Congressman Artur Davis introduced H.R. 4340, the “Main Street Survival Act” yesterday. This legislation would establish a $1 billion revolving loan fund administered by the Treasury Department and seeded with left over dividends from the TARP program. The funds would be available to small and midsized businesses struggling to obtain credit. Davis issued the following statement:
“As the House adjourns for the year, not nearly enough has been done to protect jobs in the midst of the highest unemployment in 26 years. While I voted today for a bill that will extend unemployment benefits and health insurance for laid off workers, it is not sufficient to expand the safety net—we need to save jobs and we need to acknowledge that the same banks who received vast government assistance are still not lending to small and midsized businesses. If this revolving loan fund had been in place last summer, Meadowcraft in Selma might have survived and New Era Cap Co. in Demopolis might have a lifeline.
“I recognize that some of my colleagues prefer to use leftover TARP money as a rainy day fund for big banks. In my opinion, that would only spur banks to resume the careless lending and investment practices that almost wrecked our economy. Some argue that the funds should be used for deficit reduction, a much more worthy idea. But the reality is that a significant chunk of the TARP dividends should be devoted to the purpose that TARP was meant to serve—the survival of deserving businesses who are in danger of shutting their doors and the protection of jobs.”
Eligibility will be limited to businesses who:
employ less than 1000 workers
current financial condition makes it likely that they will have to make layoffs
can demonstrate an ability to repay the loan.
Funds can be used to finance operations costs, but not to expand operations.
Keith Olbermann ought to pick this one up for a Worst Persons segment. Wells Fargo & Co. forced Plantation Patterns parent company Meadowcraft, Inc. into bankruptcy last March. Today, they auctioned off Meadowcraft's assets, including the Plantation Patterns plant in Wadley, Alabama that employs 500 people in this town of 650. No word yet on whether they found a bidder for the Wadley plant.
Here's the real craziness: The current management wants to buy the Wadley plant -- Plantation Patterns is a viable business with customers, orders, etc. -- but they can't get credit from Wells Fargo & Co. This is the same Wells Fargo & Co. who received $25 billion in taxpayer bailout money last fall. And the same Wells Fargo & Co. whose Chairman received $23 million in compensation for 2007 and whose CEO received $12.5 million that year. Also, as Democratic candidate for State Treasurer Jeremy Sherer points out, it's the same Wells Fargo & Co. which holds deposits from the State of Alabama totalling roughly $40 million.
“The State of Alabama has approximately $40 million deposited within Wachovia/Wells Fargo. I do not believe that Wachovia/Wells Fargo’s treatment of Meadowcraft, and the families and communities associated with it, exemplifies the kind of civic virtue that our State and its taxpayers should reward to the level that we presently do”, declared Sherer.
But this same Wells Fargo would rather see the Wadley plant auctioned off -- probably closed permanently with the equipment and jobs shipped overseas -- than turn loose of some of that TARP money in a line of credit to a Main Street, American manufacturer. What the heck are they doing with that $25 billion in TARP funds, socking it away for a rainy day? News flash: If you live in or near Wadley, Alabama, today is one heck of a rainy day.
Without credit, Meadowcraft, Inc. which employs 600 people in Wadley and 800 people in Selma will go under tomorrow, for the last time. They're facing liquidation, closing the plants, probably forever. Two Alabama communities already struggling with high unemployment and poverty rates will be further devastated. Stuart Appelbaum is president of the 100,000-member Retail, Wholesale Department Store Union, UFCW that represents some Meadowcraft employees. He made these remarks at a Rally to Save Meadowcraft Jobs in Roanoke, Alabama this morning.
The other day, when I looked at the list of all the leaders who’ve endorsed this program, it occurred me that some people may be scratching their heads trying to figure out whether this is a Democratic protest, or a Republican protest, or an Independent protest. Well, I think the answer to that is “all of the above.”Because destroying the jobs of Alabama workers isn’t a matter of left and right. It’s a question of right and wrong. That’s why we’re today.
We’re here because we believe it is wrong -- morally wrong -- for Wells Fargo to turn its back on Meadowcraft and the men and women who work there. We’re here because we believe it’s wrong -- morally wrong -- for a bank that received $25 billion tax dollars last year, to take food off the tables of Alabama families this year. And we’re here because we know that it’s wrong to rob the employees and managers of Meadowcraft of the opportunity they deserve to turn their company around!
At a time when 15 million Americans are out of work -- including more than 215,000 Alabamians -- it’s up to business and labor to work together and do whatever it takes to protect good jobs and to create new ones.
As president of the RWDSU I can tell you that we are always ready to do our part to help employers compete and win.And, you know something? I’m convinced that a lot of employers are willing to roll up their sleeves and work with unions, too. But, at the end of the day, it doesn’t matter if we do our part if corporations like Wells Fargo refuse to do theirs.
That’s why our message to Wells Fargo is that it’s not too late -- there’s still time for you to choose to do the right thing. There's still time for you to save Meadowcraft.
Our message to Wells Fargo is that when your earnings are up 47 percent over a year ago there's no excuse for you not to save Meadowcraft!
Brothers and sisters, our message to Wells Fargo is that just as the American taxpayer gave you a second chance last year, it’s your responsibility to give Alabama workers a second chance this year!
Applebaum gets it exactly right. This isn't a partisan issue -- it's a moral issue that pits American workers against corporate profits. In this case, the profits of a corporation who got a $25 billion dollar bailout from the taxpayer and now won't lend that money out to a manufacturer. Meadowcraft isn't looking for a handout, they just need a line of credit.
Everyone tells us the economy is bad and credit is tight, but the economic crisis is personal for thirteen hundred people in Central Alabama. Plantation Patterns, a subsidiary of Meadowcraft, Inc. with plants in Wadley and Selma has been in bankruptcy since March 20 and may permanently close their doors on Friday. In Wadley, the company employs about 500 people making wrought iron furniture in a town with a population of less than 650. There is no other industry in town and Mayor Jim Dabbs says the loss of Meadowcraft jobs would devastate Wadley.
"Other than Meadowcraft, we have a couple of restaurants, gas stations and Southern Union Community College."
Making matters even worse, Meadowcraft owes the city of Wadley around $168,000 in unpaid utility bills. In addition to the Wadley plant, Meadowcraft also employs approximately 800 people at a plant in Selma, Alabama where they make soft goods such as cushions and umbrellas. Over 20% of people in Randolph County (where Wadley is located) live below the poverty level. For Dallas County (home to Selma) the figure is 30%.
Meadowcraft's problem isn't slow sales. Nope. The company has orders for furniture. What they lack is cash. Unfortunately, Jerry Camp, former president, and Larry Maynor, chief financial officer, were dismissed last March in the wake of "accounting irregularities," leaving the company with unpaid bills and a shortage of cash. As in, struggling to meet payroll and unable to pay creditors -- some of whom forced Meadowcraft into involuntary bankruptcy.
Meadowcraft has orders. They have equipment. They have workers. There's no question this is a viable business. The problem is they can't get credit to continue operating until the current management can purchase the business.
And who can't they get credit from? Wells Fargo/Wachovia -- who accepted $25 billion in federal Troubled Asset Relief Program (TARP) money just a few months ago. I don't know how much Meadowcraft needs, but I'll bet Wells Fargo Chairman's 2007 compensation of $22,874,952 would make a healthy dent in it.
I heard about the plight of Wadley from Democratic congressional candidate Josh Segall, who also told me there will be a Rally to Save Meadowcraft Jobs Thursday morning at 9 am in Roanoke. If anyone is in the neighborhood with a camera, please send pictures. Details of the rally are at the end of this post.
According to World Bank estimates, the global economic crisis will cause an additional 22 children to die per hour, throughout all of 2009.
And that’s the best-case scenario. The World Bank says it’s possible the toll will be twice that: an additional 400,000 child deaths, or an extra child dying every 79 seconds.
“In London, Washington and Paris, people talk of bonuses or no bonuses,” Robert Zoellick, the World Bank president, said this week. “In parts of Africa, South Asia and Latin America, the struggle is for food or no food.”
Please, please read the whole article!
How could even a little of the bailout money make an impact? Just the crumbs from the bankers' tables interest on the money could save lives.
I don't want to hear another word about how the federal government never does anything for Alabama. We're a welfare state, getting back $1.63 for every dollar in federal tax. Most of the former Confederate states are welfare states. Maybe it has to do with missing out on any economic development in the late nineteenth century -- we got something called Reconstruction and crushing poverty instead. Gov. Bob Riley can tout his principled stand against federal stimulus funds all he wants, but the money is coming to Alabama and -- big surprise! -- Riley is not turning it down.
Concrete paving interests are fighting with the traditional asphalt pavers over about $70 million of Obama Stimulus road money -- the first installment of more than half a billion headed to Alabama.
Food stamp benefits will increase in April, thanks to stimulus money. According to a Moody's study, "the fastest way to infuse money into the economy is through expanding the food-stamp program. For every dollar spent on that program $1.73 is generated throughout the economy, [economist Mark Zandi] said." Very stimulating!
Alabama has a website dedicated to the Economic Recovery Act (Stimulus) where you can get general information on the impact of the federal stimulus money.
The stimulus package isn't the whole story -- Alabama's Colonial Bancgroup is getting a share of the Wall Street Bailout money, another half billion $$:
The bank, which has about $26 billion in assets, must raise $300 million to qualify for $550 million of funds from the Treasury's Troubled Asset Relief Program.
And don't forget Jefferson County. Bob Riley is appealing to the feds to stretch out payments on those bad sewer debts. He also has some home-grown options to deal with the sewer mess. I'm no investment guru, but this reminds me of a shell game.
"The bottom line is, the financial world has no faith in Jefferson County. That's why we have to try to put this authority in place," he said. The bills would create a new brand name for bonds backed by Jefferson County taxes and sewer system revenues.
Same county, same sewer, same debt, new name = new investors. There's one born every minute, I reckon.
I am outraged over this news about TARP funds getting recycled as political contributions!!
Campaign dollars to members of Congress from banks and firms that have received billions via TARP? Are you kidding me?? And this is a bipartisan free for all, with Dems (House Majority Leader Steny Hoyer) and Repubs (House GOP Whip Eric Cantor) both padding their campaigns!
It gets worse...from the article:
House Democratic fundraisers have quietly passed the word that the party's campaign committee will resume accepting them—but down the road, not right now. Said one fundraiser, who also requested anonymity, "These are treacherous waters."
There's no link to the above statement, only the one anonymous quote, but should the Demo campaign committee "resume" accepting them, SHAME ON THEM!
Amid our usual diet of PACT, typos, and TroyBoy, did anyone catch this?
At least 13 firms receiving billions of dollars in bailout money owe a total of more than $220 million in unpaid federal taxes, a key lawmaker said Thursday.
Banks and other firms receiving federal money were required to sign contracts stating they had no unpaid taxes, Lewis said. But he said the Treasury Department did not ask them to turn over their tax records.
Neil Barofsky, special inspector general for the Troubled Asset Relief Program, told the hearing that if an executive signed a contract knowing that information about unpaid taxes was false, "that would potentially be a crime." He said his office will look to see if crimes were committed.
Potentially be a crime? If you lie on a legal document, isn't it perjury?
Good Lord, we turn around for a few days, tending to our Alabama stuff, and look what boils up out of Wall Street! The scumbaggery knows no bounds.
Congress is at least paying some attention. Artur Davis is introducing a new bill:
Under Congressman Davis’ bill, the IRS would be required to independently certify that any company seeking federal assistance is completely current on its federal taxes, with no outstanding liens or other unpaid tax liabilities.
“Since 13 companies apparently misrepresented their status with the IRS, it is time to stop trusting these institutions to tell the truth and demand that the IRS verify whether institutions receiving TARP funds are up to date on their taxes,” said Congressman Davis.
Davis pointed out, “If a businessman in Alabama is behind on his taxes, he will be rejected for a small business loan. How can we have a lower standard for multimillion dollar banks who can’t be bothered to pay their taxes?”
Now, it should not require a special bill in Congress to get the law enforced, should it? But in all fairness, there is so much scumbaggery about that the IRS is probably a bit distracted now. I guess this bill will at least draw thier attention to this particular stench, out of all the putrid reek that federal skeleton crew of regulators and enforcers must deal with.
Congressman Davis should not have to do this, but he's doing what needs to be done.
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I've taken some time this a.m. to watch the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises hearing on AIG's impact on the global economy.
On that Subcommittee is Alabama's own Spencer Bachus. In his opening statement Spencer gave us these pearls of wisdom regarding AIG and the various debacles at which it's at the heart:
"The failure to regulate; the failure of oversight by the Congress. We're to blame."
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"The government has got to get more involved [in regulating companies like AIG]..."
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Where to begin?
Well, I'm glad that Mr. Bachus understands, that he finally "gets" that a "failure to regulate [Wall Street]" has lead to this. And I'm happy that he accepts, as a Member of Congress, his share of the blame for failing in his regulatory (or, better put, failing to craft and support solid, regulatory legislation) and oversight responsibilities. And I am pleasantly shocked that Mr. Bachus now says that the "goverment has to get more involved."
But, thing is, it's been Spencer Bachus and his Right Wing ilk that has for that past 2, 3 decades recited ad nauseum their sacred and talismanic mantra: "Let the market work."
Well, Spencer, the market's not only "worked", it's worked us over, no thanks to you and your lifetime aversion to solid, responsible regulation and oversight of Wall Street.
Here's what Spencer Bachus said in the summer of 2007 -- taking us Progressives to school regarding Wall Street regulation and oversight:
"Meanwhile, the House Financial Services Committee held a hearing the same day in which the President's [read: W. Bush's] Working Group on Capital Markets reported on hedge funds and their systemic risks. Committee Chairman Spencer Bachus (R-Alabama), noted in his opening speech that earlier this year 'the PWG endorsed an approach to hedge-fund regulation that relies primarily on market pressures and incentives to contain risk. The PWG concluded--correctly, in my view--that market discipline, together with statutory limitations restricting access to hedge funds to wealthy investors, can sufficiently mitigate industry risks. By emphasizing the importance of free market forces rather than the heavy hand of excessive government regulation, I believe that the PWG has struck the right balance in regulating the activities of these highly innovative investment vehicles.'"
Postscript -- Spencer doesn't want to "play the blame game", by the way. I bet he doesn't. If I ever again get pulled-over for speeding, I'm thinking I should tell the officer that he should let me go on my way and not to "play the blame game". That Congressman Bachus said so.
Did anyone else notice that Shelby is now a bank-failure hawk?
Apparently he went on the Sabbath Gas-bag shows and spouted off as follows:
"Close them down, get them out of business," Shelby, the senior Republican on the Senate Banking Committee, said on the ABC television program "This Week With George Stephanopoulos." "If they're dead, they ought to be buried."
While the Alabama senator did not say which banks should shut down, he suggested that Citigroup might be on that list, saying the bank has "always been a problem child."
So one of the richest men in the Senate (and the richest in campaign cash) is now happy to let the biggest banks in the country fail. Obviously he is sitting pretty, no doubt with accounts in the Caymans and Switzerland. But he is usually a reliable stooge for organized capital.
I wonder if this means that the Wall Street Posse has completed thier looting, so now the institutions can collapse and take pensions, insurance companies, pre-paid college tuition plans, and mutual funds with them. Because only the little people need those.
When countrycat and I sat down with Congressman Artur Davis last week, there was no doubt that we had to ask him why he voted against a government bridge loan guarantee for the Big 3 US automakers last December. That vote has been a sore point for many at this blog and many more GM, Ford and Chrysler "families" across Alabama. Video and transcript follow.
"I really wrestled with the bridge loan vote. The reason I voted against it in short was because I was so frustrated with how the first bailout was working, and still am. The first bailout, which I voted for, the Treasury Secretary came in and changed on a dime the purpose of the first bailout.
To this day no one can tell you what banks are eligible and which ones aren't. Banks that did a lot of low income lending in some cases are turned away because they're told they have too high a debt to capitol ratio. Some of us thought we were voting for the TARP plan to buy up bad debt to help banks ease their debt to capitol ratio . Now we hear that that's a disqualifying factor for banks? Bank of America spends $5 million on a Super Bowl party? And apparently some of it may be TARP money? Those things were known, or things like that were known and obvious back in December.
I was very concerned with the first baiout being administered as poorly as it was that the Bush administration was not going to administer an automobile loan bailout any better. I have a lot more confidence in how the Obama administration would handle these issues and I'll wait and see what they put on the table. I'll wait and see if the auto industry meets the demands that were accepted in exchange for getting the first loan. There were sticks put in place that say you won't get more if you don't do this. I can't wait to see those measurements
It was a very, very hard vote. I'm not where Senator Shelby is. I don't believe it's a good thing for Alabama if the domestic automobile industry collapses. I'm not where Bob Corker is. I disagree with that. A lot of people may not realize that Hyundai and Mercedes lobbied for the bridge bailout They don't view the collapse of the domestic industry as a good thing because they know their supplier chain is shared with the domestic industry
So I don't want to see the domestic industry die but I'm so frustrated with the way we've structured bailouts that I've got to see the next bailout have a tighter structure and a better structure, and you'll notice 2 weeks ago I voted against a reauthorization of TARP. Now it didn't matter if the Senate went a different place but I voted against reauthorizing TARP too, because of my concerns with how the bailout is being administered."
Q: Are your concerns being addressed?
"Well, we'll find out more next week, when the Obama administration announces how it plans to manage TARP, but I'm very hopeful it will be."
The Fighting Elephants began their campaign to regain the Republican majority by sending out a press release positively savaging several freshmen Democrats for voting to release the remaining $350 million of the TARP funds.
Here's an excerpt from one of them:
Washington- In a brazen act of sheer cowardice, Rep. Parker Griffith (D-AL) broke one of his biggest campaign promises only weeks after being sworn into Congress. In Washington today, Congress voted on releasing the remaining $350 billion from the Troubled Assets Relief Program, paving the way for the second part of the financial bailout to be handed out.
Unfortunately for our elephantine friends, they did this yesterday. And the House didn't vote on the TARP funds until today.
You can probably guess the rest of the story.
Well, as it turns out, every Democrat the NRCC targeted with their release voted for the "TARP disapproval" bill, blocking the release of the second $350 million.
Made a liar out of the NRCC, yes they did, which is no very difficult feat. Parker Griffith (D, AL-05) did not "break one of his biggest campaign promises." Here's a statement from his office on the TARP vote:
Yesterday we had an opportunity to block the release of the second $350 billion. I voted to prevent the release of this money. When this motion unfortunately failed, I voted for controls, accountability and transparency.
...
Again this afternoon, I voted to prevent the release of the $350 billion. I will continue to work for much-needed oversight because I believe the people of the Fifth District are best served by a thoughtful process that yields accountability and transparency with the use of their money.
The NRCC needs to spend a little more time checking their facts before they hit send on those nifty little attack messages, 'cause there are plenty of us out here with the google doing our own fact checking.
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Everyone tells us the economy is bad and credit is tight, but the economic crisis is personal for 
