Economic Recovery: What We Need Right Now
We are governed in every aspect of our lives by the idea that the chimeric gods of the financial Olympus represented by the name Wall Street are relevant to the lives of every day citizens when in fact they are no more relevant than the number of suckers at the tables of Las Vegas, Atlantic City, and reservation casinos or the rate of participation in the government-sanctioned numbers rackets known as state lotteries. Or as Steig Larsson (author of the excellent Millenium trilogy) put it: “It doesn’t have a thing to do with reality or the economy.”
The current so-called “debt crisis” has been imposed upon the governments of the world by a web of financial markets—including stock exchanges and brokerages, commercial and investment banks, insurance companies, credit and finance companies—running rampant with speculation, fraud, irresponsibility, avarice, and selfish ambition.
They appeal to the governments of the world to be bailed out of the quagmire they have created for themselves by cutting back spending on programs and infrastructure which benefit the general welfare in order to provide a life-raft for an industry of proven detriment to the 99 percent of the population.
They are asking us to finance their gambling habit.
News organizations are fond of quoting the daily figures from the nation’s and the world’s stock markets as if those are in any way relevant to the economic health of either the nation or of the world. The USA is supposed to be in a recovery because more of the 1 percent are throwing around money at the stock market crap tables and meanwhile 8.9 percent are unemployed. How is that not a recession?
In 1980, future POTUS George H.W. Bush called Reagan’s supply-side/Hoover’s trickle-down/the Gilded Age’s horse-and-sparrow economic “theory” what it really is: voodoo economics. But then all economics is voodoo.
Economists, those faithful believers in the Almighty Invisible Hand (a major reason why economics is a liberal art rather than a social science), are predicting a “mild recession” for Europe in 2012, as if 10.7 percent current unemployment does not mean that Europe has been in a “recession” since 2007.
No recession? Ask the citizens of Greece, Spain, Portugal, Italy, France, and Ireland if they feel prosperous right now.
The neoliberal program of the Washington Concensus that has governed domestic policy of every administration, including the current one, since 1981 (economic liberalization, open markets, abolition of tariffs, turning governmental functions over to private corporations, deregulation of industry and finance, slashing of support for higher education, a prominent public role for the private sector, and destruction of organizations of the working- and middle-classes), has but one inevitable goal, pursuing invariably the same object:
To give the private sector, Corporate America, the main role in forming economic and social policy and make it the de facto—unelected though of course most powerful—fourth branch of American government.
Just to review: the top 1 percent (3,130,000 individuals) in this country and in every other in the world, the Third Estate, control 60 percent of the wealth of the country, leaving a mere 40 percent of the wealth for the bottom 99 percent (309,870000 individual citizens) over which they sit.
At the apex of this Third Estate are the 400 richest persons in America (0.000001 percent of the population), who themselves alone have as much as the bottom 156,500,000 people (50 percent of the population), approximately the same number as the poor in our country according to the 2010 census. Which still leaves a tremendous amount of wealth and power for the other 0.999999 percent of the total U.S. population (3,129,600 individuals) who make up the rest of Third Estate.
The top 10 percent of the bottom 99 percent majority make up what Marx called the petite, or petty, bourgeoisie, and perform the same function among their fellow 99 percenters as Malcolm X’s house slaves did among their fellow slaves in the field. They are also equally in denial about their true status.
The target audience of the Koch brothers and their friends is not the pawns in their Tea Party movement but the house slaves of the 10 percent just below them on the socio-economic ladder. It is to that same 10 percent which the mainstream media acts as cheerleaders and sycophants as they praise the financial imperial collective about how beautiful its new clothes are.
In America, of course, social barriers are more porous and fluid, and many of the 1 percent and the 10 percent stand on the side of the remaining 89 percent. Perhaps as big a percentage as those in that 89 percent who see themselves as temporarily embarrassed rich rather than poor.
It was against this onslaught, this idea that the 99 percent would have to pay for the profligate waste of a sizable portion of the 10 percent for the benefit of the 1 percent, that Occupy Wall Street was born, striking out blindly, knowing intuitively and instinctively that something is wrong, where it is wrong, but without having the knowledge and vocabulary to say what that is.
Meanwhile, the brokers, financiers, business executives, and brokers sipped champagne in their balconies overlooking the sidewalk and took pictures of the marching masses while ridiculing them for their ignorance and presumed inability to articulate exactly what the target of their anger was, calling out “Eat some cake!”
Occupy the SEC (Securities and Exchange Commission rather than Southeastern Conference) changed all that with its 360-page commentary on the damage done to the nation since the protections of the Glass-Stiegall Banking Act of 1933 were progressively destroyed by the acolytes of the Washington Concensus.
By the way, neoliberalism now governs the domestic policies of nearly every nation around the world, including those who hate the “Great Satan” and the rest of the West. Take the Islamic Republic of Iran, for example, where every president since Ali Akbar Hashemi Rafsanjani in 1989 (through his successor Mohammad Khatami and the current Mahmoud Ahmadinejad) has followed the same neoliberal policies.
Some have pointed to the failing economies of Europe as an example of how states that provide an adequate social welfare net for their people are doomed to failure. What these commentators fail to admit is that the economies of those nations are failing because their governments adopted the policies popularized by Margaret Thatcher, Ronald Reagan, John Major, Bill Clinton, and Tony Blair.
Here are my own personal prescriptions for what needs to be done, as a start:
To start off with, the structure of the United Nations needs to be significantly altered because it current antiquated design dates from the days it began as the World War alliance against the Axis. The first reform the UN needs is to remove the veto from the five permanent members of the Security Council.
Now, to save the U.S. and return it to a semblance of the prosperity it saw during the Golden Age of Capitalism:
Pass Amendment XXVIII to the U.S. Constitution abolishing the doctrine of corporate personhood and thereby reversing the corruption of our legal system stretching from Pembina Consolidated Silver Mining Company v. State of Pennsylvania in 1888 to Citizens United v. Federal Election Commission in 2010.
Pass Amendment XXIX to the Constitution abolishing the Electoral College and allowing for the direct election of the President.
Abolish voter photo ID laws nationwide as a form of poll tax, by FEC fiat if possible, by federal legislation if necessary.
Prohibit insider trading by Members of Congress. Require that all stocks and bond holdings be put in trust for the duration of their time in Congress.
Prohibit former Members of Congress and federal officials both military and civil from working as lobbyists for at least 10 years after leaving office.
Start enforcing the Interstate Commerce Act of 1887, the Sherman Antitrust Act of 1890, the Clayton Antitrust Act of 1914, and the Robinson-Patman Anti-Price Discrimination Act of 1936, the Celler-Kefauver Anti-Merger Act of 1950, and the Hart–Scott–Rodino Antitrust Improvements Act of 1976. Treat anitrust provisions of the U.S. Code as if it were actual law rather than mere suggestions or recommendations. Which they are.
Repeal the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 which made it far harder for consumers to discharge debts through declaration of bankruptcy.
Enact a law to overturn SCOTUS’s decision in Kelo v. City of New London of 2005 allowing personal property to be seized under eminent domain by public government for the commercial profit of private corporations.
Repeal the rule issued by the Federal Office of the Comptroller of the Currency in 2004 which preempted states from applying most of their credit laws to national banks and their subsidiaries.
Repeal the American Homeownership and Economic Opportunity Act of 2000 which made it harder for consumers to get out of lender-required insurance.
Repeal the Commodity Futures Modernization Act of 2000 which deregulated over-the-counter derivatives trading.
Repeal the Gramm-Leach Financial Services Modernization Act of 1999 which gutted the remaining protections established by the Glass-Steagall Banking Act of 1933.
Repeal the Office of Thrift Supervision rule of 1996 preempting all state laws regulating savings and loan credit activities.
Repeal the Economic Growth and Regulatory Paperwork Reduction Act of 1996 which loosened supervisory regulations over financial institutions and lessened creditor liability.
Repeal the McCollum Truth in Lending Class Action Relief Act of 1995 which eased regulations on creditors and made it more difficult to sue for securities fraud.
Repeal the Interstate Banking and Branching Efficiency Act of 1994 which abolished the Bank Holding Company Act prohibition against a bank holding company in one state acquiring a bank headquartered in another state.
Repeal the Alternative Mortgage Transactions Parity Act of 1982 which allows adjustable rate mortgages, balloon-payment mortgages, interest-only mortgages, and option-ARM’s.
Repeal the Garn-St. Germain Depository Institutions Act of 1982 which deregulated the savings and loan industry and credit unions.
Repeal the Truth in Lending Simplification and Reform Act of 1980 which limited the information credit companies are required to disclose on interest rates and exempted creditors from liability in several cases.
Repeal the Garn Depository Institutions Deregulation and Monetary Control Act of 1980 which removed usury caps for mortgages, raised the bar for prosecuting lenders, forced all banks to obey the Federal Reserve, allowed banks to merge, removed the power of the Fed’s board of directors to set savings interest rates, and allowed credit unions and S&L’s to offer cheques and other banking services without regulatory safeguards.
T o prevent lenders from hiding in states with the weakest consumer protections, pass a law overturning SCOTUS’s decision in Marquette National Bank of Minneapolis v. First of Omaha Service Corporation which allowed banks to make loans in states other than where headquartered.
Repeal the Bank Holding Company Act of 1970 which allowed commercial banks, via holding companies, to both accept deposits and make commercial loans.
All of these actions will finally restore to consumers and the economy the protections which enabled the American economy to work for all as well as it did from 1946-1971 by restoring Glass-Stiegall to its proper place. This is the BARE MINIMUM that should be done.
There are, in addition, several other provisions I suggest:
Restore the Golden Age of Capitalism (1946-1971) system of 24 tax brackets, with a top marginal tax rate of 75 percent for the top bracket of $1,500,000 (the equivalent in today’s dollars) and over. Tax non-family farm estates at the same percentage, 75 percent of everything above $500,000 (likewise, the equivalent in today’s dollars).
Repeal the Taft-Hartley Labor and Management Relations Act of 1947 which limits the protections of the Fair Labor Standards Act of 1938 by allowing so-called “right-to-work” laws; prohibiting jurisdictional strikes, wildcat strikes, solidarity strikes, political strikes, secondary boycotts, mass picketing, closed shops, and monetary donations to federal campaigns; restricting union shops; authorizing the federal government to enact strike-breaking in the name of “national security”; and forbidding federal employees from striking.
Abolish “right-to-work” laws nationwide by federal law.
Make nondisclosure to Congress by the Federal Reserve of actions such as its 2008 $7,700,000,000,000 (7.7 trillion) no-interest loans to banks and financial institutions around the world punishable as a felony.
Abolish such easily abused financial vehicles as collateralized debt obligations, and leveraged buyouts. Pass a system of finance law guided by the provision that for the financial industry only that which is specifically allowed by law is permissible and that anything else is illegal and punishable by law.
Prosecute Standard and Poor’s, Moody’s, and Fitch’s under RICO for actions such as its extortion against the State of Georgia in 2002 and the State of North Carolina in 2003 to strong arm them (successfully, by the way) into repealing their anti-predatory lending laws, as well as its more recent actions the past year in the European Union.
Establish universal healthcare. America is the only industrialized country which does not have it. Our costs are higher, service lower, benefits more restricted.
Abolish Bill Clinton's “workfare for welfare” Temporary Assistance for Needy Families and bring back Aid to Families with Dependent Children and repeal all other programs intended to humiliate rather than help the poor.
Restore pre-Reagan era levels of funding for public institutions of higher education and support for tuition.
Establish a guaranteed income for all Americans. The last two prominent Americans to suggest this were Martin Luther King and Richard M. Nixon.
Reinstitute by law the Fairness Doctrine of 1949 which the FCC repealed by order of then President Ronald Reagan in 1987.
Abolish the filibuster in the Senate.
Abolish state laws dealing with immigration.
Restore USPS to cabinet status and federal financial backing.
Abolish “three (or two) strikes and you’re out” laws nationwide as cruel, inhuman, and irrational, as well as overly costly.
End trying juveniles as adults for any crime. Americans can’t legally drink until they’re 21 and in most states for an adult to have consensual sex with a person under age 18 is still considered statutory rape because the law judges those under 18 to not have developed sufficiently to make considered decisions.
Legalize all drugs currently under prohibition. The war on drugs is way too expensive, unending, harmful to more people, and futile.
End the war in Afghanistan by 2014. Close half our military bases world-wide.
And last but not least, punish so-called white collar criminals in the finance industry proportional to the damage their actions inflicts upon the country and the world.