A quick OT via Naked Capitalism. 4 Citi execs made $2.2 million as a result of buying Citi stock before CEO Pandit’s announcement that Citi had been profitable (whatever that means given that we are talking about the hopelessly bankrupt bank). Our banking system is being run by crooks.

http://www.bloomberg.com/apps/…..refer=home

There used to be a big SLMA loan-processing center in Wilkes-Barre, employing over 2,000 people. May still be.

It is not just that Democrats can be bought. The real surprise is how cheap it is to do.

Our political, media, and financial elites simply will engage in business as usual, even in the face of depression, until they are swept away, fired, thrown out of office, or put in jail.

Here we go. Not so big as I recall, but still a major employment center.

Sallie Mae has had a presence in Wilkes-Barre for 19 years. Sallie Mae’s loan servicing center in Wilkes-Barre, Pa., is one of our largest facilities, employing more than 900 Pennsylvania residents. In addition, it is Pennsylvania’s largest back-office operation in Luzerne County and the fourth-largest in northeastern Pennsylvania. Employees at this center, for the most part, perform back-office services for student loan borrowers, including correspondence processing, monetary processing, claims processing, document capture, records research, and financial services. We also have a phone group which handles in bound phone calls for tuition answer loans and private consolidation loans. Sallie Mae employees in Pennsylvania process 2.5 million student loan payments per month and handle more than 14.5 million pieces of correspondence and record updates annually.

and just to cheer us up a bit more, big banks did not pay their FDIC premiums for 10 years, aided and abetted by our congresscritters.

http://www.dailykos.com/story/…..483/707343

imagine if you don’t pay your health insurance premium claiming that ‘i’m healthy, so i won’t pay.”

so, mr. kanjorski, why do you call yourself a democrat? how about wingnut-lite? that fits you better.

Rep. Paul Kanjorski (D-Pa.), who with $18,000 in contributions had the second-highest fundraising total from the private student loan industry, also opposes Obama’s plan to have the federal government provide loans to students. He said the best way to provide aid to students would be to find a balance between public and private lending.

This is Corporate Welfare Is Pork for the Banks where is John McCain?

Sallie May and Nelnet are the big student loan outfits, and also big campaign donors. Sallie Mae alone distributed more than $583,000 to politicians last year. They’ve got astroturf groups releasing studies saying that 35,000 jobs would be lost if the subsidies were ended, but there’s no indication why they couldn’t continue to make the loans themselves and simply absorb the losses without the corporate welfare. What exactly do they do for their $4 billion a year?

Redecorate their offices?, Give themselves a Bonus? Lobby Congress? Donate to the GOP?

From Wiki:

He was unopposed in 1988 and 1990 and didn’t face another credible opponent until 2002, when he faced Hazleton Mayor Lou Barletta. At the time, Kanjorski was under federal investigation for improperly using his influence to funnel millions of dollars in federal funds into companies owned by his family.

and

Kanjorski has been critized in the past for using tax dollars for his own profit.

http://en.wikipedia.org/wiki/Paul_E._Kanjorski

I live in Kanjorski’s district. All of a sudden I have been getting emails from him. Last week he had an open phone town hall. I think he hears the patter of feet behind him. His republican opponent was the mayor of Hazelton – a one issue(Illegal aliens)nut. Kanjorski has been in office a long time. Other scandal type issues crop up from time to time. Perhaps it is time for a primary.

OT – Just out from NYT’s LINK

Congresswoman With Ties to Bank Helped Seek Funds

By ERIC LIPTON and JIM RUTENBERG
Published: March 12, 2009

WASHINGTON — Top banking regulators were taken aback late last year when a California congresswoman helped set up a meeting in which the chief executive of a bank with financial ties to her family asked them for up to $50 million in special bailout funds, Treasury officials said.

Representative Maxine Waters, Democrat of California, requested the September meeting on behalf of executives at OneUnited, one of the nation’s largest black-owned banks. Ms. Water’s husband, Sidney Williams, had served on the bank’s board of directors until early last year and has owned at least $250,000 in stock in the institution. Treasury officials said the session with nearly a dozen senior banking regulators had been intended to allow minority-owned banks and their trade association to discuss the losses they had incurred from the federal takeover of Fannie Mae and Freddie Mac. But Kevin Cohee, OneUnited’s chief executive, instead seized the opportunity to plead for special assistance for his bank, federal officials said.

…

As with Social Security, government administered student loans would be more efficient and far less costly than having the banks act as profit-making intermediaries.

The loans are a social investment in future talent that has not yet proven itself credit-worthy in strict financial terms. Hence, they are not financial investments that banks make without a government guarantee. Which means the government taking this business back is not a lost opportunity for banks, it’s an artificial one that needlessly channels more scarce public funds to private hands. That yields fewer loans to students and needlessly less effective social lending.

Government would administer the loans without needing to collect a profit. And it would retain the same heavy collections hammers it has now, but with the proviso that, unlike now, their use would be subject to uniform laws. All in, a strong case for doing away with the artificial market created by funneling these loans through banks.

Republican Buck McKeon of the House Education and Labor Committee sits at Kanjorski’s side, saying that private lending firms provide a “critical backstop” for the pubic lending program, and provide students with “more choices.” Some choices:

Higher prices are a choice so is wasting 4 Billion that could be used to send more kids to college!

Can we get anyone to run against him as a Dem?

The 4 billion can go to company bonuses! They need to know they are loved!

Buy a puppy

This is the way things work. Public works contractors contribute to politicians once they win the bid to build the road. It’s equally true of everyone who lives off the public teat. You get, but you must give back although it’s not nearly as much as you get. Hugh is right. Surprising how little it takes to buy our boys and girls. The system won’t change by itself.

Using banks as intermediaries in doling out student loans, loans few banks would make without a parent or government guarantor, is like protection money, like Al Capone wanting a piece udda action. The processing could as easily be done by low-paid government clerks as by more lowly paid, outsourced and possibly foreign bank clerks. It’s a cost we can no longer afford, as is going to college without them.

This is the time of year when colleges and universities begin announcing tuition increases for the next year. It will be interesting to see if they decide to hold the line or, more likely, continue hiking tuition costs. My fear is that this could force a lot of students out of school into an awful job market.

Al Lord, Sallie Mae CEO:

During his seven years as chief executive, Sallie cut costs, increased its market share and saw its stock price rise more than twice as fast as the overall market. So you might think that, after taking home more than $225 million in compensation, Al would have gone quietly after his retirement as chief executive in 2005 and channeled his fighting spirit into development of his personal $30 million golf course in Anne Arundel County.

Dude built himself a private thirty million dollar golf course with money from student loans & government guarantees.

As with Social Security, government administered student loans would be more efficient and far less costly than having the banks act as profit-making intermediaries

same story re health insurance. we need a smaller financial industry – one focused on the needs of the real economy and ordinary people and not on lobbying politicians for corporate welfare.

Lets put this in a way the GOP will understand give the banks the student loan business tax payers pay 4 billion more dollars.
Now then we call this banker pork and run adds in McCain’s district:) unless he votes our way!

OT,

LONDON – ‘Officials drafting an intelligence dossier that was used to help justify the 2003 U.S.-led invasion of Iraq discussed worries that Britain risked exaggerating the threat posed by Saddam Hussein’s regime, documents released on Thursday disclosed.

In e-mails published under Freedom of Information laws, officials aired concerns that some parts of a dossier on the threat posed by Iraq’s nuclear, chemical and biological weapons program needed to be watered down.’

http://news.yahoo.com/s/ap/200…..itain_iraq

Well, the Prez talks about transparency, so let’s get this Konjarski palm greasing public NOW!

Keith? Rachel? Chris? Anderson (oh, right, CNN is chasing the Fox audience, no chance…)

Ok thats all I need to hear Banks, Sallie they should get out of the student loan business Government does the job better cheaper!
The GOP and Timmy Geithner ARE WRONG!

Maybe there will be a ‘closer’ look at David Kelly’s ’suicide’ now. I wonder if Darths’ Death Squad were visiting the UK around that time…

All anyone needs to know about the difference between private student lending and direct lending by the federal government is: Medicare Advantage versus Medicare.

Slightly OT: Seems like some Greeks think that CITI is a problem – attack banks
http://news.yahoo.com/s/ap/200…..m_citibank

There is a reason why Americans trust Dems and Obama more on the economy subconsciously they know all about the GOP scandals but before they never had the time to pay attention consciously.
They do now though with a bad economy they make time.

Obama is getting nailed daily by the media and the goopers. They want to get his ratings down to the low fifties, at which point he won’t be able to do health care reform. Strangely, he doesn’t have many in his corner fighting back. He seems to have pissed off both the left and the right.

Would do we start writing to? Both of my daughters are in hock up to their eyeballs in student loans. My oldest will be $140,000 in debt when she gets her post doc degree. Her credit is iffy and the banks are charging her far more because of this. And if she is late the banks can start screwing with the interest rate just like the credit cards.

I have not lived here long enough to know if there is anyone viable. I remember that Howie haas some connections in this area. He would have an idea.

If ya can’t water it down ya gotta sex it up!

The only real way to end this insanity is full public financing of campaigns for federal office. I wonder when that will ever happen?

EW OT Canadian helicopter w/ 18 on board goes down in ocean. One rescued so far. It was heading out to oil Platform
http://rawstory.com/news/afp/C…..22009.html

Do some diaries on the subject keep the pressure. I think kids when they research topics for school are pulling up our diaries. Think of it like cold cereal ads in cartoons parents buy what the kid sells.
Parents who check their kids homework should follow the same pattern.

that kind of thinking will lead you into the circle of despair (also i don’t think it’s true). there are other ways around – for example, absent the big inequalities in wealth, the issue of public financing would not be so critical. i think it really is multifactorial.

but right now, money = power, including political power. there are other kinds of power too but they take organizing. i say this all the time, but women didn’t get the vote by voting. jim crow laws weren’t ended by african americans voting.

I have no problem with giving students a choice of public and private lending. But that is not what we have now. We have a single choice, and it is a bastard: risking public capital for private profit, with less and less to show for it as far as the public interest goes.

If this Kanjorski, this Beelzebooblican in Democratic clothing, really believes in private college financing and if he can get his banking buddies/bosses to put up their SHAREHOLDERS’ capital, then I’m all for it. Private competition will keep the Treasury on its toes.

But I’m betting that the bankers have no intention of lending their own money. So who needs them?

In fact, as several FDL commentators have pointed out, why do we need banks at all, given their now obvious failings? If we the public bear the risk and provide the capital (as it appears we do), then we should cut out the middlemen, make the loans, get things moving again, and earn the interest as well.

Amy Goodman is on top of it, as usual. She had Jesse Jackson on this morning talking about the criminal abuses of the student loan system. It is stunning. Go to Democracy Now! to see the text. This is just as corrupt as senseless as the rest of the banking and credit card scams overwhelming our economy. It costs more to improve your life as Jackson points out, and the resulting burden is impossible, usurious, and corrupt. Loans routinely double on escalating interest rates alone. AND, student loans are not subject to alteration or dismissal in bankruptcy. Even our President, Barack H. Obama, did not pay off his student loans until a couple of years ago!! It is a totally sick system.

This is an interesting article, but it may be one of those more smoke than fire allegations. On Page 2:

Mr. Cohee named Mr. Williams, Ms. Waters’ husband, to the bank’s board. A former professional football player and ambassador to the Bahamas, Mr. Williams was working as a business consultant, pulling in hundreds of thousands of dollars over a several-year period working with some of Ms. Waters’s political allies, according to disclosure forms.

Mr. Williams accepted no compensation from the bank, to avoid any appearance of a conflict, Mr. Cohee said. But as a director, Mr. Williams was required to hold stock. Accordingly, he acquired between $250,000 and $500,000 worth, records show. Mr. Cohee said that Mr. Williams paid for the stock himself, although Ms. Waters and Mr. Cohee would not say how much he paid for the stock. He would not say whether Mr. Williams sold the shares after leaving the board last April. Attempts to reach Mr. Williams through his wife’s office were unsuccessful. He did not return a call left at his Los Angeles office.

What I’m seeing is perhaps some people from the Bush Treasury department, apparently political appointees since they now are free to discuss these issues and thus apparently not there any longer (altho’ they could have resigned…) who may or may not have valid critcisms. But they may also have a political axe to grind and use against a powerful congresswoman.

She asked to set up meeting for more than one black-owned bank; Mr. Cohee apparently used this as an opportunity to make a pitch for assistance for his bank; there is no way to know if Ms. Water knew what Mr. Cohee was going to do at this meeting.

I think this definitely needs more information before Ms. Waters is smeared with the charge of favoritism…for a bank where he husband had been an unpaid director and which position required him to purchase substantial shares of the bank’s stock. It is not known whether he has kept these shares or not — which must be knowable for a publicly traded bank, no?

I’ve had some questions about why the NYTimes has gone after Charlie Rangel in the past year. Now Maxine Waters. Interesting. And more info is needed to determine just what’s going on. But this is sounding right now like those front page stories about scandals which weren’t scandals which appeared during the Dem primary. Remember how concerned the WaPo was about the details of John Edwards’ house sale? And there was something about Hillary, which died a pretty quick death, but the intent was to raise questions about her probity and to suggest corruption (think it was about earmarks for energy conserving real estate development?).

“This is the time of year when colleges and universities begin announcing tuition increases for the next year. It will be interesting to see if they decide to hold the line or, more likely, continue hiking tuition costs. My fear is that this could force a lot of students out of school into an awful job market.”

There is a clear and direct relationship between the increase in the costs of tuition — general higher ed costs to students, and the introduction of student loans and grants during LBJ’s administration — an all government program, and then the privatization of these in the early years of the Nixon Administration. In otherwords one needs to look first at the impact of Pell Grants, Work-Study, et. al., in the mid 60’s, and then the introduction of private but government “guarenteed” programs pushed as private sector “competition” beginning about 1971. Throughout the 70’s and 80’s the inflation in costs of education to students was considerably higher than general inflation, and during these two decades appropriations for the Government Program decreased, increasing general student dependence on the private sector.

In 1991, Ted Kennedy’s committee held hearings around the country — Senator Paul Wellstone took the lead on this, in service to a bill to phase out or way down the relative position of private lending in the financing of Higher Ed. They got part of what they wanted, and indeed many may remember that in 92, Bill Clinton campaigned on what was in essence, a single Government Lender in the Student Loan arena. But when Clinton lost congress in 1994, this was one of the first things that was changed — the Republicans restored the private lenders to the dominant position, and not only did not increase Pell Grant programs commersate with the inflation in college costs, but they disadvantaged the Government program through cutting appropriations. Thus from 1995 till 2007, the private lenders were in the driver’s seat. One of the Democrat’s first bills in 2007, was to reverse fields on this, favoring the direct student loan program. And in fact, once the fees and subsidies were removed from the private programs — many private lenders dropped out of the market. Many more in the last year.

The private programs were nicked up a bit by the discovery of fraud in the private program. Pay-off’s to College Financal aid officers were uncovered by Andrew Cuomo — and he only scratched the surface. Many private lenders tied loans to students to parents being willing to take equity out of their homes via taking on a sub-prime mortgage (student loans and parents mortgages were linked together) — and we all know what is happening to those loans these days. Many lenders made agreements with colleges to be “Featured” in some way — at times through agreements that established monopoly on loans to just one lender, or student credit card deals that kicked back to the institution. Kick-backs also came in the form of leased luxury cars to Presidents and Deans, compliments of the lending companies or student loan brokers. Between 95 and 07 it was also common to ask individual colleges not to participate in the Federal Direct Loan Program, and many did. These kinds of agreements were not around prior to 95 — but they were very common after 95 and till 2007. The point of the various kick-backs to College Administrators was to “buy them in” to the program, and make certain they did not use influence through national associations with DC higher ed. lobbies to take on the terms of the lenders, or the whole corrupt game.

TPM has an article up today showing that overall college endowed scholarships will decrease this year probably by between 25 and 40% with some schools needing to cut their own aid grants by much more, given the decrease in market value and income from endowments. This will put much more pressure on the Direct Student Loan program.

We can’t fix this problem with any sort of silver bullet — the problem dates back to policy decisions on funding Higher Ed that were made in the LBJ and Nixon Administration, and that became partisian matters thereafter. At the same time the whole system became more dependent on both Fed grants and loans, and the games of the private lenders, the state legislatures greatly decreased their share of support for the State Colleges and Universities and the Community College systems.

I dunno. I’m very liberal, but total federal control over the student loan program scares me.

Federal student loans are most schools’ primary revenue source. What will happen when Congress has control. No ROTC..no loans for your students. Don’t like what professors teach..no loans for your students.

The current program has its flaws, to be sure. But having the private sector lenders compete against each other (and the feds) ensure that students and schools receive the best rates and customer service.

And, its worth noting that not all lenders are big corporate banks. Each state has a local nonprofit agency or state agenecy that acts as lender as well and provide alot of free outreach services to increase college access.