Opinion

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Written by: Sophie Annan Jensen

Published: 04 January 2009

The flat-out refusal of the nation's bailed-out banks to tell us anything about how they're spending that money was disclosed recently by the Associated Press.

Quite a few of the news media used this headline: “Where'd the bailout money go? Shhhh, it's a secret.”

The Associated Press' Matt Apuzzo contacted 21 banks that have received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what's the plan for the rest?

None of the banks gave specific answers. One took it beyond stonewalling with, "I just would prefer if you wouldn't say that we're not going to discuss those details."

Another recent story disclosed the same banks awarded their top executives nearly $1.6 billion in salaries, bonuses and other benefits last year.

The news left many people stunned, but if you've looked at your credit card interest rates lately, you might have already been stunned. Maybe you asked them why; I did and got these answers.

The first is more responsive than what the top guys are telling the big media. The second is from a company whose chairman ran up a $211,182 bill for private jet travel last year when his family lived in Chicago and he commuted to New York.

Response from Citi

Subject: Your bailout money

Date/Time 12/19/08 03:15:57 PM

You wrote:

If you can afford to spend $400 million on naming rights for the Mets stadium, you can lower my interest rate. The government bailout was intended to help consumers.

Subject Re: Your bailout money

Date/Time 12/19/08 04:27:29 PM

Customer Service Wrote:

We would like to inform you that we have restored the APR on your account to the standard APR on all of the active balances, including:

- Balance Transfer Rates

- Rate Sale Offers

- Intro Rates

- APR Buy-Downs

The lower APR will appear on your next statement.

Thank you for using our website.

Response from Chase

Date:12-20-2008 11:46:47

From:Credit Card Support

Subject:Re: Fees/Finance Charges Message:

Dear SOPHIA JENSEN:

We apologize that our previous response did not fully address your inquiry and would like to take this

opportunity to resolve any remaining issues.

We've received $25 billion and we're working to make sound decisions; we want to be sure these funds will help us expand the flow of credit where it makes the most sense. This could help customers across our consumer, corporate, institutional and governmental client bases.

The funds we received will help us expand the flow of credit where it will be most effective. And, while we still have to make the right decisions for each and every customer, the purpose of the Troubled Assist Relief Program isn't individual assistance."

I know Congress is working diligently to make sure they can help consumers, and we're working to ensure that each account decision is handled appropriately in this current economic environment.

If further questions should arise regarding the information above, please call me at the number below. If you have concerns regarding any other issue, please contact Cardmember Services at 800-436-7927.

Thank you,

XXXX

Customer Care Specialist

Chase tried damage control Tuesday with a statement that they are "lending the fund to consumers, small businesses, corporations, municipalities and other institutions in a disciplined and responsible manner."

Credit unions aren't getting a lot of attention in this chaos, perhaps because they are only getting $40 billion total, and it can only be spent on mortgage help for their members. Both Mendo-Lake and Redwood credit unions serve Lake County.

Sophie Annan Jensen is a retired journalist. She lives in Lake County.

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Written by: JoAnn Saccato

Published: 02 January 2009

 

 

While I am not in agreement with the recent decision of the Clearlake Planning Commission to recommend the Clearlake City Council certify the environmental impact report for the Provinsalia project, I am quite encouraged by the process and have a renewed hope for our democracy. People are becoming active in designing and co-creating the community we all call home.

Once, individual property rights were considered the top priority. Today, we can no longer deny the connected nature of all things, and the good of the whole community becomes more important than the good of the few. While once the path and priorities of a community were set by a select few, usually those with property and money, people have awakened to making those decisions that affect them and their community directly.

Provinsalia affects many aspects of the community. Clearlake’s population is beginning to see that there are seemingly far more important considerations at hand than a potential substantial profit for the owners, developers and contractors. Sewer, land use, traffic impact, environmental degradation and school impact are just a few of the areas where local community members have voiced opposition. My guess is that if a substantial portion of the community were found to be against a project, the City Council would be bound by ethical commitments to honor their constituents.

Here are a few more points of consideration:

– Raising the median income of Clearlake is a worthy goal, but, to do so by importing a population of a much higher income bracket to achieve this is, well, deceptive, in the least, and disregarding the current population at best. If our city is committed to this goal, which I wholeheartedly support, then the focus should be on the existing residents of Clearlake.

– Has the developer pledged to use local labor for construction and support services? How many of the current or recently completed construction projects in Clearlake use/d local contractors and labor? If our city were really committed to raising the living standards and median income of our residents, they would make efforts to ensure that our local citizens are being employed whenever possible, thus increasing income and the dollars spent in local community.

– What will Clearlake need to become in order to cater to this new population that we are enticing to move within our city limits? It is already well understood, and admitted by city staff at the last meeting, that residential development in itself actually cost cities money. So, cities usually depend on increased commercial activity to offset costs and positively affect the city’s coffers.

While this may be true (though hard to believe possible in the economic crisis we find ourselves), if the city were committed to supporting the existing locally owned small businesses and encouraged the continued gentrification of downtown and Lakeshore Drive, then this could be seen as a commendable act. But, instead, the city of Clearlake is negotiating with big box stores that will actually decrease local income due to the local multiplier effect (LME).

This economic function tells us that $100 spent at a national retailer yields a return of about $15 to the local economy, though, when that same $100 is spent with a local retailer, it returns about $45 or three times as much income to the local economy. Also, the returns in the community from the national chain stores are usually in the form of lower-level service job wages, and none of this even takes into account the local support services (i.e. accountants, printers, etc.) that local businesses utilize that chain retailers usually do not.1 If we are trying to grow decent paying jobs for residents, big box chains in our community will not support this, and they drive out the independently owned merchants. How many businesses closed as a result of Wal-Mart’s entrance into the city? How many more will close if Wal-Mart is allowed to expand? This doesn’t seem to be an effective way to support our local community or grow our local economy.

– This model of development is not only not sustainable, it is actually contributory to the current economic and environmental crises we find ourselves today. It is outdated and outmoded by new and diverse models of development that seek to uplift and benefit all equally rather than just a small, affluent portion of it. The model of the sustainable future includes infilling already existing development and designing communities for walking, bicycling and small electric motorized vehicles rather than large distances traveled by big automobiles. It includes revitalization efforts that include education to create and support small, local businesses and production.

Again, the happiness I feel stems from the fact that the whole community is participating in the future of development for Clearlake. People are stepping up and voicing their concerns and opinions. There is hope that Clearlake will not fall wayside to the now-crumbling dominant economic model of development that has contributed to the demise of our social, economic and environmental fabric. This, to me, is reason to celebrate.

JoAnn Saccato, a native of Lake County, is a master's student at Sonoma State University and current chair of the Lake County Community Co-op.

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Details

Written by: Brooks Jackson

Published: 27 December 2008

We've often said that the spin never stops in Washington. And the weeks since Nov. 4 offer further evidence of that.

Consider some of the bogus claims we've debunked just since Election Day:

• It's not true that unionized auto workers at Detroit's Big Three make more than $70 an hour, as claimed by some opponents of federal aid.

• And no, 3 million workers won't be tossed out of work if aid is not forthcoming, as claimed by those favoring a taxpayer bailout.

• President-elect Obama never promised to seek a ban on all semi-automatic weapons, as claimed by some fearful gun owners.

• And no, Obama did not propose a Gestapo-like civilian security force as claimed by a Republican member of Congress from Georgia and any number of overwrought bloggers.

• Democrats in Congress are not discussing any plan to confiscate the assets in 401(k) retirement accounts, another falsehood spread about by chain e-mails and Internet postings.

• House Speaker Nancy Pelosi did not demand a 757-size personal jet, a false claim resurrected when Democrats criticized Big Three executives for flying to D.C. on their own private jets to beg for aid.

• And Pelosi's husband doesn't own a $17 million stake in a food company that she may (or may not) have tried to help with an exemption from a new minimum wage law.

Analysis

The troubles of the auto industry have spawned a number of exaggerations and falsehoods, including a couple of TV spots we're including here, claiming that millions of jobs will be lost if taxpayers don't cough up billions in aid to General Motors, Ford and Chrysler.

Three million jobs?

There's no question that hundreds of thousands of jobs would be lost should General Motors or Chrysler go under, delivering a severe blow to an economy already facing one of the worst recessions in modern history. But would it be three million as claimed in a TV spot by "America's Auto Dealers"? Or "millions" as claimed in another by the United Auto Workers?

Not likely, as we explained in detail in an Ask FactCheck item posted Dec. 24. That three million figure comes independently from two groups, one with ties to the automakers and another with a tie to the union. Both are based on the unlikely assumptions that all three automakers will be forced to shut down (Ford has said it can make it through without aid for now); that all their suppliers will go under; and that even Toyota, Honda and other foreign automakers will shut down all their U.S. manufacturing operations. Independent economists say all that isn't likely to happen. David Wyss, chief economist of Standard & Poor's, estimates that at worst half a million jobs would be lost if GM and Chrysler both go out of business.

$73 an hour?

On the other hand, it's not true that the unionized workers at the Big Three take home $75 an hour, as claimed by some bailout foes. That figure represents total labor costs, including wages paid to current workers and the cost of their benefits, plus a substantial amount paid to the Big Three's many retired workers for their pensions and health benefits.

The labor cost figure is higher than the estimated average labor costs for the U.S. plants of Toyota and other foreign producers, to be sure. But that's due largely to the fact that the foreign-owned plants aren't saddled with big payments to retired workers.

For more, see the Ask FactCheck item we posted Dec. 11 (http://factcheckcms.bootnetworks.com/articles/articleview.php?id=865).

Different versions of the dealer's ad ran in Kentucky and Minnesota and the UAW ad ran in Washington, D.C., according to the Campaign Media Analysis Group of TNS Media Intelligence, which featured them as its "Ad of the Week" for Dec. 15.

Obama get your gun?

The election of Barack Obama and the expansion of Democratic majorities in the House and Senate have spawned some misinformation spread by viral e-mails and bloggers. One is a fake quote in which Obama supposedly promised during his presidential campaign to seek "bans on all semi-automatic guns," a category that would include many common handguns, hunting rifles and shotguns. As we detailed in an Ask FactCheck item posted on Dec. 8, this claim is baseless and the quote is almost certainly fabricated.

It is also not true that Obama said he'd seek to create a Gestapo-like "civilian national security force," as claimed by Republican Rep. Paul Broun of Georgia shortly after the election. Broun said that's "exactly what Hitler did in Nazi Germany and it's exactly what the Soviet Union did." But it turns out, he was echoing misinformation that had been circulating for months on the Internet and through anonymous chain e-mails. It was a badly distorted version of Obama's call for doubling the Peace Corps, creating volunteer networks and increasing the size of the Foreign Service. Details are in an Ask FactCheck item we posted Nov. 11.

Democrats get your retirement?

As if the stock market's nose dive wasn't enough to worry about, some rumormongers were spreading a baseless claim that congressional Democrats were talking about confiscating IRA and 401(k) investment accounts. This falsehood was started by a Nov. 4 report posted by the Carolina Journal, a publication of the conservative John Locke Foundation of Raleigh, N.C. But as we reported in an Ask FactCheck item posted Nov. 19, the report was simply wrong. It was a twisted account of what one House witness actually had proposed – to allow some people to trade their old accounts for a new type that would be less risky, on a voluntary basis.

Democratic House Speaker Nancy Pelosi continued to be a magnet for misinformed attacks. More than a year ago, we debunked a claim that she was advocating a "windfall" tax to take 100 percent of the profits of any stock sale. That claim, a fraud complete with a fabricated quote, is still listed in our "Hot Topics" section as among the claims that we're most frequently asked about.

But since the election, we've had many questions about other anti-Pelosi claims as well:

• She doesn't have routine use of a private 757-size jet. This misinformed claim was revived after Democrats ridiculed the chief executives of GM, Ford and Chrysler for flying to Washington on their own private jets when they first came begging for a taxpayer bailout. The truth is that Pelosi normally flies in the same type of 12-seat Air Force jet, a military version of the Gulfstream III, that was used by her Republican predecessor Dennis Hastert. For more, see the Ask FactCheck item posted Dec. 21 (http://factcheckcms.bootnetworks.com/articles/articleview.php?id=8650).

• Her wealthy husband does not, as widely claimed, have a $17 million stake in Del Monte foods. That bit of misinformation originated in a short-lived Wikipedia item that was quickly removed for lack of substantiation. And American Samoa never got the exemption from federal minimum-wage laws that Pelosi supposedly sought to aid Del Monte's StarKist tuna plant there. You can find all the details in our Nov. 26 Ask FactCheck item (http://www.factcheck.org/askfactcheck/did_nancy_pelosi_get_wage_breaks_and.html).

Disinformation works

We wish we could say that all this disinformation is harmless, but there's evidence that a lot of people end up believing such nonsense.

In a FactCheck.org "Special Report" that we posted on Dec. 12, titled "Our Disinformed Electorate," we released some findings from a post-election poll taken by the National Annenberg Election Survey. It showed that millions of voters were bamboozled by false claims made by both sides in the 2008 presidential campaign.

More than half of those polled thought Obama's tax plan would raise taxes on most small businesses (a false claim made by Sen. John McCain) and more than two in five (42.3 percent) found truth in Obama's false claim that McCain planned to cut Medicare benefits.

Nevertheless, we'll keep blowing the whistle whenever we find political spin. Watch our Ask FactCheck space on the home page (www.factcheck.org) for items we'll soon be posting on claims that the EPA is proposing a pollution tax on cows and pigs (false) and a widely circulated e-mail quoting a law school professor giving "unreported stats" from the 2008 election. (The professor denies authorship, and the "statistics" are all wrong.)

And keep checking back in 2009. Because the spin never stops.

The Annenberg Political Fact Check is a project of the Annenberg Public Policy Center of the University of Pennsylvania. It is a nonpartisan, nonprofit "consumer advocate" for voters that aims to reduce the level of deception and confusion in U.S. politics.

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