say, let the kids put it on my tab. The only way that happens is when you have a tight community.
Such is the case in Washington. AIG has close ties to Washington and their power and influence must have been strong enough to bypass common sense and the ordinary course of how things typically get done so that congress simply wrote down $165 billion in loans in their congressional “school composition book”. Of course it doesn’t hurt when President Bush, the Federal Reserve Chairman Bernanke and Treasury Secretary Paulson have committed themselves and the nation with the political language of “Financial Crisis”!. All, on the eve of the presidential elections. That’s the grease that makes things move quickly in D.C.
Bankruptcy By Default
When I read that congress can not do anything, about executive bonuses paid out of taxpayer bailout funds, because those agreements were already in place and that contracts can not be voided I say; “Non Sense!”. That’s the most ridiculous thing I have ever heard. Let’s have a trial by jury and see if you can find a diversified group of Americans that will agree to not voiding those contracts. Why didn’t congress force AIG to file bankruptcy in order to get the bailout? Why didn’t congress invoke the laws of bankruptcy as a condition to a government bailout? Was there not a single lawyer qualified in congress the day AIG was given the keys to the United Sates Treasury? Let’s face it this is bankruptcy by default. When the only alternative is for you to seek a government bailout with taxpayer money the jig is up. You are by all accounts more than bankrupt, you are indebted to taxpayers and the United States of America. In the case of bankruptcy, the trustee has enormous powers. They can force the return of money paid out by a company to anyone or any company. Enforce contracts and make others void. They can dispose of assets, abandon them etc. They have all kinds of tools in their arsenal of laws to fix things. Of course somehow AIG did not follow what you or I would have to do. They just went to their rich “Uncle Sam” and asked them for help. After all, they are a credible, pilar of the financial community and a model business failure to boot. You know that’s worth about $165 billion dollars. When you’re failure is that big you get special dispensation in America. The fact is they declared bankruptcy and in deed filed a petition to the United Stated Government and its taxpayers and congress does have the means to void contracts they deem unjust. Salary or not. Now can we find a decent lawyer in our congress to fight for the American public? Anyone? Let’s not forget the credibility of congress and this great nation is at stake!
True Concern for our Future
I have but the utmost belief that this country will regain better days, but it is going to cost this country dearly. In addition to regaining ground we must do a multitude of things correctly simultaneously. Therein lies my fears. Our track record in allowing this crisis to happen and to respond to it leaves me and many Americans to be gravely concerned about our nation’s ability to handle these types of crisis without further sustained injury to the economic lives of our citizens. Our democracy as great as it is, is not used to or prepared for this modus operandi. I do not believe any members of congress have ever faced this type of crisis management and many are disconnected to the realities of the vast majority of our population. Many of our citizens will continue to get hurt in this arena and there is no safety net in place. The lacking leadership in this country and many of the economic inequities that has been coming forward for the past 30 years seem to be quickly coming to a head as the economy continues to contract. I know this seems alarmist. It really is not my style.
Plan for Action / Plan For Change
Congress needs to create a special committee to study analyze and become a special economic and crisis management team to make sure taxpayer money, the presidents economic recovery plan and a multitude of national priorities are carried out efficiently and effectively. The concept of a House and Senate bi-partisan legislative process conducting business as usual simply is not enough or efficient. Like many business ventures streamlining and fast tracking plans of action need to be implemented. In some ways the logistics of warfare could be put to good use in the current economic climate and in carrying out national initiatives. I realize as a democracy we deplore this concept. As much as I hate to admit it, we could learn from how the Chinese have managed to combine political ideology with capitalism.
I would not think of changing our form of government. My comments are geared towards changing how we do things not why we do things. We have to change how we do things in order to arrive at a different outcome. I don’t think in our country’s case it is fair to look back at history and apply exactly the same tactics that have worked in the past. The world, our position in it and the pace at which our global economies react are much different today than they were in 1933 or 1974. We need to recognize this and adapt. Congress and our president needs to somehow recognize that we need to change the business of politics if we are to be able to sustain a competitive edge. If we are to survive as a leader of nations.
By: Rene Velez Mar. 17, 2009
In some of my commentaries I have often cited the majority of America’s congressmen are lawyers by profession. Although I have been known from time to time to make folly of how lawyers have a funny way of making simple matters a complicated bureaucracy, I could not of imagined that they were as foolish as they are collectively. At minimum I would have thought there was a sense of safety in numbers, because someone eventually comes out and says……”wait a minute this doesn’t seem right!. Our congress has been fed the hook line and sinker, they have been hood winked, hog tied, extorted, deceived, lied to and they don’t even know it. These are the people we have in a position of power and trust of our money and government. I am in disbelief and if it were not for the seriousness of the matter I would think it’s a comedy of absolute stupidity. I need to add, I am not alone on this! I think what I say here most of America is beginning to understand.
The World As It Is For You and Me
If you or I (the typical average American) is having a hard time and we find ourselves having to cover for business mistakes, losses and a poor economy, we could try to find investors and or banks to give us financial assistance. If we were in the position of AIG, if somehow we could possibly convince a bank to loan us $165 billion dollars, there would not be a bank or investor in the country worth their weight in salt, that would give us money unless there was a contract drawn up. (Of course this is very hypothetical as no one would lend us or invest in a $165 billion dollar failure) But, for this illustration the terms and conditions would say things like, no excessive compensation to owners and officers, no distributions unless approved by lender, collateral of all personal holdings and even those of your children would be at risk, a guarantor would be required, like your rich grandfather or someone who had some financial weight. The stipulations for this kind of highly speculative loan would be long and extracting of the company and its owners. You probably could not buy a company lunch unless the lender approved it. Not only is this typical for lenders to do, but regulatory agencies would require prudent legal documents for such a loan and just about any newly minted attorney would tell you….you should have that agreement in writing, recorded and all the like legal procedures complied with. The truth is we would not likely get this type of loan unless we were holding some very special wild card that would amount to a miracle card. Something like an anti-aging drug, or the cure to all known diseases. Not even a cure for cancer would warrant a $165 billion dollar nailout. Oops, bailout.
So the question is , why didn’t congress create a better loan term document for AIG? Was there perhaps a shortage of lawyers? Did no one realize that there was an expectation of performance, repayment, control and transparency and accountability. These concepts of negotiated terms are so basic to a financial transaction that if congress has not properly protected US taxpayers, I dare say it is malpractice.
The Keys to The US Treasury
I know there is some document out there with terms and all, but it would seem that whatever the legal jargon on that document is the net effect appears to be, congress gave AIG the keys to the US Treasury and has told AIG, “write yourself a check and we will square it out later.” When I was a young boy visiting my relatives in Puerto Rico, I came to the realization, the small town I lived in was indeed very small and I was by no means living in Brooklyn. On a given day my cousins and some friends decided to go on a camping adventure through the cane fields and farms in the local area. So we gathered all the equipment and I was assigned the task of going to the local “Bodega” (a small country store) to secure basic provisions. This amounted to bread, butter some hard salami and other goodies. The only issue is I had no money. My cousin said, “don’t worry just go in there get the stuff and Miguel will put it on our list.” I didn’t know who Miguel was but asked, hey how does Miguel know who I am. My cousin replied, “ you are grandpas’ grandson from New York, everybody knows who you are. Indeed people I never met and that were not related to me knew who I was in town, knew I was from New York, thought very highly of my New York lifestyle, and even called me by my first name. Surely, coming from New York that was novel but truly I never gave it too much thought. I was not brought up to think I was more special than anyone although in retrospect, I was privileged among even my immediate relatives. I went as instructed to the Bodega, was kindly greeted at the door ordered my supplies and when I was finished, I was never asked to pay. Miguel simply said to say hello to my Dad for him and wrote down our purchase in a “school composition book” and told me to have a great day! That was they way things were done in Puerto Rico in that day and age and in many Latin American countries round the world. Today, I realize I was given that honor because I was wealthy compared to many in the town. I was also very well known because of my grandfather, who was well liked and respected in the community. I was indeed privileged to have doors opened to me by people who had much less than I. Who respected accomplishments by my grandfather and father and therefore looked kindly to their children. These people knew my grandfather would not abuse his credit or repayment obligation even though my grandfather never authorized or called ahead to say, let the kids put it on my tab. The only way that happens is when you have a tight community.
Such is the case in Washington. AIG has close ties to Washington and their power and influence must have been strong enough to bypass common sense and the ordinary course of how things typically get done so that congress simply wrote down $165 billion in loans in their congressional “school composition book”. Of course it doesn’t hurt when President Bush, the Federal Reserve Chairman Bernanke and Treasury Secretary Paulson have committed themselves and the nation with the political language of “Financial Crisis”!. All, on the eve of the presidential elections. That’s the grease that makes things move quickly in D.C.
Bankruptcy By Default
When I read that congress can not do anything, about executive bonuses paid out of taxpayer bailout funds, because those agreements were already in place and that contracts can not be voided I say; “Non Sense!”. That’s the most ridiculous thing I have ever heard. Let’s have a trial by jury and see if you can find a diversified group of Americans that will agree to not voiding those contracts. Why didn’t congress force AIG to file bankruptcy in order to get the bailout? Why didn’t congress invoke the laws of bankruptcy as a condition to a government bailout? Was there not a single lawyer qualified in congress the day AIG was given the keys to the United Sates Treasury? Let’s face it this is bankruptcy by default. When the only alternative is for you to seek a government bailout with taxpayer money the jig is up. You are by all accounts more than bankrupt, you are indebted to taxpayers and the United States of America. In the case of bankruptcy, the trustee has enormous powers. They can force the return of money paid out by a company to anyone or any company. Enforce contracts and make others void. They can dispose of assets, abandon them etc. They have all kinds of tools in their arsenal of laws to fix things. Of course somehow AIG did not follow what you or I would have to do. They just went to their rich “Uncle Sam” and asked them for help. After all, they are a credible, pilar of the financial community and a model business failure to boot. You know that’s worth about $165 billion dollars. When you’re failure is that big you get special dispensation in America. The fact is they declared bankruptcy and in deed filed a petition to the United Stated Government and its taxpayers and congress does have the means to void contracts they deem unjust. Salary or not. Now can we find a decent lawyer in our congress to fight for the American public? Anyone? Let’s not forget the credibility of congress and this great nation is at stake!
True Concern for our Future
I have but the utmost belief that this country will regain better days, but it is going to cost this country dearly. In addition to regaining ground we must do a multitude of things correctly simultaneously. Therein lies my fears. Our track record in allowing this crisis to happen and to respond to it leaves me and many Americans to be gravely concerned about our nation’s ability to handle these types of crisis without further sustained injury to the economic lives of our citizens. Our democracy as great as it is, is not used to or prepared for this modus operandi. I do not believe any members of congress have ever faced this type of crisis management and many are disconnected to the realities of the vast majority of our population. Many of our citizens will continue to get hurt in this arena and there is no safety net in place. The lacking leadership in this country and many of the economic inequities that has been coming forward for the past 30 years seem to be quickly coming to a head as the economy continues to contract. I know this seems alarmist. It really is not my style.
Plan for Action / Plan For Change
Congress needs to create a special committee to study analyze and become a special economic and crisis management team to make sure taxpayer money, the presidents economic recovery plan and a multitude of national priorities are carried out efficiently and effectively. The concept of a House and Senate bi-partisan legislative process conducting business as usual simply is not enough or efficient. Like many business ventures streamlining and fast tracking plans of action need to be implemented. In some ways the logistics of warfare could be put to good use in the current economic climate and in carrying out national initiatives. I realize as a democracy we deplore this concept. As much as I hate to admit it, we could learn from how the Chinese have managed to combine political ideology with capitalism.
I would not think of changing our form of government. My comments are geared towards changing how we do things not why we do things. We have to change how we do things in order to arrive at a different outcome. I don’t think in our country’s case it is fair to look back at history and apply exactly the same tactics that have worked in the past. The world, our position in it and the pace at which our global economies react are much different today than they were in 1933 or 1974. We need to recognize this and adapt. Congress and our president needs to somehow recognize that we need to change the business of politics if we are to be able to sustain a competitive edge. If we are to survive as a leader of nations.
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