Thursday, January 18, 2007
He Didn't Call it a Desperate Measure at the Time
Remember that "very favorable" line of credit that the mayor announced during the election? Apparently Ed Blakely convinced him that it wasn't such a good deal after all:
I'm glad that Blakely's earning his keep, but the mayor did describe the terms of the loan as very favorable. I can also understand that the election caused the mayor to sugarcoat things, although that alone would be another reason to stop treating the mayor as a non-politician whose honesty and candor often get him into trouble. It might be hard to remember now, but during the weeks leading up to the election, even observers as astute as James Gill Stephanie Grace described the mayor that way.
However, even three months after the election, Nagin still bristled when questioned about the loan:
I have no idea whether some Nagin crony was in line for a commission on the loan or if Nagin was merely reacting like a child whose toy had been taken away. It doesn't matter. Just remember that statement of Nagin's whenever city finances are discussed. Yeah, he's really going to stretch every limited dollar to make the city better.
In a related matter, a humvee would be a big improvement over my bike and public transit. But I'd have trouble affording the gas, let alone the car note.
A better analogy might be if I were married and my wife and I had an affordable lease that was due to expire. If in the months leading up to the expiration of the lease I kept telling my wife that I was due to get a promotion that would cause my income to explode allowing us to a luxury apartment, she'd certainly say that we should wait for the promotion before getting the luxury apartment. A second argument over whether the new apartment was really an improvement could wait. If I let the old lease expire, it wouldn't matter how nice the new apartment turned out to be. My wife and I would still be broke and she'd have that much more reason to distrust me, at least where finances were concerned.
Two silly analogies, but the point is clear. During the debate over garbage collection, I thought that the argument over whether the automated service would work was the wrong argument. Or the right argument at the wrong time. Yesterday's article on the subject was beside the point. And I'll say it one more time, The Times Picayune brought up campaign contributions to judges when it covered continuing legal education. The mayor himself brought up Landrieu's campaign donors during the election. But nobody mentions the fact that the two biggest contracts went to two of the mayor's biggest campaign donors.
Blakely... revealed Wednesday that the city has abandoned its plans to pursue a $150 million line of credit that Nagin announced with great fanfare in May in the final days of his re-election campaign.
Under the proposal, four participating banks stood to earn $3.75 million in upfront fees whether the city drew down on the loan or not.
Financial analysts also noted that the proposed interest rate of 6 percent was substantially higher than most cities are paying for a line of credit...
...
Blakely said the Nagin administration walked away from what he described as a bad deal at his urging.
"We want to borrow the lowest possible amount and pay it back in the shortest possible time," he said. "And I think we can find something more competitive. At the time the mayor went after the (previous) line of credit, the city was desperate."
I'm glad that Blakely's earning his keep, but the mayor did describe the terms of the loan as very favorable. I can also understand that the election caused the mayor to sugarcoat things, although that alone would be another reason to stop treating the mayor as a non-politician whose honesty and candor often get him into trouble. It might be hard to remember now, but during the weeks leading up to the election, even observers as astute as James Gill Stephanie Grace described the mayor that way.
However, even three months after the election, Nagin still bristled when questioned about the loan:
"That got caught up in post-election politics," Nagin said. "We were in front of the Bond Commission, and certain individuals showed up that had not participated in the commission in a long time and started raising all these questions about the upfront fees, and it got placed on hold."
I have no idea whether some Nagin crony was in line for a commission on the loan or if Nagin was merely reacting like a child whose toy had been taken away. It doesn't matter. Just remember that statement of Nagin's whenever city finances are discussed. Yeah, he's really going to stretch every limited dollar to make the city better.
In a related matter, a humvee would be a big improvement over my bike and public transit. But I'd have trouble affording the gas, let alone the car note.
A better analogy might be if I were married and my wife and I had an affordable lease that was due to expire. If in the months leading up to the expiration of the lease I kept telling my wife that I was due to get a promotion that would cause my income to explode allowing us to a luxury apartment, she'd certainly say that we should wait for the promotion before getting the luxury apartment. A second argument over whether the new apartment was really an improvement could wait. If I let the old lease expire, it wouldn't matter how nice the new apartment turned out to be. My wife and I would still be broke and she'd have that much more reason to distrust me, at least where finances were concerned.
Two silly analogies, but the point is clear. During the debate over garbage collection, I thought that the argument over whether the automated service would work was the wrong argument. Or the right argument at the wrong time. Yesterday's article on the subject was beside the point. And I'll say it one more time, The Times Picayune brought up campaign contributions to judges when it covered continuing legal education. The mayor himself brought up Landrieu's campaign donors during the election. But nobody mentions the fact that the two biggest contracts went to two of the mayor's biggest campaign donors.
