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The Bailout Blues and Gut Check Soul
Revue
An Earth Manifesto publication by Dr. Tiffany B. Twain
October 16, 2008
Preamble: Music Plays in the Background
Lead Vocalist, harmonizing: “Hey, Jude, don’t let me down, let’s take a
sad song and make it better. All
together now: Imagine!”
Tenor Saxophone, with fanfare: “I have a particular worldview I’d like to
articulate. You know what I mean?”
Bass, strumming: “Ah, idealism! Ah, philosophy! Sing the Blues, Baby!”
Drummer, after a drum roll: “The first thing is, if we want peaceful
societies, we need to make them fairer, and more just. Oh say, do you see the Golden Rule by the
dawn’s early light?”
Trumpet, trumpeting: “Holy cow -- that’s practically biblical! Give me a break!!
Alto Sax, soliloquizing: “We’re sure leading a cartoon existence.”
Cymbals, clashing (what hell kind of Blues
Band is this?): “Que pasa,
silver-tongued siren?”
Piano, after a virtuoso instrumental
riff: “Sister Tiffany comes to me, speaking
words of wisdom, let it be. She tells us
to change what we must, and not just let it be … let it be … let it be.”
Blues Keyboard, trilling: “One pill makes
you larger, and one pill makes you small, and the one that mother gives you,
doesn’t have enough logic and proportion to address the causes of your symptoms
in any desirable way at all. Don’t just
feed your head!”
Lead Guitar, wailing: “I can’t get no satisfaction, my guitar weeps
for thee and me.”
 Every form
of refuge has its price. 
Harmonica, soulfully epiphanizing: “Here comes the sun!”
The Bailout Blues
As
this odd song plays in the background, historic developments envelop us. Ideological beliefs, fervently held, are
crashing up against reality, and splintering asunder. Government interventions in the marketplace
are coming to the rescue of a shaky global financial system in a desperate
attempt to ease a severe credit crunch, and to save global stock markets from
plummeting too far, and to rescue the economy from a deepening recession. The federal government has nationalized
mortgage giants Freddie Mac and Fannie Mae and bailed out the enormous
insurance guarantor AIG. It has let
Lehman Brothers go bankrupt, and helped facilitate ‘fire sales’ of giant banks
and investment institutions including Bear Stearns, Merrill Lynch, Wachovia and
Washington Mutual. Whoo Hoo!
But
the rough ride is only just beginning.
Boldly well-considered action is required. Our representatives have hurried to enact an
emergency rescue plan put forth by the Bush administration’s Treasury
Department that has already been extensively amended by Congressional
leaders. It comes in the form of an
unprecedented $700 billion Bailout Plan that initially blew up in the House of
Representatives on September 29 at the hands of a curious coalition of free
market conservatives and fairness-minded liberals. Numerous issues were in play. Many people are extremely concerned about
government bailouts because they place the burden of costs and risks on
taxpayers, not on those who were responsible for getting us into this tricky
state of affairs -- and not on those who were the main beneficiaries of the
inflation of the bubble. This action
veritably exemplifies what Naomi Klein calls “the Shock Doctrine”.
The
Bailout plan revolves around the idea that risky mortgage-backed securities and
other ‘troubled assets’ will be bought by the government from banks. The hope is that this will have the effect of
‘recapitalizing’ banks, and allow them to begin making more loans and thereby
mitigate the terrible risks to the economy associated with hard-to-get credit
and a sudden widespread aversion to risk.
This crisis-engendered legislation has proved flexible enough, and the
emergency so severe, that the Treasury Department has decided to use the first
$250 billion to inject capital directly into banks, taking a government equity
position in them, and gaining a better multiplier effect on credit availability
than would be effected by merely buying up a bunch of toxic debt.
The public was rightly suspicious and did
not trust the original plan because it put taxpayers on the hook for the huge
cost. They seem to intuitively
understand that the devil is in the details, and that there will be far too
little accountability of the insider ‘deciders’ who will do the buying of bad
assets. There are obvious conflicts of
interest that will arise in determining what price should be paid for the
‘toxic debt’. The higher the price paid,
the better for the banking system and the worse the deal for taxpayers.
Many people
have “fooled around and fell in love”.
At first, such people generally love a person for who they are. Then pretty soon they find themselves trying
to change the one they love! This
Bailout Plan was certainly not love at first sight for anyone, but the
politicians did their usual job of tweaking it with enough bells and whistles,
and a minimal amount of sensible controls, plus $150 billion in pet projects,
and everyone figured that we are in a desperate panic situation, so both houses
of Congress finally passed the bill. All
of a sudden we’ve been taken advantage of, we’ve been forced into a shotgun
marriage, and we have little chance to be able to abort this desperate plan.
The old
Chinese blessing and curse says: “May
you live in interesting times.” Lucky
us: these are downright and doggone
fascinating times. I
have a wild theory that, in this democracy of ours, it is possible to
positively promote the public good, and not just the good of the few. We have taken a costly step to reassure
markets, and greased the wheels to prevent a credit collapse from destroying
the global economy. We have seen the
Federal Reserve cut interest rates, and gone a bit further down the road to
where the economic situation will correct itself and turn-around, so now is the
time to assess how we can CHANGE our system to be consistent with better plans
and ideas, and make it more sensible and fair and GREEN and stable and
sustainable. A crisis provides us with a
good opportunity to make bold changes, and it would be best to make favorable
changes rather than boldly anti-populist ones!
Better Plans
The economic
crisis is spreading its contagion from financial markets to the real Main
Street economy. Financier George Soros
succinctly summarized the real problem:
credit is frozen and banks suddenly have gone from being too eager to
make risky loans to being highly risk-averse.
Soros opposed having the government buy troubled assets. He pointed out,
weeks before the Treasury Department came around to the same conclusion, that
it is much more effective to recapitalize the banking system by injected funds
“at the equity level” rather than “at the balance sheet level”. Such actions, says Soros, provide more than
twelve times the lending impact, so an investment of $700 billion by the
government would yield $8.4 trillion to re-ignite the flow of credit. “In practice, the effect would be even
greater because the injection of government funds would also attract private
capital. The result would be more
economic recovery and the chance for taxpayers to profit from the
recovery.” This is a better idea!
The current bailout plan is seriously
flawed because it fails to comprehensively address underlying causes. It does not focus on the most effective ways
of recapitalizing banks, and it does not help people who face foreclosure on
their homes. It does not include
adequate regulation or oversight. It
does not restore good banking protections that were contained in the
well-designed 1933 Glass-Steagall Act, which was repealed in 1999. Nor does it modify the most disastrous
provisions of the Commodity Futures Modernization Act of 2000, which served to
get us into this sad state of affairs in the first place.
Franklin D.
Roosevelt, struggling to handle the challenges of the Great Depression, said
this: “It is common sense to take a
method and try it. If it fails, admit it
frankly and try another. But above all,
try something.” He
also said, “In our seeking for economic and
political progress, we all go up -- or else we all go down.” In these two twin sentiments lie the essence
of a better plan.
A crisis like this helps to stimulate
discussions and clarify problems, and thus to reveal potential solutions that
are better designed. The Bailout Blowup
had a silver lining because it gave us a short window of opportunity to focus
our attention on improving the emergency plan.
A clear alternative remedy now presents itself, one that was politically
infeasible a month ago, but will be provocatively possible in the near
future. We should tap into the giant
pool of wealth that our national policies have been so constantly focused on
creating in the past eight years. The
cost of the Bailout Plan could be almost financed in full by levying a wealth
surcharge of 5% on those who have a net worth of more than $10 million. Or we could create a new higher tax bracket,
retroactive to January 1, 2008, on all individual earnings above $500,000 per
year and on capital gains in excess of $5 million. If a change in taxation like this were made,
a great amount of money would become available to finance the unfreezing of
credit and to increase liquidity in our financial system and to bail out banks
or other corporations that would otherwise fail. Some innovative deal could be formulated to
appease the rich for this appropriation, even possibly making it a sound
investment for them.
Those invested in the stock market have
lost 5% in a single day on a number of occasions due to the spreading fear that
neither business nor government leaders are able to adequately solve the
challenges facing us. The funds raised
by a levy on the wealthy could be used to create an enterprise like FDR’s
Reconstruction Finance Corporation that would take a real equity stake in
failed corporations. Investors might
even be willing to buy into it, which would provide more capital. A small tax on every financial trade should
also be implemented to contribute to covering the cost of recapitalizing Wall
Street and supporting the Finance Corporation.
We should implement a bottom-up plan to
help homeowners who face foreclosure by empowering bankruptcy court judges to
force renegotiations of mortgage terms.
The outcome of such an initiative could be very positive for the overall
economy. We should not overlook the need
to boldly reassure municipal bond markets and find ways to make credit
available to them at lower rates so that states and counties and cities and
towns are able to finance crucially important voter-approved bond measures that
address vital local needs.
Such plans would be fair to Main Street as
well as Wall Street, and they would not involve rewards to those who took
‘moral hazard’ risks and bet badly. The
declines in global stock markets in the past month alone would have been plenty
to finance a robust curative solution (the U.S. stock market hit multi-year
lows on October 10, 2008). Equity values
will likely strongly and sustainably recover once a smart plan is instituted. Investor confidence will increase when it
appears that we actually have leaders at the helm who are creative,
intelligent, far-sighted, fair-minded and courageous.
Overarching Principles
While we are taking steps to solve this
crisis, it would be wise to adopt a progressive set of overarching principles
that recognize the necessity for us to implement a revolutionary ‘green
recovery’. The underlying goals should
be: (1) to wean ourselves from our
dangerous dependence on oil; (2) to
reward energy-savings in homes and fuel-efficiency in vehicles; (3) to create
attractive incentives that reverse trends toward suburban sprawl and the
construction of giant McMansions; (4) to invest in public schools and our
national infrastructure; (5) to protect the Earth’s ecological health and its
ability to provide us with vital ecosystem services; (6) to reduce greenhouse gas emissions that
are altering global weather patterns and the climate; and (7) to cut back on
our military spending and wars and occupations of other countries.
Let
the Big Picture Inform Our Actions: “The
Bet Situation”
We are in this harmful and dangerous economic crisis
because we have collectively bet badly.
Our nation bet that the best way for us to prosper is by accepting
unfettered competition and exploitive imperialism enforced by domineering
militarism. A better bet would have been
to create a sound economy based on fairness, sensibly regulated markets and an
overarching commitment to peaceful coexistence.
We have chosen leaders who bet perversely that a society that panders to
wealthy people and big corporations is the best way to organize our
economy.
A better bet would have been to adhere to more
egalitarian ideas that invest in the well-being of the middle class and do not
abandon the poor. We have bet that
short-term expediencies are acceptable, allowing the government to become
wasteful, bureaucratic and domineering, and allowing Big Business to promote a
hyper-stimulus of materialistic consumerism, deficit spending, a huge national
debt, the creation of unsustainable asset bubbles, and profligacy like that of
a drunken sailor. A better bet would
have been to respect precautionary economic principles and to honor progressive
understandings and initiatives like those listed in the One Dozen Big Initiatives to Positively Transform Our Societies (see
Part Four of the Earth Manifesto online).
A seventeenth Century French scientist named Blaise
Pascal formulated ideas that came to be known as the “Bet Situation”. The
Bet Situation is concerned with philosophical debates that have profound
practical implications regarding probabilities and the future. We are all
confronted with the Bet Situation in our lives because (1) there are
uncertainties, and (2) we are inextricably involved in the game. We
essentially gamble every time we choose one course of action over
another. Both actions and inactions are choices. We make choices whether or not we are
consciously aware of them. It is crucial for us, as well as for our
descendants, that we make better-informed decisions about the best courses of
action.
Common sense tells us that we should put our wagers
on the best outcomes and bet with the best probabilities. A summary of the 14 principal gambles that we
are collectively making is explored in Chapter #38 of Comprehensive Global Perspective – An Illuminating Worldview. Six of these gambles are highly relevant
to this rambling Blues Introspection discussion:
(1) We can
gamble that laissez-faire capitalism and stimulated growth and an endless
increase in consumption are the best for the robustness and health of the
economy and our societies. Or we can bet that to achieve a fair and
sustainable future, we must redesign our economies and use smart policies and
sensible regulations that safeguard our economy and reduce speculative excesses
as well as waste and profligate consumption.
(2) We can
continue to gamble that the distorted market doctrine of sink-or-swim Crony
Capitalism is the best economic system, and defend and protect it, allowing Big
Business to prosper at the expense of small businesses and the environment and
society as a whole. Or we can bet that a wise transformation to Green
Capitalism must be facilitated, and begin to enact bold and intelligent
initiatives that channel our collective activities into more wholesome
directions that help create better societies and a more secure world for
ourselves and our children.
(3) We can
gamble that inegalitarian injustices and domestic policies that facilitate the
concentration of wealth in the hands of a few are not a threat to social
stability and the general well-being. Or we can bet that the safest and
wisest investments of all are in social justice, affordable universal
education, equality of opportunity, resource conservation and peaceful
coexistence -- and act accordingly.
(4) We can
gamble that enabling the rich to become richer, while the middle class slowly
falls behind and the poor become poorer, will not result in more intense social
tensions, heightened insecurity, more powerful frustrations, worse crime,
terrorist impulses, or an increased impetus for revolution. Or we can bet
that encouraging more pronounced inequalities and bigger disparities of wealth
might have such consequences, and thus strive to enact fairer and more
farsighted and more humanitarian policies.
(5) We can
continue to gamble that aggressive militarism is the best way to achieve our
economic goals and national security. Or we can bet that aggression and
preemptive war policies are prohibitively costly and that it is wiser to
recognize that justice and peace are vitally important in the world, and
therefore dedicate more of our resources to improving our own society and
achieving greater mutual security through diplomatic conflict resolution and
the commitment to broader social justice.
(6) We can
gamble that the “Strict Father” constellation of beliefs are best, and defend
the status quo by following the regressive and power-abusing doctrines of
Neoconservatism and patriarchal dominion. Or we can bet that a renewed
respect for the constellation of “Nurturing Mother” values would create better
balanced public policies, and therefore choose to elect leaders whose
philosophies and policies honor these more progressive principles.
As alert readers may easily surmise, my perspective
is that the best bet we can make is to support far-sighted progressive ideas
that take into account the whole comprehensive breadth and depth of human
knowledge, expert understandings, scientific insights and spiritually
enlightened ‘truths’. To ensure that we make smarter gambles that are
fairer, more reasonable and more likely sustainable, we need to undertake
adaptive and broad-minded initiatives.
Insights
into the Treacherous Nature of Fraudulent Activities
Throughout
history it can be seen that stimulated speculation and inadequate regulation
lead to volatile markets, economic bubbles, and harmful collapses, and that
they are generally accompanied by fraud and corruption. Jonathan
Swift, in his popular classic satire Gulliver’s Travels, provided a
compelling perspective of fraud:
"The Lilliputians look upon fraud as a
greater crime than theft, and therefore seldom fail to punish it with death
(yikes!); for they allege that care and
vigilance, with a very common understanding, may preserve a man's goods from
thieves; but honesty has no fence
against superior cunning: and since it is necessary that there should be a
perpetual intercourse of buying and selling, and dealing upon credit, where
fraud is permitted or connived at, or hath no Law to punish it, the honest
dealer is always undone and the knave gets the advantage."
It should be an overarching goal of our
national economic policies to prevent fraud and opportunities for wide-scale
corruption. We should seek to achieve
the greater good by adhering to precautionary legislative principles that
prevent insiders from devising ever-more clever ways of facilitating
overly-risky speculation and fraud.
Commentary on Phil
Gramm, Deregulation, Derivatives and Infamy
It is high time that we find sound and fair
economic solutions to the credit crunch and the de-leveraging that is taking
place in international markets. In
addition to finding ways to stabilize the housing market and to unfreeze
credit, we also need to save the titanic market in “derivatives” from
implosion. Derivatives are
basically financial instruments that
help facilitate trade and business activities by spreading risk, so they are
critical to the smooth functioning of capital flows and other economic
activities.
Former Senator “nation of whiners” Phil
Gramm and his anti-regulation laissez-faire market fundamentalist friends are
responsible for having helped enact laws to deregulate the banking system and
“modernize” the market in derivatives and futures contracts and commodities
trading. In doing so, they violated lessons
learned in the Depression of the 1930s by eliminating sensible regulations and
oversight of financial activities and banking conglomerates and.
Financial derivatives include “credit
default swaps”, which are used as a form of insurance against bad loans. The market for these arcane instruments
reportedly exceeds $50 trillion, or 5 times as much as our entire annual gross
domestic product. In 2003, Warren Buffett famously called such
derivatives "financial weapons of mass destruction." We cannot ignore these risks, and should not
let them go unregulated any longer, for they may pose an even greater risk to
the stability of the economy than the mortgage-backed securities that have
plummeted in value as the housing bubble burst.
The dominant laissez-faire capitalist
worldview proclaims that it would be anathema to force people who could easily
afford to help pay for the bailout to actually be the ones required to do
so. This is why the Bailout Plan uses
debt financed by American taxpayers to put the cost and risk on Main Street
rather than on rich people and Wall Street investors. Powerful wealthy people dislike having to pay
taxes, and this is why they have used the power of their money to get
politicians elected who espouse principled-sounding but deceitful ideas like
the Trickle Down theory and the Supply Side theory that effectively cause
wealth to gush up to those who are already wealthy.
The Bailout Blowup came at a critical
moment in this severe global credit crisis.
Our leaders played a fascinating and invigorating game of Russian
roulette with fragile financial markets.
The House blowup gave us an opportunity to debate options for a few more
days, and our representatives could have chosen to solve the credit crisis in a
more responsible and fairer way. Still,
our political system is set up so that it always does the expedient thing, and
not necessarily the smart thing, so we squandered the opportunity and just
added more pork and tax cuts and perks instead of smart changes to the Bailout.
Dire urgency was used to get this bill
passed, and no doubt SOMETHING needed to be done, and soon. The rejection of the bailout plan came as a
nasty surprise that resulted in a record 778 point drop in the Dow Jones
average, the largest point drop in history.
The House legislative action came as an almost incidental rebuff to one
of the favorite scams of the illicit and incestuous marriage between
corporations and government by temporarily rejecting one of the most blatant of
profiteering gimmicks of them all: the
tactic of socializing costs and risks while allowing profits and benefits to
remain privatized.
The Bailout Blowup was a result not only of
ideological opposition but also of intensely partisan political posturing
during this election season. The Bailout
Bill is the effort of bought-and-paid-for politicians and ‘smartest guys in the
room’ insiders and market manipulators and economic shock-doctrine
opportunists. The proposal ran into two
primary buzz saws: (1) an emotional
hijacking of sharp partisanship, with Republicans angry at a speech by House
Speaker Nancy Pelosi about the culpability of the Bush Administration in
helping cause this crisis, and (2) deep skepticism of the bailout plan because
of strong public opposition to its sketchy and costly provisions. The plan was seen as giving the Treasury
Department far too much unaccountable power, and of helping Wall Street too
much without really helping people on Main Street.
Of Causes and
Consequences
Understanding the cause of the current
economic dilemma is valuable. Rash
gambles were encouraged by ‘bubble economic’ policies and the shredding of
government regulations. This
deregulatory enthusiasm was led by “mental recession” Republican Phil Gramm and
was aided by Fed Chairman Alan Greenspan and Bob Rubin, the Treasury Secretary
under President Bill Clinton.
Deregulation stimulated financial industry speculation. This industry is always hungry for bigger
profits to reward investors and to increase CEO bonuses. This stimulation of risk-taking unfortunately
led to foolish bets and an inevitable deflation of the housing bubble. As a result, the entire global financial
system has been destabilized, posing a serious threat to the foundations of the
rest of the real Main Street economy.
According to the wise
columnist and author Robert Kuttner, “The cycle of ignoring lessons of history
is speeding up. It took more than four
decades for American capitalism to forget the lessons of the great crash of
1929 and begin repeating the same abuses.
It took less than four years to forget the lessons of the crash of
2000.” This observation is made in a
compelling book whose title reveals the bottom-line problem of many of the
challenges we face: The Squandering of
America: How the Failure of Our Politics Undermines Our Prosperity.
Mark Twain once wrote, “It is not
worthwhile to try to keep history from repeating itself, for man's character
will always make the preventing of the repetitions impossible.” Sure, basic
human nature does not change. But this
is an even more compelling reason for us to structure our rules and regulations
well, and not to abandon them in times of zeal for the unleashing of
opportunists and gamblers, in good times or in bad. I recommend that readers
check out Naomi Klein’s The Shock
Doctrine: The Rise of Disaster Capitalism, and think about the current
situation in light of the historical perspectives and valuable insights that
this book contains.
A Time of Dangerous Opportunity
We are immersed in a severe economic crisis, so
uncertainty and fear abound. Suspicion
and distrust and a sudden heightened aversion to risk are like gravel thrown
into the gears of economic dealings, inhibiting trade, interfering with
rational financing, and disrupting the usual mechanisms for spreading risk and
recycling international trade dollars and facilitating normal commerce.
This is a time of dangerous opportunity. Things could be made radically better, or
radically worse. We could ensure that
they become better by adhering to intelligent policies and honoring fair-minded
principles and uniting in the common cause of creating a more sound economy and
a better world that is characterized by greater justice, more sustainable
activities, and a more committed solidarity of purpose in helping neighbors and
living together in peaceful coexistence.
On the other hand, it is well known that despotism
flourishes during times of crisis, uncertainty and insecurity. We must be vigilant to safeguard against
threats posed by the “right wing” and its authoritarian,
any-means-are-justified-to-accomplish-the-end tactics. Threats to our liberties, our democracy and
system of justice are heightened by this crisis, dashing hopes for fairer
opportunities and general prosperity.
We must heed the
words of Thomas Jefferson, the third President of the United States and
principal author of the Declaration of Independence:
“…
should we wander from these principles in moments of error or of alarm, let us
hasten to retrace
our steps and to regain the road which alone
leads to peace, liberty and safety.”
These observations about the right wing are not
random conspiracy theories. They are a
reflection of an incisive knowledge of history and of an awareness of human
nature as manifested in the character of human societies. The crisis in which we suddenly find
ourselves has been engineered by laissez-faire economic fundamentalists who
oppose government regulations and oversight.
These shrewd ideologues know that opportunities for profit are
significantly increased when economic activities are inflated through
stimulative easy credit and encouraged debt leveraging and obscured financial
dealings and lax oversight and minimized government supervision and generally
hyped-up opportunities for speculation.
Inadvertently or intentionally, shrewd operative have created a state of
affairs that threatens the entire global economy. Give us a break!
Milton Friedman once
said: “Only a crisis -- actual or perceived -- produces real change. When that crisis occurs, the actions that are
taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies,
to keep them alive and available until the politically impossible becomes
politically inevitable.” Naomi Klein
compellingly points out that crises tend to provide Machiavellian opportunities
for domination and harm to be inflicted “all at once”. I strongly encourage people to read her book The Shock Doctrine for more extensive
insights into the nefarious ambitions of the people who pull the strings behind
the curtain of economic and political intrigue.
The circumstances that surround the banking bailout in September 2008
are frightening for the lack of oversight proposed and for the ‘fox in the
henhouse’ nature of letting the financial industry set the terms of this, the
biggest government bailout in history.
One goal of the Earth Manifesto is to provide a
different and more progressive set of ideas “lying around”. These are socially more advantageous ideas
that will help guide us to choices that radically improve our societies for the
vast majority, rather than making them better only for a small group of
insiders and manipulators and authoritarian control freaks and wealthy people,
who are the ones who usually benefit from economic fundamentalist machinations
like those advocated by Milton Friedman.
Good Governance Means
Good Management
Ironically, the financial crisis was
created in the first place by ideologues who opposed taxes and regulation, and
who zealously promoted the unleashing of unfettered capitalism and uncontrolled
financial speculation and reduced supervision of the banking industry. The odd thing about this type of “casino
capitalism” and the bailout plan is that they do not institute far-sighted good
rules. Gambling in casinos, in contrast,
is governed by strict government regulations.
Gamblers in a casino would certainly prefer to ‘game’ in an establishment
where there are strict and fairly-understood rules and proper controls and protections
against cheating, casino dishonesty and pronounced conflicts of interest.
Our leaders have been mismanaging the
economy for years. They have planned
poorly and designed rules foolishly, and supported fiscally irresponsible
expediencies. They have done this to
promote a failing ideology that has at its core two basic quests that date to
the beginning of the Industrial Revolution:
(1) the attempt for capital to vanquish and disempower labor, and (2)
the ruse of creating opportunities for the upper class to exploit and
disenfranchise the middle class and the poor.
The U.S. has been driving a hard bargain
for the poor for decades by scolding them for lacking personal
responsibility. Spending has been
slashed in our welfare system, taxation has been made more regressive,
ever-harsher punishments have been imposed for victimless crimes and small-time
criminals, the collective bargaining power of working people has been reduced,
jobs have been moved overseas, slum dwellers have been forsaken, and corporate
prerogatives and profits have been encouraged that contribute to rapid
inflation in the costs of food, gasoline, electricity, rent, mortgages and
medical care. In contrast, no such
hard bargain for the rich has been tried.
Give us a break -- this is a democracy, folks! We’ve got ‘em outnumbered!
The rich have declared war on the rest of
us, but we can choose to even the playing field a bit by voting
intelligently. Left-leaning pundits say that “lap dogs of the corporatocracy” have
helped engineer this critical state of affairs.
They say that shills for industry are in some ways a million times worse
than the common thief who desperately robs a bank. These “lap dogs”, after all, have almost destroyed
the banks themselves in the name of speculative profit and laissez-faire
economic theories and anti-government righteousness. And in the name of these ideologies, they
have created a situation where re-regulation is required and Really Big
Government is being required to step in to the rescue. Ironic!
Perhaps it’s only one point of view that today’s financial turmoil is
caused by adherence to the radical ‘conservative’ ideology of
deregulation. One of the more intriguing
narratives that is propounded by conservatives holds that our current economic
woes actually stem from problems caused by a law passed during Jimmy Carter’s
Administration: the Community
Reinvestment Act. The
purpose of this law was to create affordable housing for people of modest
means, and to ensure that people who lived in
inner city areas and distressed rural communities have fair access to
credit. Some conservatives say it was
not speculators, greedy bankers, deregulators and politicians who caused the
financial meltdown, but poor people!
Liberals respond that this is a curious form of a Big Lie story, one
“that blames a despised, outcast social group for problems they had nothing to
do with, in order to aggrandize the ability of the dominant group to hate and
oppress.” Yikes! … Conservatives ignore
the fact that homes in foreclosure are fewer among people who got loans through
this Act. In this issue, the points of
view of liberals deserve more credence.
Anyone who objectively looks at the record
of the last eight years will see how irresponsible our national fiscal policies
have been. The Bush Administration has:
(1) caused large budget deficits and radically ramped up the national debt,
almost doubling it; (2) hyper-stimulated government spending; (3) encouraged
speculative leveraging, even though this significantly increased the risk of
bankruptcies and the destabilization of the entire global economy; (4) devoted
themselves wholeheartedly to tax cutting to primarily benefit the wealthy; (5)
weakened collective bargaining influence and taken other actions designed to reduce
the power of workers and erode middle class prosperity; and (6) indulged in an on-going effort to
allow big corporations to unsustainably exploit the planet’s natural resources,
damage the environment and externalize costs onto society. “Nice going, guys!”
An Odd Blue Ode
Oh Irony, you are a clever and alluring she-devil
And Cynicism, you are a skulking trickster
semi-friend
Must you visit us so insidiously and cruelly
together
And crash our party, sending us around an ominous bend?
It comes to this once again, as many times before
A crisis of confidence gives us our collective
comeuppance
And passion and certitude reveal themselves to be
lousy guides
Betrayed by reality that interrupts our fervent and drunken dance.
“Nothing in excess” declared the Oracle at Delphi
Yet “conservatives” bizarrely champion extremist
ideologies
Encouraging consumption, exploitation, gambling and
oppression without repent
Until a tipping point
ambushes us and destroys our cherished mythologies.
The True Nature of Our
Political Process
Ideological dogmas, swindles, greed and
hubris have led us to the brink of another serious economic depression. In the midst of an historic Presidential
election, the deceptions and hypocrisy of ringing slogans that declare “Country
First” are exposed like the proverbial emperor with no clothes. We see politicians grandstanding and trying
to hide naked facts and deny their prominent roles in this economic
debacle. They try to obfuscate what’s
really happening, and why.
These gambits make the failings of our
political system dramatically clearer.
Ruthless competition for political ascendancy has created a system in
which politicians demonstrate a hyper-partisan unwillingness to cooperate and
compromise. The inability to achieve
consensus is caused by a cynical exploitation of hot-button social issues,
dysfunctional relationships, obstinate dealings, ‘gotcha’ politics, dishonest
rationalizations in ‘blame game’ rhetoric, dirty-tricks campaigning, crony
capitalist corruption, a societal predilection for shallow sound-bite
communications and sloganeering, and ‘take-no-prisoners’ efforts to attain
political supremacy. Franklin Roosevelt
once said, “I am neither bitter nor cynical, but I do
wish there was less immaturity in political thinking.”
Our political process has failed us for a variety of
provocative reasons that are analyzed extensively in Earth Manifesto essays.
Politics should be about much more than power, money, and winning at any
cost. As the late Senator Paul Wellstone
of Minnesota once said, “Politics is about the improvement of people’s
lives. It’s about advancing the cause of peace and justice in our country
and in the world.” Well, it should be,
anyway!
The serious dysfunctionality of our political
process was highlighted by the dramatic failure of the first Bailout Bill. Congress tends to use practical but perverse
methods to craft almost every piece of legislation. Every bill evolves in a similar way: a disparate set of plans devised by vested
interest groups is thrown together with enough bells and whistles to please
conservatives and enough crumbs to bribe progressive-minded representatives
into signing on to give the legislation enough support to pass. New legislation is almost always fiscally
irresponsible, because the expediency of debt financing is too easy, and the
alternatives of finding ways to pay for new laws are too difficult and
unpopular. This is poor management, and
posterity will judge it harshly!
Our public policies are often designed to
sell the public on a narrow agenda, no matter how ill-advised it may be, and no
matter how shortsighted, unfair and un-American this agenda may prove to
be. The Bush White House in particular
has used permanent campaign tactics to promote its plans and its pet ideological
initiatives. The American people would
be much better served with honest communications, good governance, honorable
efforts to build consensus, fairness in planning, and bipartisan compromise. Alan Greenspan’s words
in The Age of Turbulence reverberate
with resonant validity:
“Compromise
on public issues is the price of civilization, not an abrogation of
principle.”
Greater
Good Goals
To achieve goals that are consistent with
the greater good, let’s use our understandings of human nature to establish
adaptive protections against abuses of power, cronyism, corrupt or incompetent
management, fraud and overly risky speculative excesses. We must work with human nature to
propitiously guide people by structuring our economic system so that strongly motivating
incentives are provided to motivate people to act in socially desirable ways,
and effective disincentives are used to discourage people from acting in
undesirable ways.
Every person has both virtues and vices
like generosity and greed, kindness and meanness, prudence and recklessness,
honesty and deceitfulness. Knowing this,
we can create a structure of governance in which greater good goals can be
achieved -- and NOT merely the narrow agendas of powerful people. Knowing this, we can focus on electing
representatives who are good managers, and who have good ideas and plans. Knowing how dysfunctional our political
process is, and why, we will be in a better position to reform it. Knowing how dangerous it is to have our
federal government run by ideological extremists, we should be able to
strengthen our laws and institutions to successfully keep those factions, which
perennially strive to control our societies, from having negative and
domineering political influence over us.
The three factions that we must guard against are: (1) hawkish war-enthusiast yahoos; (2) zealous profit-at-any-cost speculators,
and (3) retrogressive fanatics of the religious right.
Tax Cutting As Religion,
and Insights into Government
Deregulation may be one of the favorite
Republican doctrines, but the most cherished strategy in the Republican Party
playbook is to cut taxes. The
chickens are figuratively coming home to roost for our stubborn adherence to
this strategy, and the foxes, as always, are guarding the henhouse. Cutting taxes is actually the only real
Republican claim to populism; no one
likes to pay taxes. Republican
operatives figure that tax cuts are always a winning strategy, even though
circumstances are proving it to be hurting our economy and undermining our
national infrastructure and local and state governments and the social safety
net. Think about this carefully: there are five principal reasons that cutting
taxes is a shrewd but shortsighted strategy.
(1) The Republican Party gains popularity
by cutting taxes. This seems to be the
case no matter how regressive and tilted to the rich the tax cuts are, and
regardless of how fiscally and socially irresponsible this strategy may be.
(2) The action of reducing taxes allows
today’s wanton bubble of consumerism to be pumped up, and everyone seems
willing to deny the obvious fact that the inflation of this bubble is almost
certain to be coming at the expense of a ‘depletionary’ deflation of economic
growth for those in the future, with all the attendant woes and hardships that
such an outcome of squandered resources implies.
(3) Tax-cutting tactics invariably lead to
increased debt rather than balanced budgets.
Our representatives just seem constitutionally incapable of making
difficult decisions required to reduce government spending. Cutting taxes and increasing debt are shrewd
means for benefiting the financially most privileged people alive today at the
expense of all people in future generations.
And spending continues on its merry way, even for stupidly targeted
earmarks and misguided subsidies and wasteful programs and bureaucratic
inefficiencies and wars.
(4) Deficit spending has an inflationary
effect, and this tends to devaluate our currency. Inflation is a way to make debt repayable in
cheaper dollars, but the unintended consequences of this expediency have
detrimental impacts on millions of people.
(5) Budget deficits and increases in
national debt that result from tax cuts make our government less financially
secure, so in a backhanded way they will eventually thwart pesky bleeding-heart
Big Government liberals and force deep cuts in social spending. And voila! -- this tactic will undermine
social programs, which just happen to be the most cherished populist strategy
in the Democratic Party playbook! Holy
cow, Batman! Holy crap, Robin! Holy cynicism, Dark Knight!
The Proper Role of
Government in Our Lives
To figure our where we go from here, it
helps to have a clear Big Picture understanding of our society and the role
that the government plays in our lives. The proper role of the federal government can best be
understood by viewing it from the perspective of the three principal arenas in
which government has influence: namely,
in the areas of freedom, opportunity, and security. Ideally, government should be minimally
involved in interfering with people’s freedoms; it should be actively engaged in
ensuring fairness of opportunity and legal justice; and it should be strongly and properly
involved in making people secure and safe from internal and external
threats.
In other words, the
government should act steadfastly to help assure liberties and human
rights; it should NOT be an agent that
unduly infringes upon them. The
government should involve itself in fairly adjudicating between competing
interests. It should act as an impartial
referee, and NOT abandon the playing field to socially irresponsible and
unscrupulous and exploitive and short-term-oriented interest groups and
gamblers. And government should honestly
strive to make its citizens safer and more secure, NOT to intimidate them,
oppress them, deceive them, or erode the underpinnings of general
prosperity. It should also avoid making
war on people in other countries for unjust, unethical and wrongheaded
purposes.
What characterizes our
government today? It’s
“backasswards”! Big Brother meddles with
our freedoms and interferes with our civil liberties, and it too often strives
to socially engineer society into narrow, antiquated and puritanical visions of
propriety. It spies on citizens. It disengages from important duties like
properly regulating banks, extractive industries and big businesses. It allows lobbyists to write the provisions of
most proposed laws to the detriment of the greater good. It bureaucratically and gullibly bumbles by
allowing vested interests to abuse power and exploit people in order to profit
at the expense of workers and taxpayers.
It prosecutes those involved in victimless crimes. It indulges in lies of omission and selective
distortions of information, as if equivocation, prevarication and
tergiversation were healthy modes of communication. And it blatantly acts as a military aggressor
that mismanages international affairs, uses fear and ideologically specious
arguments to advance foreign policies that cause mutual insecurity and terrible
collateral damage. These courses of
action basically make the American people and our allies and ‘enemies’ less
safe, so they are dangerous policies.
We’ve been sold
this bill of goods by shrewd bait-and-switch opportunists who have
manipulatively exploited people’s fears and used divisive hot-button wedge
issues to gain power. The subsequent
abuse of power is like a crusade to suppress precautionary voices and eliminate
sensible regulation, oversight, supervision, accountability, intelligent
pragmatism and hopes for peaceful coexistence.
What chicanery!
Some wily
feminists and others say that this is a quest for Strict Father dominion and
Almighty profit that gives fawning obeisance to Mammon, the false god of
avarice and wealth and materialistic consumerism. Let’s NOT let it be!
“Cheer Up, Things Could Be Worse”
Let us not feel ‘blue’ about our current
dilemma. Let us instead act to make a
positive difference in the world. Change
can be good or bad, for better or for worse.
Progressive change is much more desirable than regressive change. I highly recommend that readers check out the
Progressive Agenda for a More Sane
Humanity in Part Four of the Earth Manifesto. Many dozens of good ideas
are provided there that could help make our world fairer, safer and more
sustainable.
I think again of a T-shirt that I saw at a
soulful blues festival that proclaimed, “Rebel against something, because
everything ain’t right.” We all can make
a difference, and it would be good for our well-being and our souls if we all
took a single step in the right direction.
It just happens to be that the right direction is NOT the far-right
direction!
Lyrics from The Eve of Destruction (Barry McGuire, 1965):
When
human respect is disintegratin’
This whole crazy world is just too
frustratin’ …
The poundin’ of the drums, the pride and disgrace …
Hate
your next-door neighbor, but don’t forget to say grace
And you tell me over and over and over and
over again, my friend
You
don’t believe we’re on the eve of destruction.
Lyrics from The Dawn of Correction (The Spokesman, 1965):
There are buttons to push in too many nations,
but
who’s crazy enough to risk annihilation?
The
buttons are there to insure negotiation,
so don’t be afraid, boy, it’s our only
salvation …
Be thankful our country allows demonstrations
Instead of condemnin’, make some
recommendations
Negotiation is our only salvation …
So over and over again, you keep sayin’
it’s the end
But I say you’re wrong, we’re just on the dawn of correction.
California Leads the
Way?
The Republican legislative minority in California
recently delayed the annual state budget for the longest period in
history. And presto! -- when everyone
finally agreed to a budget, it contained yet another ill-conceived
kick-the-problem-down-the-road solution, a provision to borrow more money instead
of enacting any new taxes or cutting spending.
And the absurd catch is that the planned borrowing is from future
hoped-for profits from the state lottery. This strategy basically saddles those who buy
lottery tickets, who are mainly those with lower incomes, with the costs of
closing large deficits.
In other words, the solution did NOT
involve borrowing it from, or assessing it to, the people who can actually
afford it! This solution is once again a
short-term-oriented, greed-driven, stubbornly special-interest-pandering and
therefore dumb approach to deal with fiscal shortfalls. I’ll bet we could devise a much better plan
with a Civil Grand Jury of citizens who would be assigned the responsibility of
studying economic problems and historical causes and effects, and then making
recommendations, or an independent panel of renowned non-partisan economists
who have studied different systems around the world. Politics!
Ideologies Have Met
Reality, and What Should We Believe In Now?
Franklin Roosevelt said the following,
which has created waves and reactionary resistance ever since: “Here
is my principle: taxes shall be levied
according to ability to pay. That is the
only American principle.” Hmmm … seems
more like a European principle, and a socially wise one. Then again, conservatives have construed
progressive tax plans to be a socialistic danger to civilization. They equate such tax plans with communism,
and our national Cold War brainwashing still gives most folks a potent charge
against ideas like this. In the epic
struggle between capital and labor, capital has temporarily gained ascendant
sway, but this is proving to be so harmful to society that the pendulum must
begin to swing back toward the middle, and it almost certainly will -- in the
next presidency. We cannot continue to
undermine tens of millions of Americans in the middle class merely for the
purpose of giving bigger benefits to the upper class.
Republicans have made “taxes” one of the
repugnant words in the English language. The outcome of this shrewdly ideological
stubbornness is tantamount to tragedy when it is coupled with irresponsible
borrow-to-spend tactics and hyper-partisan politicking that characterizes
Washington D.C.
The upshot of the above observations about
the purposes of government is this: it
costs money to run the government. Since
there are valid and important reasons to have government, it is imperative for
us to assess enough money to finance it.
We should pay as we go. Such an
idea would radically alter our spending and taxation strategies, and force our
elected representatives to make more courageous decisions that are required of
good governance. We urgently need good
managers to run the government who clearly recognize the need to create fair
and sensible ground rules in our society.
There are both good and bad aspects of
government. Everyone knows its
undesirable characteristics: it tends to
become bureaucratic, red-tape-bound, wasteful, autocratic, and intrusive on
individual rights and freedoms. Can we
change it? Yes, we can!
Let’s Elect New Leaders,
and Throw Out the Bums Who Have Betrayed Us!
The change we need involves common sense,
intelligence, courage, interpersonal skills, good communication and honesty to
effectively navigate the battlefield of conflicting interests. I feel strongly that Barack Obama offers the
best probability of being able to lead our nation in the right direction. My reasons for believing this are summarized
in the Twelve Compelling Reasons to Elect
Barack Obama, NOT John McCain.
In these
turbulent times, we should make no mistake about it: our economy is resilient, and this unsettling
episode too shall pass. Fear and
exuberance ebb and flow with the expansions and contractions in markets that
are such distinct features of capitalist market economies. We should not forget Franklin D. Roosevelt’s
wise observation: “Let me assert my firm
belief that the only thing we have to fear is fear itself.” One day these times will seem like a long
time ago, and paralyzing fears will have given way to confidence in a better
modus operandi.
Immersed in the on-rush of change, clarity
is clearly difficult to achieve. But
change is the only certainty, so let’s choose positive, progressive
change! And say, don’t we live in interesting
times?!
Thanks for giving these ideas your
consideration!
Truly,
Dr. Tiffany B. Twain
Hannibal, Missouri
October 16, 2008
Postscript:
Michael Moore’s Ten Point Plan (October 1, 2008)
The ever-inventive Michael Moore polled a
number of economists and came up with a compelling Ten Point Plan to save the
economy. It contains some provocative
ideas and interesting observations. I
have appended this plan below for readers’ reference and entertainment. In summary, his plan is this:
(1)
Have the rich pay for bailouts.
He provides a good variety of proposals.
(2)
Bail out the people who are losing their homes to foreclosure.
(3)
Give the government, in its capacity as the representative of taxpayers,
an equity stake in all banks and insurance companies that it bails out.
(4)
Restore sensible regulations relating to banks, and ensure strong
oversight and enforcement in all bailouts.
(5)
Enforce monopoly and anti-trust laws to keep companies from getting “too
big to fail”.
(6)
Limit the compensation of top executives of all big corporations.
(7)
Increase the bank deposit guarantees of the FDIC, and find ways to
protect people’s retirement funds.
(8)
Don’t let fear rule the day. The
economy is resilient, and the sky is not falling.
(9) Create a National People’s Bank that
will allow profits to be shared with customers rather than just corporate CEOs
and Wall Street investors.
(10)
And lastly, the first item on Michael Moore’s in-your-face list: criminally prosecute everyone who knowingly
contributed to the economic crisis.
Ha! Fat chance!
Michael Moore’s Ten
Point Plan
Friends,
The richest 400
Americans -- that's right, just four hundred people -- own MORE than the
bottom 150 million Americans combined.
So 400 rich Americans have got more stashed away than half the entire
country! Their combined net worth is
$1.6 trillion. During the eight years of
the Bush Administration, their wealth has increased by nearly $700 billion --
the same amount that they are now demanding we give to them for the
"bailout." Why don't they just
spend the money they made under Bush to bail themselves out? They'd still have nearly a trillion dollars
left over to spread among themselves!
Of course, they are not
going to do that -- at least not voluntarily.
George W. Bush was handed a $127 billion surplus when Bill Clinton left
office. Because that money was OUR money
and not his, he did what the rich prefer to do -- spend it and never look
back. Now we have a $9.5 trillion
debt. Why on earth would we even think
of giving these robber barons any more of our money?
I would like to propose
my own bailout plan. My suggestions,
listed below, are predicated on the singular and simple belief that the rich
must pull themselves up by their own platinum bootstraps. Sorry, fellows, but you drilled it into our
heads one too many times: There... is...
no... free... lunch. Thanks for
encouraging us to hate people on welfare!
So, there will be no handouts from us to you …
It is clear that we
cannot simply keep protesting without proposing exactly what it is we think
Congress should do. So, after consulting
with a number of people smarter than Phil Gramm, here is my proposal, now known
as "Mike's Rescue Plan." It
has 10 simple, straight-forward points. They are:
1. APPOINT A SPECIAL
PROSECUTOR TO CRIMINALLY INDICT ANYONE ON WALL STREET WHO KNOWINGLY CONTRIBUTED
TO THIS COLLAPSE. Before any new money
is expended, Congress must commit, by resolution, to criminally prosecute
anyone who had anything to do with the attempted sacking of our economy. This means that anyone who committed insider
trading, securities fraud or any action that helped bring about this collapse
must go to jail. This Congress must call
for a Special Prosecutor who will vigorously go after everyone who created the
mess, and anyone else who attempts to scam the public in the future.
2. THE RICH MUST PAY FOR
THEIR OWN BAILOUT. They may have to live
in 5 houses instead of 7. They may have
to drive 9 cars instead of 13. The chef
for their mini-terriers may have to be reassigned. But there is no way in hell, after forcing
family incomes to go down more than $2,000 dollars during the Bush years, that
working people and the middle class are going to fork over one dime to
underwrite the next yacht purchase.
If they truly need the
$700 billion they say they need, well, here is an easy way they can raise it:
a) Every couple
who makes over a million dollars a year and every single taxpayer who makes
over $500,000 a year will pay a 10% surcharge tax for five years. (It's the Senator Sanders plan. He's like Colonel Sanders, only he's out to
fry the right chickens.) That means the
rich will still be paying less income tax than when Carter was president. This
will raise a total of $300 billion.
b) Like nearly
every other democracy, charge a 0.25% tax on every stock transaction. This will
raise more than $200 billion in a year.
c) Because every
stockholder is a patriotic American, stockholders will forgo receiving a
dividend check for one quarter and instead this money will go the Treasury to
help pay for the bailout.
d) 25% of major
U.S. corporations currently pay NO federal income tax. Federal corporate tax revenues currently
amount to 1.7% of the GDP compared to 5% in the 1950s. If we raise the corporate income tax back to
the level of the 1950s, that gives us an extra $500 billion.
All of this combined
should be enough to end the calamity.
The rich will get to keep their mansions and their servants, and our
United States government ("COUNTRY FIRST!") will have a little
leftover to repair some roads, bridges and schools.
3. BAIL OUT THE PEOPLE
LOSING THEIR HOMES, NOT THE PEOPLE WHO WILL BUILD AN EIGHTH HOME. There are 1.3 million homes in foreclosure
right now. That is what is at the heart
of this problem. So instead of giving
the money to the banks as a gift, pay down each of these mortgages by
$100,000. Force the banks to renegotiate
the mortgage so the homeowner can pay on its current value. To insure that this help does no go to
speculators and those who have tried to make money by flipping houses, this
bailout is only for people's primary residence.
And in return for the $100K paydown on the existing mortgage, the
government gets to share in the holding of the mortgage so that it can get some
of its money back. Thus, the total
initial cost of fixing the mortgage crisis at its roots (instead of with the
greedy lenders) is $150 billion, not $700 billion.
And let's set the record
straight. People who have defaulted on
their mortgages are not "bad risks."
They are our fellow Americans, and all they wanted was what we all want and
most of us still get: a home to call their own.
But during the Bush years, millions of them lost the decent paying jobs
they had. Six million fell into
poverty. Seven million lost their health
insurance. And every one of them saw
their real wages go down by $2,000.
Those who dare to look down on these Americans who got hit with one bad
break after another should be ashamed.
We are a better, stronger, safer and happier society when all of our
citizens can afford to live in a home that they own.
4. IF YOUR BANK OR
COMPANY GETS ANY OF OUR MONEY IN A "BAILOUT," THEN WE OWN YOU. Sorry, that's how it's done. If the bank gives me money so I can buy a
house, the bank "owns" that house until I pay it all back -- with
interest. Same deal for Wall Street. Whatever money you need to stay afloat, if
our government considers you a safe risk -- and necessary for the good of the
country -- then you can get a loan, but we will own you. If you default, we will sell you. This is how the Swedish government did it and
it worked.
5. ALL REGULATIONS MUST
BE RESTORED. THE REAGAN REVOLUTION IS
DEAD. This catastrophe happened because
we let the fox have the keys to the henhouse.
In 1999, Phil Gramm authored a bill to remove all the regulations that
governed Wall Street and our banking system.
The bill passed and Clinton signed it.
Here's what Sen. Phil Gramm, McCain's chief economic advisor, said at
the bill signing:
"In the
1930s ... it was believed that government was the answer. It was believed that stability and growth
came from government overriding the functioning of free markets. We are here today
to repeal [that] because we have learned that government is not the
answer. We have learned that freedom and
competition are the answers. We have
learned that we promote economic growth and we promote stability by having
competition and freedom. I am proud to
be here because this is an important bill; it is a deregulatory bill. I believe that that is the wave of the
future, and I am awfully proud to have been a part of making it a reality.
This bill must be
repealed. Bill Clinton can help by leading
the effort for the repeal of the Gramm bill and the reinstating of even tougher
regulations regarding our financial institutions. And when they're done with that, they can
restore the regulations for the airlines, the inspection of our food, the oil industry,
OSHA, and every other entity that affects our daily lives. All oversight provisions for any
"bailout" must have enforcement monies attached to them and criminal
penalties for all offenders.
6. IF IT'S TOO BIG TO
FAIL, THEN THAT MEANS IT'S TOO BIG TO EXIST.
Allowing the creation of these mega-mergers and not enforcing the
monopoly and anti-trust laws has allowed a number of financial institutions and
corporations to become so large, the very thought of their collapse means an
even bigger collapse across the entire economy.
No one or two companies should have this kind of power. The so-called "economic Pearl
Harbor" can't happen when you have hundreds -- thousands -- of
institutions where people have their money.
When you have a dozen auto companies, if one goes belly-up, we don't
face a national disaster. If you have
three separately-owned daily newspapers in your town, then one media company
can't call all the shots (I know... What am I thinking?! Who reads a paper anymore? Sure glad all those mergers and buyouts left
us with a strong and free press!). Laws
must be enacted to prevent companies from being so large and dominant that with
one slingshot to the eye, the giant falls and dies. And no institution should be allowed to set
up money schemes that no one can understand.
If you can't explain it in two sentences, you shouldn't be taking
anyone's money.
7. NO EXECUTIVE SHOULD
BE PAID MORE THAN 40 TIMES THEIR AVERAGE EMPLOYEE, AND NO EXECUTIVE SHOULD
RECEIVE ANY KIND OF "PARACHUTE" OTHER THAN THE VERY GENEROUS SALARY
HE OR SHE MADE WHILE WORKING FOR THE COMPANY.
In 1980, the average American CEO made 45 times what their employees
made. By 2003, they were making 254
times what their workers made. After 8
years of Bush, they now make over 400 times what their average employee
makes. How this can happen at publicly
held companies is beyond reason. In
Britain, the average CEO makes 28 times what their average employee makes. In Japan, it's only 17 times! The last I heard, the CEO of Toyota was
living the high life in Tokyo. How does
he do it on so little money? Seriously,
this is an outrage. We have created the
mess we're in by letting the people at the top become bloated beyond belief
with millions of dollars. This has to
stop. Not only should no executive who
receives help out of this mess profit from it, but any executive who was in
charge of running his company into the ground should be fired before the
company receives any help.
8. STRENGTHEN THE FDIC
AND MAKE IT A MODEL FOR PROTECTING NOT ONLY PEOPLE'S SAVINGS, BUT ALSO THEIR
PENSIONS AND THEIR HOMES. Barack Obama
was correct yesterday to propose expanding FDIC protection of people's savings
in their banks to $250,000. But this
same sort of government insurance must be given to our nation's pension
funds. People should never have to worry
about whether or not the money they've put away for their old age will be
there. This will mean strict government
oversight of companies who manage their employees' funds -- or perhaps it means
that the companies will have to turn over those funds and their management to
the government. People's private
retirement funds must also be protected, but perhaps it's time to consider not
having one's retirement invested in the casino known as the stock market. Our government should have a solemn duty to
guarantee that no one who grows old in this country has to worry about ending
up destitute.
9. EVERYBODY NEEDS TO
TAKE A DEEP BREATH, CALM DOWN, AND NOT LET FEAR RULE THE DAY. Turn off the TV! We are not in the Second Great
Depression. The sky is not falling. Pundits and politicians are lying to us so
fast and furious it's hard not to be affected by all the fear mongering. Even I, yesterday, wrote to you and repeated
what I heard on the news, that the Dow had the biggest one day drop in its history.
Well, that's true in terms of points, but its 7% drop came nowhere close
to Black Monday in 1987 when the stock market in one day lost 23% of its
value. In the '80s, 3,000 banks closed,
but America didn't go out of business.
These institutions have always had their ups and downs and eventually it
works out. It has to, because the rich
do not like their wealth being disrupted!
They have a vested interest in calming things down and getting back into
the Jacuzzi.
As crazy as things are
right now, tens of thousands of people got a car loan this week. Thousands went to the bank and got a mortgage
to buy a home. Students just back to
college found banks more than happy to put them into hock for the next 15 years
with a student loan. Life has gone
on. Not a single person has lost any of
their money if it's in a bank or a treasury note or a CD. And the most amazing thing is that the
American public hasn't bought the scare campaign. The citizens didn't blink, and instead told
Congress to take that bailout and shove it.
THAT was impressive. Why didn't
the population succumb to the fright-filled warnings from their president and
his cronies? Well, you can only say
'Saddam has da bomb' so many times before the people realize you're a lying
sack of shite. After eight long years,
the nation is worn out and simply can't take it any longer.
10. CREATE A NATIONAL
BANK, A "PEOPLE'S BANK." If we
really are itching to print up a trillion dollars, instead of giving it to a
few rich people, why don't we give it to ourselves? Now that we own Freddie and Fannie, why not
set up a people's bank? One that can
provide low-interest loans for all sorts of people who want to own a home,
start a small business, go to school, come up with the cure for cancer or
create the next great invention. And now
that we own AIG, the country's largest insurance company, let's take the next
step and provide health insurance for everyone.
Medicare for all. It will save us
so much money in the long run. And we
won't be 12th on the life expectancy list.
We'll be able to have a longer life, enjoying our government-protected
pension, and living to see the day when the corporate criminals who caused so
much misery are let out of prison so that we can help re-acclimate them to
civilian life -- a life with one nice home and a gas-free car that was invented
with help from the People's Bank.
Yours,
Michael Moore
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