M&T Bank vs. Bank of America

Bank of America just announced yesterday that it made a $6.2 billion profit for the 3rd quarter of 2011. This drew a lot of justified public outrage. What was under-reported was the fact that for the previous 12 months, from July 2010 to June 2011, that it had lost $15.32 billion. (1) This indicates that Bank of America has a serious gambling problem. Therefore, I did an analysis of Bank of America compared to my local/regional bank, M&T Bank.

What I learned was not that surprising to anyone who is knowledgeable in finance and accounting. Today, M&T Bank, announced their own 2011 3rd quarter results. It announced a net income of $183.1 million, which is only 2.94% of Bank of America's net income. But, M&T Bank only manages almost $77.9 billion in assets, while Bank of America manages over $2.2 trillion in assets. Therefore, M&T Bank is only 3.51% the size of Bank of America. If M&T Bank were the size of Bank of America, it would be on pace to turn a $5.2 billion profit. Yet, unlike Bank of America, M&T Bank posted consistent quarterly profits of between $192 million and $322 million for the previous four quarters. During the same time period, two of Bank of America's posted quartely losses for the previous four quarters amounted to $7.3 billion and $8.8 billion.

What this analysis says is that a large bank like Bank of America is forced to become an investment bank at the size it has become. At this size, Bank of America is more susceptible to events in the economy as a whole. M&T Bank, on the other hand, is much more nimble and flexible. M&T Bank, at its size, is more capable of understanding where investments will fail. Unlike Bank of America, it has not made headlines for foreclosing on thousands of homes. This shows that M&T took greater care in determining the ability of borrowers to pay their mortgages. This is also an argument that we must break up banks that are too big to fail. These types of banks border form oligopolies that rip off its customers and investors. They combine to form a banking monopoly that drags down the whole economy. If banks had to compete for customers, they would by necessity cut down on the biggest risks that they take. They also would not have the huge overall profits that allow their executives to spend millions of dollars lobbying for legislation favorable to their companies.

1. Bank of America website, "Bank of America Reports Third-Quarter 2011 Net Income of $6.2 Billion, or $0.56 Per Diluted Share," October 18, 2011. http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-newsArticle&ID=1618158&highlight=

2. M&T Bank website, "M&T Bank Corporation Announces Third Quarter Profits," October 19, 2011. http://mtb.mediaroom.com/Q3-2011

Big Coal’s Assault by a Bought-off Congress on the EPA and Appalachian Jobs

I attended an EPA hearing on May 11th titled, “EPA Mining Policies: Assault on Appalachian Jobs – Part II” by the House Committee on Transportation and Infrastructure.” House Republicans framed a mythical tone that President Obama’s EPA has killed coal mining jobs by using its authority under the Section 404(C) of the Clean Water Act. One interesting note about this hearing is that through an Open Secrets search, I discovered $23,950 in campaign donations in the 2010 election cycle by Koch Industries to five Republicans present at the hearing. They include James Lankford (OK), Don Young (AK), Rob Gibbs (OH), John Mica (FL), and Larry Bucshon (IN). A lobbying group in attendance was FACES (Federation for American Coal, Energy, and Security). They all wore shirts with the slogan, “Protecting American Coal Jobs”. They looked like they were actual West Virginia coal miners, but were really paid by a K Street lobbying firm to sit in on the hearing. While the Koch Brothers make far money off oil than coal, the candidates they and other powerful lobbyists support have a profit-first, anti-regulatory mentality, which plays directly into the hands of the coal companies.



Nancy Stoner, Acting Assistant Administrator of the Office of Water at the EPA, faced relentless attacks from House Republicans, who accused the EPA of using this act to slow down permitting for coal mines , stopping precious metals mining, and of shutting down American energy production. Representative Young, who is nearing 80 years old, even suggested that Congress should defund the EPA and claimed the Obama Administration has a policy of anti-worker and non-production. Clearly, Alaska’s youth need to send him into retirement in 2012 by electing someone who cares about the damage that coal mining does to our environment.



Stoner’s defended the EPA by stating that it seeks to reduce coal pollution, not coal mining. She gave solid testimony as to the Clean Water Act’s purpose in protecting America’s waters and wildlife, stating that clean water supports jobs. The EPA works with mining companies to suggest how mining projects can proceed, while protecting waters. Some companies do incorporate the EPA’s suggestions. The EPA rejected the permit for West Virginia’s Spruce Mine. The corporate owner of this mine rejected the EPA’s advice on protecting waters to be affected by this mine.



The reality is that the coal companies themselves are killing jobs using machinery to extract the coal through mountaintop removal coal mining, not caring about the communities they live in. In 1940 West Virginia coal mining employment totaled over 130,000. Then, there was a sharp decline in the 1950’s, during which coal mining employment dropped there by 50% in less than five years. By 1960, it fell to just above 40,000. As of 2008, the coal industry employed only 21,190 people in West Virginia. Which means the House Republicans did not do their homework to the trend of the long-term decline in coal mining jobs.

The hearing proved that activism to move college campuses beyond coal is absolutely critical to the movement. That needs to progress to moving communities beyond coal. The best way to help Appalachian communities beat the coal mining companies is to bring down the nationwide demand for coal, which Harvard researchers estimate is costing America $500 billion annually. This includes damage done by extreme weather events related to climate change, mining accidents, and widespread public health problems from both coal mining regions and areas near coal-burning plants. It is important to note the wealthiest areas of West Virginia are those where coal mining does not take place. Activism in both the coal mining regions and all across the nation will stop the assault not just on sustainable development in Appalachia, but all across America, too.

Interesting Post About Tea Partiers

This post accurately describes my feelings about the Tea Party. Why they did't protest this stuff while George W. Bush was President is mind-boggling. From http://www.wvablue.com/diary/6423/now-you-get-mad

I received this from a friend in Texas and wanted to share with our group here. Feel free to pass it on, maybe the Dems will come out in force to vote after reading this......
After The 8 Years Of The Bush/Cheney Disaster, Now You Get Mad?


You didn't get mad when we gave people who had more money than they could spend, the filthy rich, over a 5 trillion dollars in tax breaks, and wiped out the middle class.

You didn't get mad when the Supreme Court stopped a legal recount and appointed a President.

You didn't get mad when Cheney allowed Energy company officials to dictate Energy policy and push us to invade Iraq.

You didn't get mad when a covert CIA operative got outed.

You didn't get mad when the Patriot Act got passed.

You didn't get mad when we illegally invaded a country that posed no threat to us.

You didn't get mad when we spent over 800 billion (and counting) on said illegal war.

You didn't get mad when Bush borrowed more money from foreign sources than the previous 42 Presidents combined.

You didn't get mad when over 10 billion dollars in cash just disappeared in Iraq.

You didn't get mad when you found out we were torturing people illegally.

You didn't get mad when Bush embraced trade and outsourcing policies that shipped 6 million American jobs out of the country.

You didn't get mad when the government was illegally wiretapping Americans.

You didn't get mad when we didn't catch Bin Laden.

You didn't get mad when Bush rang up 10 trillion dollars in combined budget and current account deficits.

You didn't get mad when you saw the horrible conditions at Walter Reed.

You didn't get mad when we let a major US city, New Orleans, drown.

You didn't get mad with the worst 8 years of job creations in several decades.

You didn't get mad when over 200,000 US Citizens lost their lives because they had no health insurance.

You didn't get mad when lack of oversight and regulations from the Bush Administration caused US Citizens to lose 12 trillion dollars in investments, retirement, and home values.

You finally got mad when a black man was elected President and decided that people in America deserved the right to see a doctor if they are sick. Yes, illegal wars, lies, corruption, torture, job losses by the millions, stealing your tax dollars to make the rich richer, and the worst economic disaster since 1929 are all okay with you, but helping fellow Americans who are sick...Wake up America!!

Gabby Giffords Shooting, 10 Warning Signs: What's the Price of Violent Rhetoric and Imagery

The tragic shooting on January 8th in Tucson, Arizona which critically injured U.S. Congresswoman Gabby Giffords and killed six other people surely will change the nature of our democracy. There certainly were warning signs that elected officials could be threatened by violence as indicated by events over the 2-3 years.

1. Fox News Commentator Liz Trotta in May 2008, in a moment of mispronunciation, suggested that someone "knock off Osama, no Obama. Well, both if we could." This is the earliest expression of hatred towards Barack Obama that I can recall.
2. In October 2008, Sarah Palin accused Obama of "Pallin' around with terrorists who targeted their own country" after reading an article in The New York Times. There was no truth to this, but this apparently brought White Supremecists out of hiding and led to a spike in death threats against Obama during the final weeks of the 2008 Presidential Campaign.
3. In June 2009, Joyce Thomann, the President of the Republican Women of Anne Arundel County club in Maryland wrote a hate-filled rant posted online comparing Obama with Hitler. She stated that both Obama and Hitler took on political adversaries with "blitzkreig" ways.
4. A woman at a June 2009 town hall for Delaware Congressmen Mike Castle brought up the issue of her birth certificate and then pointed out her view that President Obama is not an American citizen and was a citizen of Kenya, instead. When she pointed that out, many people in the room actually applauded her. It took about three weeks before this incident made headlines, but once it did, the YouTube video of this incident went viral. When Castle, a moderate Republican, affirmed that Obama is a citizen of the U.S., the crowd booed him. This incident led to chaotic scenes at town halls all across the nation as angry people not only spoke out against a wrongfully perceived government takeover of healthcare, but also Obama's birthplace.
5. In March 2010 after the passage of healthcare reform, Sarah Palin sent a public message through her Twitter account saying "Don't retreat, Instead - RELOAD."
6. In January 2010, Nevada Senatorial candidate Sharron Angle sugessted "that people will be looking to those Second Amendment remedies" and that "the first week we need to do is take Harry Reid out." This tape surface in June 2010, sparking immediate outrage.
7. At a July 4th celebration in 2010, Joyce Kaufman campaigned for former Iraq veteran Allen West, a House candidate for the 22nd District in Florida. She said there, "if ballots don't work, bullets will."
8. Rich Iott, the U.S. Republican House candidate in Ohio's 9th Congressional District, participated in Nazi re-enactments, as revealed in October 2010. (1) He later lost in the general election for this seat.
9. After Democrat Bob Filner defeated Tea Party backed Republican Nick Popaditch to win the U.S. House seat for California's 51st Congressional District in the 2010 general election, a violent incident broke out as Popaditch led about 100 of his supporters against Filner. At least one person was punched in the face. Popaditch'smob shoved and spat on Filner before police broke up this incident.(2)
10. Carl Paladino, the Republican nominee for New York Governor in 2010, lost to Democrat Andrew Cuomo. At his concession speech on November 2nd he said, "I have a message for Andrew Cuomo, the next governor of New York, "I've always said my baseball bat is a metaphor for the people who want to take their government back. But this isn't my bat after all. As our next governor, you can grab this handle and bring the people with you to Albany. Or you can leave it untouched and run the risk of having it wielded against you, because make no mistake: You have not heard the last of Carl Paladino." (3)

By no means, is this an exhaustive list of violent rhetoric and imagery that has made the news within the last three years. The people that hold not just the views, but the mindset, of the most radical elements of the Tea Party need to realize this anti-government culture can can capture the minds of mentally unstable individuals, who ultimately carry out senseless acts of violence. They help create the culture that breeds hatred of elected officials and weakens gun control laws. This could weaken our democracy as more money surely will be spent by our elected officials to protect themselves, their families, and their staffers. In a nation that needs to create quality jobs, especially in manufacturing and the development of clean energy, this will further slow the economic recovery in our nation. Every dollar we have to spend on things like the security of our elected officials is one less dollar that we can invest in making the United States energy-independent. Yes, there really is a price that all Americans pay for the extreme political views and tolerance of violence of just a few individuals with delusional fantasies. While it may be hard to measure, one would hope that people would educate themselves about what is really happening in America and come up with constructive ideas and solutions to move America forward.

Footnotes:
1. http://www.theatlantic.com/politics/archive/2010/10/why-is-this-gop-house-candidate-dressed-as-a-nazi/64319/
2. http://www.southwesterncollegesun.com/news/sun-tv-bob-filner-harassed-at-golden-hall-by-challenger-1.1744755 and http://libertypundits.net/article/nick-popaditch-for-congress-tea-party-rally-9182010/
3. http://latimesblogs.latimes.com/washington/2010/11/with-baseball-bat-in-hand-defeated-new-yorker-promises-you-have-not-heard-the-last-of-carl-paladino-.html

Coal Plant Construction Costs - Additional Data

A $2.65 billion coal gasification project in Indiana created 1,000 construction jobs. This works out to $2.65 million per job, more than twice the average amount it takes to create one win power job. While it will create 200 plant jobs and 300 mining jobs after completion of construction, compared to 4-6 operating and maintenance jobs from the Western Maryland wind farm, it has a lot more expense than the upkeep of the wind farm. The energy that comes from the wind farm is going to produce steady rates for end users of this energy or electricity. As a renewable, sustainable source, it will never run out and not pollute the air or water. As a result, wind farms have lower opearting costs than coal plants. The only problems with wind are when the wind does not blow, the need to scale up wind power by installing thousands of wind mills, and repairing wind mills damaged by storms. But, the second of these problems is offset by high unemployment, meaning there are people who want jobs and are ready to contribute to the wind farm building boom. The final of these three problems may become more noticeable once offshore wind farms are built. While the coal project may appear to create more jobs, it depends on the way you look at it. The problem with these jobs are that they are needed to clean up the environmental damage from mining coal, burning it cleanly for power, and disposing of coal ash waste in a safe way. The jobs from wind power contribute more to generating power for electricity.

2. http://www.buildingindianablog.com/2010/12/17/coal-gasification-project-to-generate-1000-construction-jobs/

Obama Tax Cut Deal - Good Plan or Bad Plan?

President Obama has a tax deal plan in place for a two-year extension of the Bush Tax Cuts. He cut a deal last week with soon-to-be Speaker of the House John Boehner and Senate Minority leader Mitch McConnell to extend the Bush Tax Cuts of 2001 and 2003. The deal would extend all the tax rates that Bush established, including the 35% top rate on all income above $250,000 for the next two years. Without this deal, the Bush tax cuts would have expired and the top rate would go back to 39.6 %, where it was when Bill Clinton was President.

Included in this plan is an extension of unemployment insurance for 13 months, tax credits for renewable energy, and a payroll tax cut for employees. The estate reverts back to 35% on estates above $5 million after it was exempt for 2010. In 2009, the estate tax was 45% on all estates above $3.5 million.

Outgoing Speaker of the House Nancy Pelosi will step down to House Minority Leader on January 5th when the 112th Congress gets sworn in and the GOP becomes the majority. While this tax deal will irritate Progressives and some Tea Partiers for completely different reasons, this just may have saved Obama's Presidency. A $1 trillion-plus National Deficit is not healthy for the American economy because it forces us to borrow more from China. But, Obama escapes the politically untenable position of allowing tax increases, even small ones, to occur on the ever-shrinking middle class. Or the expiration of unemployment benefits with high unemployment. If unemployment remains above 5.0% through January 2012, the GOP House will be on the hook for extending unemployment benefits during an election season. If they do not, they run the risk of losing the House back to Democrats.

This all but ensures a second term for Obama because Progressives surely aren't going to vote for any Republican or Tea Party candidate for President in 2012 since he is going to be the most left-leaning candidate on the ballot. The Republicans figure to run either Sarah Palin, Mitch Romney, or Mike Huckabee against him. None of these Republicans appears to have the ability or widespread popularity to beat him in a national contest. His re-election will also help protect vulnerable Congressional Democrats in 2012.

Offshore Wind for Maryland: Windfall or Blowing Money Away?

I attended a conference Saturday December 4th in Annapolis about the potential of offshore wind power in Maryland. Chesapeake Climate Action Network put it together to show the huge benefits that it could have for this state.

Compared to wind energy, coal costs more per equal amounts of investment in power capacity. Constellation Energy says that it has invested $875 million to upgrade its Brandon Shores coal-fired power plant in northeast Anne Arundel County to meet Maryland's tough clean air laws by using new scrubbers. Constellation also said that this investment created 2,000 union jobs for three years. That works out to an average of $437,500 per job, or $145,833 per job per year. That seems very expensive compared to wind energy. By comparison, Constellation also has a $125 million investment to build a 28-turbine wind farm in Western Maryland to provide 70 Megawatts (MW) of power. This investment will create 110-120 jobs, with 4-6 annual operating and maintenance jobs upon completion. The Brandon Shores plant has a capacity of about 1,300 MW. To get about 1,300 MW of power from wind energy using this project as an example would require an investment of about $2.32 billion and create well over 2,200 jobs.

Would a coal plant would cost more than this? According to Synapse Energy, for one Ohio utility, the construction costs of a 960 MW coal-fired power plant in Ohio more than doubled from about $1.25 billion in October 2005 to almost $3 billion in January 2008. This was due to worldwide competition for raw materials and plant design construction, especially from China and India. (1)

Construction costs aside, one cannot forget the enormous environmental and health costs that coal wrecks on human beings. It pollutes both the water, requiring governments to spend tax dollars to clean it, and the air, driving up healthcare costs by causing asthma and many other ailments such as cancer. Local governments, especially at the state level, can and do pass laws requiring utilities to upgrade their equipment to protect the environment. They do so to make sure the corporate utility's power plants, especially coal-fired ones, comply with environmental goals desired by their commmunities.

Maryland has a choice: do we continue to destroy Appalachian Mountains to meet our energy needs or do we build offshore wind farms to power our lives? We should choose the latter because it will provide environmental benefits, improve the health of Marylanders, and create more good jobs, making it a win-win.

1. http://www.synapse-energy.com/Downloads/SynapsePaper.2008-07.0.Coal-Plant-Construction-Costs.A0021.pdf

2. http://www.buildingindianablog.com/2010/12/17/coal-gasification-project-to-generate-1000-construction-jobs/