Representative Anthony Weiner (D-Brooklyn) of New York's 9th congressional district, said banks that received funds from the Troubled Asset Relief Program (TARP) are already "effectively nationalized."
When asked at a question-and-answer session last night at NYU Law School about whether the Obama administration's contemplation of converting preferred shares of banks obtained as part of the bailout process into common stock would amount to nationalization, Weiner said it would.
Further, he reasoned, since the federal government currently exercises leverage over bank actions by dint of holding the option to convert preferred shares in banks to common stock (thereby technically gaining board representation,) banks subject to this leverage are nationalized right now.
Wiener said the Obama administration's hesitance to actually convert the preferred shares to common stock was probably due to the possibility such a move would more urgently motivate banks having taken TARP funds to repay them faster to remove the possibility of a government presence on their boards.
Weiner's comments come as the banking giant Goldman Sachs announced Monday that it is ready and eager to repay the $10 billion in TARP funding it received this past winter. According to the Wall Street Journal, as of March 27 Goldman netted income of $1.81 billion ($3.39 per share), up from $1.51 billion ($3.23 per share) a year ago. J.P. Morgan Chase & Co. has said it too wants to repay it's TARP loan.
The Journal reported that other banks have expressed interest in repaying taxpayer money quickly in order to get out from under government regulations they claim are onerous and subject to unpredictable changes.
 Weiner said TARP banks are "effectively nationalized" because, by having the option to convert accumulated preferred shares in banks into common stock, the federal government implicitly holds the power to grant itself board representation |
Weiner said the federal government faces a conundrum: it wants the taxpayer funds repaid, but it doesn't want to relinquish control of banks if it thinks doing so will further destabilize the financial system on the whole. National Economic Council chairman Lawrence Summers voiced similar concerns on Sunday's "Meet The Press" television program.
Not running - yet; says Mayor Mike "lied"
Though Weiner reiterated his stance that he isn't presently planning on running for mayor of New York City, he said he will definitively announce in "the last week of May" whether he will run. He said that because of the financial situation, right now he wants to focus on representing New York City's interests in Washington, D.C.
Such ambiguity didn't stop Weiner from making the case for his still-theoretical candidacy. He said New York City Mayor Michael Bloomberg "lied" when the mayor claimed that the process to examine and revise the term limits law would be "democratic."
"And I don't like being lied to," he warned, predicting the mayor's successful effort to enable himself to run for a third term would be remembered as a "dark day" for New York City. He said he would push for New Yorkers to have a say in how the law is restructured.
On the question of MTA financing, Weiner said his challenge to the present funding plan isn't regarding the amount of money allotted, just with how it will be used. Weiner wants state and local operating budgets to be eligible for federal infrastructure funding. Currently, federal law allows federal infrastructure funds dedicated to states and localities to fund only to specific construction projects, not annual operating budgets.
Weiner claimed that because New York City's subway system is unique in the nation in that it is "mature, except for construction on the Second Avenue line and the 7-train," the system should be eligible for federal funding because it is vital to the New York economy even though maintenance and operation, not building, comprise the vast majority of it's budget.
In response to an audience question about whether Democrats will move to implement gun control legislation, Rep. Weiner was not optimistic, predicting that the Obama administration would have to expend enormous political capital in such an undertaking, and that the votes in Congress were not available. He surmised that Congressional Republicans would uniformly reject any such proposal and would be joined in opposition by too many Democrats for a bill to pass.
Tony, the ladies' man
Rep. Weiner discussed lighter issues as well. When asked whether there was truth to the apparent perception that he is a "ladies' man," he claimed he wasn't sure, that he has a "network of 160,000 Jewish grandmothers" at his disposal (implying that he'd have no problem finding a date if he wanted one), but that he is, in fact, seeing someone. Weiner is dating Huma Abedin, an aide to Secretary of State Hillary Clinton during Clinton's 2008 push for the democratic presidential primary nomination.
When asked whether his name has been a source of confusion or a hinderance in his political career - "Anthony" being a commonly Catholic name, "Weiner" a commonly Jewish one - the congressman said that it has actually helped him.
He described how, in one of his early campaigns, he saw signs in mostly Latino Ozone Park, Queens exclaiming "TONY!" Assuming he had an as-yet-unheard-of opponent with local support, he asked his aides who "Tony" was. His aides informed him that they themselves had the signs made, and that Wiener was, in fact, "Tony."
He then cracked that in Borough Park, which is heavily Orthodox Jewish, "They still know me as Chaim Ben-Dovid Mordechai."