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Plain Talk, Straight TalkJoe O'Donoghue

We Can’t Stop Singing

San Francisco in the late ‘50’s and ‘60’s was known not just as a drinking town, but as a Mecca for jazz, dance, and sing-along establishments. The City’s nightlife pulsated everywhere to musical vibrations—vibrations that enervated people to harmonious interactions, much like the Castro Theatre organ-playing did in the ‘70’s and ‘80’s. During this period, bartenders and cocktail waitresses did not want for tips as business was better than brisk.

San Francisco was also then a city whose population was still basking in the aftermath of the country’s WWII successes: the Marshall Plan, the enormity of its population influx, and the vastness of its industrial, financial, and union membership expansion. The City, like the country, was buoyed by a spirit that was truly Promethean, a spirit that was larger than life.


This spirit, infectious and enriching, was transmitted nightly from the keyboards of San Francisco’s many piano bars, piano bars that proliferated in every neighborhood in every city throughout the U.S.

German Jazz players at the Gold DustThis spirit, infectious and enriching, was transmitted nightly from the keyboards of San Francisco’s many piano bars, piano bars that proliferated in every neighborhood in every city throughout the U.S.

Laurel Village, by way of example, had three such bars, the most favored being the Shadow Box. On Broadway in North Beach, the Red Garter, a banjo-based establishment, was packed nightly to capacity, while long lines outside awaited entry. On Powell Street, the Gold Dust Lounge was also popping to familiar songs—it was Mitch Miller time, as every song was sung in unison, some to harmonizing. These songs ranged from George M. Cohan and Al Jolson to the Steven Foster melodies, and the Cal and Stanford fight songs. The patrons, regardless of their backgrounds, schools or home states, were fused to singing as one—unified in a unity of expression. As in the “Sound of Music”, this City then was truly afloat to the “sound of music”—vocalized music.

For me, this spirit of song was the emblem of what symbolized America. It was a feeling that as a 10 year old I experienced in my home town of Limerick. This was despite the fact that our home, like most others, was without a TV, and had only one radio—a radio with a single station, playing only intermittently. Yet, because of that infectious American spirit of great song, when I arrived in L.A. in 1957 at the age of 19, I already could sing many of America’s great songs—those of Nelson Eddy and Jeanette McDonald, as well as the great spirituals of Paul Robeson.Gold Dust

What was clearly an American legacy became an Irish legacy soon after my arrival in L.A. Having encountered a bunch of Limerick immigrants like me, Friday and Saturday nights became an engagement of sing-along in the many piano bars in the Hollywood area.

Today that tradition is still carried on, but in a very limited capacity…usually only after a dinner at a private home. Sadly, over four or five generations, America’s capacity for communal sing-alongs has become lost. One need only compare the singing musical concerts of Andre Rieu in Europe to those held in America; the European venues involve active singing audiences while the American ones are generally passive. Sadly, a tradition which we gave the world is now not only frayed, but to paraphrase Donne, “’tis all in pieces.”

While this very significant part of our heritage has been dying for some years, all is not lost, as the sheer volume of this country’s musical composition, unmatched worldwide, remains. Our potential to revive our singing tradition to its past greatness was demonstrated just last week when a collective outpouring of voices opposed the shutting down of the Gold Dust Lounge. What was unusual is that the opponents were a conflux of people that would ordinarily be rivals in political and personal interests.

Following this, the lawsuit filed by Joe Cotchett is claiming a wrongful eviction, one motivated by greed and deceit. As some of us know, these vices have long been practiced with impunity, unchallenged until now. There is no question that the Bovis brothers, the owners of the Gold Dust Lounge, are victims of greed and deceit, but you could say that the real victims, if this landlord is permitted to proceed unchallenged, will be all San Franciscans, as we would be among the first to actively and consciously allow the elimination of a rich legacy and tradition.

Many people know that I have always viewed preservation with a jaundiced eye. In fact, I sometimes feel that those who buy “a period house” embalm themselves in a graveyard for life. Nevertheless, there are situations that truly demand preservation and this is one of those cases.

The simple reason is that our collective experience has been subsumed to the silence of Facebook interactions.


March 2012

A Belfast Thanksgiving Remembrance

The heavy unusual rainfall of this Thanksgiving eve drummed up in me remembrances of a far more ferocious Thanksgiving eve storm.

It was November 1995, I was in Belfast, in the company of two friends, one American and one Irish, both of whom had just become acquainted with each other. My American friend, Ed Emerson, was a White House liaison, an advance man for President Clinton, with Bay Area connections. My Irish friend, Oliver Kearney, was a well-connected Northern Ireland nationalist. 

At this particular moment, all three of us were huddled in a miniscule alcove, sheltered somewhat from the drenching rains, but not from the wind. We all three had just exited 15 feet from the US State Department offices, where a Thanksgiving eve party for 50 or more state department employees was in full swing. We had left the party for purposes of a very private dialogue.

Belfast at this time was enjoying, due to peace negotiations, a lull in the armed conflict. However, peace talks at the table had stalled and movement forward was stymied. The dialogue between Oliver and Ed — that of some disarming of the IRA — was verboten at the formal negotiations; hence our unofficial sidebar discussion in the doorway. Not unexpected, the verbal reaction from Oliver was so hot that it fused steam out of the cold wind and rain, for this proposal was viewed as one of total surrender. Nevertheless, Oliver, being a practical man with a desire toward peace, agreed to bring the proposal — unofficially — forward. For us, this was progress; a beachhead had been established. 

Discussions between Oliver and me continued during that night, and we decided to open up another new front — one that would have an economic impact on those Northern Ireland businesses guilty of discriminating against Catholics. The goal was to reform, not destroy, those industries.

So, upon returning to San Francisco, armed with data compiled by Oliver Kearney about Northern Ireland's industries and their discrimination policies, we consulted Warren Hinckle, our guru genius. Warren's creative plan was to pour the nectar of Northern Ireland's flagship export, Bushmills, down the drain in front of Gino and Carlo's, an Italian bar, with the honors to be executed by Willie Brown, a black man. This irony would not be lost on Europeans. And in fact, the TV media coverage of this event in Europe exceeded our expectations. 

So for me, this Thanksgiving was a memory of fulfillment of turkey feathers flying and how a few of us shone more light on how shocking Northern Ireland's hiring practices were at that time.


December 2011


DCCC and Other Underhanded Machinations

About a year and a half ago, infirmities of the kind associated with old age suckered my well-being to an array of sleepless nights and an inability to focus or concentrate consistently. Not surprisingly, this unexpected upheaval of my daily routine necessitated a hiatus from my social, political and business activities.

But, as would be expected, I did not "into the night" go quietly. Instead, inspired by "CON CEAD CATHA" ("Con of the Hundred Battles"), an Irish legendary figure, I, like him, fought back with vigor. Consequently, thanks to modern medicine and an excellent physician at Kaiser, Dr. Chinn, coupled with work-outs at the Jewish Community Center, cannabis and acupuncture, my unwelcome visitors for now have departed. And my old vigor — no pun intended — has returned.

To say the least, it's great not only to be back, but to be back in full-mind battle gear…which leads me to ask, what gives with some of our Mayoral candidates? To paraphrase the comments of one political observer, "Never have I seen such a bunch of narcissist cry-babies and whiners". Prudence and political savvy should have dictated that all the Mayoral hopefuls welcome Ed Lee in the Mayoral arena before they began their ersatz kick boxing charades.

Meantime, the DCCC committed a major political faux pas when they chose not to endorse, from a field of 5 qualified Asian candidates, even one. What made their actions more repugnant was they had three clear chances to name one Asian. This insult showed an arrogant disdain for Asian American aspirations, and made their endorsement process a farce.

As we know, Aaron Peskin is an exceptionally talented political operative – a Machiavellian who, when he was Board President, displayed remarkable legislative skills. He was, when then exercising power, on par with Willie Brown. And by my reckoning he should have cast into the Mayoral ring his hat. For by any measure of comparison, he was by far the best qualified to lead the progressive ticket. However, for whatever reasons, he chose not to, and instead opted to remain head of the DCCC, an organization which has a checkered past when it comes to treatment of people of color, or immigrants, like me; an organization that is presently seen as ideologically moribund, white dominated, and elitist; an organization whose aphrodisiac is power and control. So, I'm shocked that Aaron would allow himself to be trapped in this quagmire of racial divide by a group of neophytes.

But, in their action of no endorsement of an Asian candidate, the DCCC was merely carrying out a legacy that was bequeathed to them by the anti-immigration Alien and Sedition Acts of 1798. Spurred out of fear, this Act of 1798 was devised so that the WASPs could retain their power and control, as they feared that the refuse of Europe, which included the Wild Irish, would take over. So, within the Sedition Acts, political exclusion became the elixir that ensured hegemony of power and control for elitist groups. And this elixir of exclusion, which was first used against successive waves of European immigrants, was soon embraced by these very same groups once their situation was secure. And today, we see these exclusionary practices used by the White European descendants against people of color.

While the DCCC controlling group denies that racism was the basis for failing to endorse an Asian Mayoral candidate, the fact is that it played a part. And today, we see the impact of similar underhanded machinations across this country. For instance, the fact that Republican state legislatures have passed voting restrictions in Alabama, Minnesota, Missouri and nine other states which negatively impact primarily African Americans, is a display of raw exclusionary politics. Unfortunately, the actions of the DCCC are on par with these same restrictions; at best it is "institutional racism." This is defined as an outcome that negatively impacts a minority group, even if the intent was not racist. In this instance, considering that 5 of the 11 Mayoral candidates are Asian, the proposition that the DCCC is guilty of institutional racism is a legal reality. The position that the DCCC advances — that they have endorsed Asians for Supervisor and other elected offices — is flawed, as the endorsement of even three Asian Supervisors is nothing compared to the power that resides with the Mayor. Moreover, the DCCC's endorsement of Avalos, an Hispanic candidate, does not dilute the institutional racism argument, as that endorsement was merely an empty gesture; in a field of even two candidates, Avalos is unelectable.

Personally, I intend to vote for Mayor Ed Lee and Tony Hall, as Tony has shown the courage and independence of mind, and has the testosterone to stand up to the bully puppeteers who control San Francisco's politics. As for the third choice, that spot is still open.


September 2011


Full Employment for Rasputins, Puppets & All Their Apparatchiks

For those of you hoping to see financial relief on the horizon due to the Financial Reform underway in Washington, forget it. This reform package will not ease up on present credit constrictions in play nor will it facilitate easier access to borrowing. This reform package is strictly a triple play that pits big banks, small banks and Wall Street firms against each other. However, rest assured that when the smoke clears and the dust settles, you and I, and the rest of middle class America will be straddled with new synthetic fees and charges for these changes.

Let us not forget the inevitable Value Added Tax (VAT) proposals that are already looming in the shadows. These new taxes come courtesy of the Derivative Manipulators who, by purveying their “financial instruments of mass destruction,” ubiquitously careened this country into financial ruin and chaos. Ironically, these carnivores held their annual International Derivative Convention here in San Francisco last week. We are told that the mantra of these carnivores, as they indulged themselves at the Supper Club, was “you slaves pay, so that we, the new Rasputins, can play,” and play they did. According to a NY Times report, these Rasputins, at the Supper Club, experienced new sensory palpitations—palpitations that allowed some, “while plopped on beds that covered the floor,” to be served, “scarf delivered” drinks by waiters in “denim short shorts,” while others of them retired to the S&M chamber to indulge, no doubt, in newly derivative sexual fantasies.

Now, while these derivative Rasputins of sexual perversities were getting it on through bodily secretions, compliments of taxpayer subsidies and government bureaucratic bailouts, apparatchiks at the State level in San Francisco were citing the manufacturers of rice noodles for not keeping their noodles refrigerated at 41 degrees or less. And so vigorous and relentless was the pursuit of these apparatchiks that they resorted to the ultimate decision—to close a manufacturing business resulting in the layoff of nine long-term Chinese workers.

“To do otherwise, such as refrigerating them, would make the noodles “yucky,” and hence unpalatable. So, this custom, which existed for over 5,000 years, was suddenly halted, by some process-oriented bureaucrat who insisted upon enforcing a rule of refrigerating rice noodles at 41 degrees or less. “

Now, one should know that never having cooked a meal in my life, I would not recognize—except those of the human kind—one noodle from another. But apparently, for over 5,000 years, rice noodles have been a very popular mainstay of Asian culture. Manufactured through blending a mixture of water, rice and flour, they are rolled and then cut into a variety of different widths, after which they are then kept at room temperature. To do otherwise, such as refrigerating them, would make the noodles “yucky,” and hence unpalatable. So, this custom, which existed for over 5,000 years, was suddenly halted, by some process-oriented bureaucrat who insisted upon enforcing a rule of refrigerating rice noodles at 41 degrees or less. No-one, incidentally, checked to see whether this regulation was a fixture from the anti-Chinese Dennis Kearny years.

My friend Joe Cassidy recently informed me of an incident where another government apparatchik—this time from the Department of the Environment—went into action. Apparently, a government compliance officer visited a construction framing work-site and upon noticing a carpenter with a skill saw cutting some 2 by 4s, immediately ordered a cease and desist from further cutting endeavors. Insisting that the sawdust particles were evolving into the air and the sky, the carpenter was informed that he needed to put an “air-catching particle bag” around the saw, which—as everyone knows —is an impossibility. Needless to say, this compliance bureaucrat was told—in a not very compliant fashion—where to put the air bag.

Another group you may encounter is from the Public Health department where compliance officers are now assigned to inspect garbage. Their job? To see whether you have any ants, cockroaches, rodents, or snails. Apparently, Dr. Mitch Katz must feel that property owners, or their tenants, are going to tolerate vermin and pests swarming around their households. Talk again about featherbedding and unnecessary costs —well, what the heck, it’s only money. Your money.

Finally, a note on why Mayor Newsom is running for Lt. Governor. It’s an obvious move by the powerful Democratic Party leadership who want compliance and not independence from a Democratic governor. And, compliance, if anything, is adverse to Jerry Brown’s personality. So, Newsom is the natural puppet. Although Newsom—contrary to political spins—is hardly a shoe-in, his loyal contributors will be angered when, should he be elected Lt. Governor, this City sets off a nuclear blast creating volatile policy and budget changes clearly antithetical to their interests. Who’s laughing now?

We share these short stories with you to bring awareness to the unnecessary ballooning of costly government employees whose functions are not only unnecessary, but also give rise to featherbedding. Unfortunately, we see these employees multiplying like locusts, and like locusts, they leave devastation in their path wherever they settle—not only does this raise the cost of doing business, it also forces many businesses to shut down completely.

Joe O’Donoghue is a longtime political combatant, former President of the Residential Builders Association (RBA) and acting President of the newly formed Condominium Owners, Builders, Remodelers Assn. (COBRA) Feedback:


The Little Guy Gets It Again

After a 34 year Rip Van Winkle slumber, it was good to see the Building Trade Unions demonstrate at City Hall a couple of weeks ago for advancement of union developer interests – interests which benefit from proposed deferred permit fees and a reduction in the inclusionary housing requirements, among other singularities. Riding the momentum of major successes at the federal level and striking while the poker is still hot, these big developer interests, such as Lenar, decided to demand local level benefits that would complIment those recent monetary windfalls gained at the federal level – windfalls estimated at $2.5 Billion. By pushing through amendments to the US tax code, big developers are now allowed to recoup, through amended returns, taxes paid during their profitable years -- going back 5 years-- by offsetting losses. And these stimulus refunds, complements of the Obama administration and Speaker Nancy Pelosi, ensures better structured balance sheets for these developer interests, enabling them to acquire easier financing.

Meantime, for the small business owner or small developer, no such special treatments exist as they are still cut off from any credit lines or loans despite excellent credit scores. All the little guy receives is the usual political platitudes which amount to nothing.

Furthermore, when it comes to the small developers, the proposals, which not surprisingly are promoted by Mayor Gavin Newsom, are much akin to the Chamber of Commerce workforce housing proposals of several years ago…a Trojan Horse. For the small builder, deferred fees merely postpone the inevitability of payment and, as such, the amounts are calculated by the lending institutions into the debt equity ratios of projects. It’s a pity the “Gav”, who is carrying the water pail of this legislation for the big developers, did not propose a reduction in the outrageous, inflated planning, building, fire and public utility permit fees — fees that are proving to be project killers for the little guy. And as to the proposed reductions in inclusionary housing requirements, what’s ignored is that this is San Francisco, so don’t expect the buyers of condos from small builders to go quietly into the night and agree to subsidize builder obligations. Expect much negotiation at escrow time, expect credit demand give-backs, expect demands for price reductions. Such reductions for the small builder can be a deal-breaker, and result in financial ruin. However, for Lenar and other big developers, due to their density numbers, these reductions do not have the same impact.

“Cudos, however, to the unions for a job well done and for advancing the interests of big developers. Too bad they didn’t go further with the aforementioned reductions for the small builder that would have really made a difference.”

In my definition, such “stimulus” is a political euphemism for empty promises as it is applied to the small business owner or small developer. To confirm, ask around.

This is not to say that these proposals are bad, for they are not. What’s wrong and improper is that they result in inequitable treatment….one standard for the big developer and another for the small builder. In summation, what the small builder and developer need are reduced fees and permanently reduced inclusionary fees, including reduced inclusionary housing requirements.

Cudos, however, to the unions for a job well done and for advancing the interests of big developers. Too bad they didn’t go further with the aforementioned reductions for the small builder that would have really made a difference.

As accolades go to the Building Trades for a demonstration well done, condemnation befalls my good friend John Hanley of the Fire Fighters Union for his boycott of the recent American Ireland Fund Dinner honoring Fire Chief Joanne Hayes-White, due to some labor-management differences, differences which are an ongoing part of San Francisco’s labor-management relations. Worse, John cajoled the police union to also do the same. And, considering the mission of this dinner, which has raised over the last 35 years hundreds of millions of dollars for reconciliation and peace between Catholic and Protestant groups in the North of Ireland, this boycott was regrettable. Despite John’s immature actions, the event at the St. Francis Hotel was a sell-out and considered by many to be the best event of the Ireland American Fund ever. And, why not, for Joanne is an unusual person -- modest in her accomplishments, she brought peace and harmony to a department that prior to her stewardship was rife with acrimony, racism and nepotism. Everyone makes mistakes; we hope that John, as a gentleman, with good sensibilities, has apologized to Joanne for this one.

And, talking about events, what’s happening in San Francisco among the Irish and their outreach is the talk of the town. Ever since Willie Brown was declared the Grand Marshall of St. Patrick’s Day several years ago, things have not been the same. This year’s Grand Marshall was John Burton – a name which caused major tremors several years ago in Irish and Irish American conservative families. While Willie Brown’s nomination, as the first non-Catholic, African-American, was a first for the Irish Societies and somewhat of a culture shock, John Burton’s nomination went very smoothly. Meantime, over at the Hibernian Newman Club St. Patrick’s Day luncheon, an Italian speaker addressed over 650 Irish Americans for the second time in a row. The speaker this year, Carmen Policy, of 100% Italian descent, much like Joe Russoniello, last year’s speaker, entertained the Irish clans with Irish jokes and stories and brought to the event laughter, warmth and joy. The question being asked is why an Italian speaker for the second consecutive year for a St. Patrick’s Day luncheon? And, why this new outreach to people of power like Willie Brown and John Burton? Rumor has it that Anne-Marie Conroy and Mary Cassidy have a more nefarious plan in mind…..a plan to get political support for an Irish Pope -- a Pope who will then reside in either Dublin or Limerick. And, they have in mind a few well-known local priests…Father Mike Healy, Father Brendan McBride and Father Gerry O’Rourke.

Joe O’Donoghue is a longtime political combatant, former President of the Residential Builders Association (RBA) and acting President of the newly formed Condominium Owners, Builders, Remodelers Assn. (COBRA) Feedback:

April 2010

They Frankly Own the Place

With 29 million American workers still seeking full-time employment, it is patently clear that our economic recovery is still hovering in the liminal zone of economic uncertainty. Additionally, the failure of the system to generate jobs sufficient to absorb the 100,000 new workers who enter the job market every month means that the economic recovery plan has stalled. Obviously, in addition to the $780 billion stimulus funds already spent, more stimulus money will be needed; and therein lies the conundrum, as the election of Scott Brown diminished President Obama’s Senate majority that was so vital to securing such funds. For those millions of under employed Americans, this ominous news is most heart breaking.

Meantime, as these middle class and blue collar American workers remain trapped in the abyss of economic hardship with near empty wallets, suffering deprivation and other wants, the Wall Street bankers and their allies who created this mess are once again euphoric now that their ’09 bonuses exceeded those paid to them in ’08. That these financial predators who were responsible for both packaging and selling the inflated toxic loans, assets that unleashed the devastating economic tsunami, were not only embraced but also rewarded with bailouts by the body politic, Democrat and Republican, is an indictment of the system. And this special treatment received concomitant with the obsessive prioritization given bankers’ desires, leaves unanswered the question why such special attention, why this embracement? It also leaves unanswered why an equal focus was not provided to a program that would put the American unemployed workers back to work. It should be noted that it took the election of Scott Brown before this focus was realigned.

Accepting the argument that we needed to save the banks, why, however, did the Administration and the body politic, Democrat and Republican, allow these institutions to continue without constraint or review, the high-risk philandering that created the havoc to begin with? It also raises the question as to why more transparency of these secretive trades were not required, transactions so complex that Fed Chairman Ben Benanke found it necessary to take a refresher course from hedge fund managers last year. Meantime, these secretive and uncontrolled transactions are creating a fear that another meltdown is not far off. Originally designed to help farmers hedge against future price fluctuations, these financial instruments known as derivatives became the darling of Wall Street bankers in the mid 1990’s. Buoyed by Congressional legislation that protected them from regulation, this form of trading became a new way for financial institutions to create money while at the same time avoiding taxes. Small wonder that this trading market grew exponentially from $20 billion to a nominal valuation of over $680 trillion today. And ironically it was a San Francisco born native, Brooksley Born, a Lincoln High School and Stanford Law School graduate who was the first person who attempted to regulate these transactions. But not so ironically, Congress not only failed to act on her warnings, but passed legislation that did the opposite when they exempted these derivatives from any form of review, regulation or oversight. Described in 2002, as “weapons of mass destruction” by none other than Warren Buffett, these derivatives are considered the “anthrax” of the financial industry.

Considered also by many to be a time bomb ready to explode, it is feared that if such should happen, it will truly be an Armageddon meltdown that will totally devastate the world’s economy with no exceptions. And these warnings are still going unheeded by the administration and the body politic, Democrat and Republican alike. Despite the testimony before a Congressional committee several months ago that “today’s business model is about making money through tricks and traps” by none other than Elizabeth Warren, a Harvard law professor, Chair of the Congressional Oversight Panel, no action has yet been taken to regulate, review or give more transparency to these transactions. It should also be noted that the nominal value of $680 trillion attributed to these transactions is 13 times greater than the Gross National Product of every country in the entire world.

Realizing that we’ve already had two previous meltdowns, one in 1998 when the global economy was threatened by a mere $5 billion derivative loss by a major hedge fund company, and considering the housing bubble meltdown of April 2008, it is incomprehensible why the body politic and the Administration continue to ignore the dire Cassandra warnings of such eminent and knowledgeable people. And when one considers the fact that the two previous meltdowns were generated by the same nefarious financial junta who is in control of this $680 billion “dark market,” it makes the reluctance of the body politic to act shocking. It would appear, as is now alleged by some, that the financial junta has usurped, through huge lobbying and power, the House of Representatives and the Senate, including the Administration itself. According to no less personage than Democratic Senate Whip Dick Durbin, “they frankly own the place,” as he stated in April 2009. And when one considers that Wall Street powerhouses are entrenched at the Federal Reserve, the Treasury Department and the regulatory agencies, e.g. the SEC, FDIC and the CFTC, one is inclined to give credence to this hypothesis….. a hypothesis that we now all have time to dwell on.

Joe O’Donoghue is a longtime political combatant, former President of the Residential Builders Association (RBA) and acting President of the newly formed Condominium Owners, Builders, Remodelers Assn. (COBRA) Feedback:

March 2010

The No Loan Banks

With over 20 million Americans walking the highways of unemployment and underemployment in pain, our economic recovery is still very much in limbo. Clearly, after ignoring this issue for over 1 ½ years, the body politic, Democrat and Republican, needs to develop a comprehensive strategy and implementation plan that will illustrate and triangulate the means whereby these 20 million or more unemployed Americans will be put back to work. And this great country has at its disposition templates to so do — those used by FDR in the 1930’s or those used in the 1950s when the 42,500 miles of interstate highway construction was begun and completed across the USA.

Secondly, the body politic — Democrat and Republican — needs to view and understand these economic meltdown issues not just from the bankers’ perspective, but from the middle class. As it now stands, small businesses and their customer base are finding credit and borrowing lines reduced and in many cases eliminated. These banking customers are those who, in the past, never had any credit repayment problems, yet they are now finding themselves “tarred and feathered,” as if they were the bad credit risks who helped generate the economic meltdown.

Apparently the regulators — the ones responsible and negligent for allowing the bad lending practices of the banks to occur in the first place — have now issued new lending regulations forcing banks to curtail lending. And what the administration needs to realize is that these small business customers, if denied credit, won’t be able to rehire nor will their customers be able to buy. The net effect of this bad policy will be to stymie and stifle the economic recovery envisioned by the administration.

Consider the example of one investor — a customer of a “big” TARP recipient bank via a buy-out of his original bank, who never had a late payment on his original loan. The loan was for a building with a healthy cash flow, yet when the loan became due and he applied for an extension, he found himself transferred to the Bank’s “special assets” section — which is a euphemism for the “toxic assets” section. The Bank refused to extend this individual’s loan beyond nine months. This same bank, the beneficiary of the government bailout and money borrowed at no cost from the Federal Reserve, raised the customer’s interest rate from 5½ % to 8%.

Thirdly, the body politic also needs to realize that the big banks, because of their ability to earn billions of dollars outside of the middle class base, have no need of this middle class base. But the administration also needs to realize that if such bad policies are allowed, it could in fact induce future economic disasters.

Fourth, the body politic needs to correct its past flawed oversight which failed to demand that all big banks be required to extend credit to customers who in the past, before the meltdown, were credit worthy.

Another example is a single homeowner, with an excellent job as an RN, who had completely remodeled her home; she also had a near perfect credit score of 840. Because her payments on her present loan were scheduled to double this year, she applied for refinancing but was turned down by several big banks (all recipients of TARP funds). Their lopsided reasoning was that they were only refinancing loans for people who were considered bad credit risks. Clearly, an “ostrich with its head in the sand” policy. Another single woman who had a credit score of 750 points who has never been unemployed, never made a late payment on her existing loan, and who also remodeled her home, failed to get refinancing. Her payments were also due to double. The basis of this denial was that her home value had dropped.

Finally, the body politic needs to extend stimulus lending packages to the smaller banks. This will have the positive effective of creating competition and be a more effective means of recovery disbursements.

Clearly, the body politic lost its perspective when it ignored — for over 1 ½ years — the middle class economic and unemployment issues. Although it embraced the Big Banks’ issues of bailouts, the Big Banks did not reciprocate in kind when it came to extending credit to good middle class customers and small businesses. Furthermore, considering that the stimulus money went to well connected self-interest groups — with one exception, the “cash for clunkers” program — this raises the question as to whether or not the body politic has been compromised by these special interest groups, and whether or not the special interest groups have in fact hijacked the entire body politic at the expense of America’s middle class.

Feedback for Joe

February 2010

Plain Talk – Straight Talk

It was Tuesday of Thanksgiving week and for the public health hospital workers who exited a City Hall hearing, this day was anything but a time of good cheer. For the unthinkable had just occurred … the $8 Million that was sought, to save their jobs, out of a budget of $6.9 Billion, which 8 years ago was only $3.2 Billion, was just not there. That this bolt from the blue news sucker-punched these hospital workers into a state of shock would be an understatement — this Cassandra information totally stunned them. And at the hearing in which this information was unveiled, they sat as if comatose, like silhouettes of the living dead, in abject, total, complete silence.

Sadly and regretfully, about 8 months ago these employees were told not to worry, everything would be fine, solutions forthcoming. They were assured that the ravages of the unemployment and economic tsunami would not affect them, nor would it San Francisco, and human nature being what it is, these hard working employees believed what they were told. And when one considers that these employees were among the lowest paid of City workers, workers who were doing the most unappealing of jobs that many people would shun and were performing them in stark, uninviting surroundings, their acceptance of what they were told is understandable. Moreover, the needs they were fulfilling would continue unabated regardless of economic times, such as the changing of urine soiled sheets, emptying bed pans, washing the fetid smells from the bodies of the helpless, lifting daily the dead weight bodies of the bedridden, which they performed with generosity and kindness.

However, as these front line workers exited the chambers, with gloom and anxiety clouding their features, facing now an uncertain future but one guaranteed to inflict hardship and deprivation, they left behind in their wake many, many unanswered questions.

For instance, where did the billions and billions of surplus revenue since 2002 go? Certainly not to road improvements. Certainly not to hiring extra police or fire personnel. Certainly not to quality of life improvements. To the contrary, the only increases which occurred resulted in increases in the deterioration of quality of life services - MUNI, education, safety, recreation and parks, libraries, and parking. Additionally, however, one must give credit where credit is due and recognize talents whenever demonstrated; in the area of raising fees and taxes and locating brand new fee revenue sources, the bureaucrats have shown exceptional talent.

What is also more apparent today is the realization that what we have in the body politic across the county is a system that is there to serve only the well-heeled, or the most powerful special interests. No longer serving the public, especially that of the middle class, it is no surprise that feelings of alienation and cynicism are pervasive throughout this nation. In Washington, these special interests are Wall Street, the banking and insurance industries. In San Francisco, it is the cabal of the so-called non-profits. What’s important to know is that government today, as we know it, has become more and more parasitic — that is, it needs to consume more, and as the appetite to consume grows, the need for revenue increases. Hence, the creation of the new limbs – revenue police – euphemistically called “compliance officers,” follow.

Regretfully, these bureaucrats, in conjunction with elected officials, know nothing about how to add value to assets, which is the primary way to increase revenue from the private sector. Furthermore, this limitation, lack of business acumen and creativity inhibit economic recovery, which is best demonstrated by the failure of the new progressive Board members who several months ago failed to act when the Cassandra predictions were made about the impending layoffs of the lowest paid City workers. They could also have placed a measure on the ballot to save these jobs — after all, they did it for themselves, placing on the ballot a measure that gave them carte blanche to increase their own staffing. And, they should have also initiated studies that would have uncovered inefficiencies in City government and sensible ways to cut costs. Moreover, their failure to eliminate the barriers that prevent businesses eager to lease any one of the 800 or more vacant commercial stores, demonstrates either a lack of knowledge, a lack of business acumen, or just plain indifference to the real plight of people looking for work.

What has been obvious for the last decade or more is that the good life made people apathetic and created a middle class that disdains any involvement or interest in the political structure. We saw the same thing occur in unions — the better the benefits that were negotiated, the more indifferent their members became in the political process. And if there is a silver lining in these dark times, it is that people who were, or became complacent, now have a sense of grievance and therefore, a reason to participate. They are forced to refocus their attention, so beginning the process of taking control of, and being responsible for, their own well-being.

Joe O’Donoghue is a long-time political combatant, former President of the Residential Builders Association (RBA) and acting President of the newly formed Condominium Owners, Builders, Remodelers Association (COBRA).

December 2009