Between now and the inauguration of Barack Obama as President of the United States on January 20, 2009 this space will be used to post discussions about how the next president can begin to tackle the many problems that he and the country will be faced with. I will be posting commentary from a variety of sources and invite comments from readers to join the conversation. President Obama and his cabinet and advisors will have a mountain of issues to face - the economy, global warming, two wars, health care, the housing crisis and a significantly damaged world view of the United States. He will need the help and support and full participation of the American people. The problems facing us are beyond the capacities of any one man or woman and beyond those of any one presidential administration. The conversation continues:
To help develop a perspective on how to handle current crises, it can be informative to look at how similar crises were addressed successfully in the past. In 1933 when FDR assumed the Presidency the nation was in the throes of the Great Depression. The collapse of the banking industry, high unemployment, foreclosures and the failure of many large industrial companies were facing the country, not unlike the economic conditions facing us today.
FDR: First Inaugural Address
Saturday, March 4, 1933
I am certain that my fellow Americans expect that on my induction into the Presidency I will address them with a candor and a decision which the present situation of our Nation impels. This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself - nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory. I am convinced that you will again give that support to leadership in these critical days.
In such a spirit on my part and on yours we face our common difficulties. They concern, thank God, only material things. Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone.
More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment.
Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because rulers of the exchange of mankind's goods have failed through their own stubbornness and their own incompetence, have admitted their failure, and have abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.
True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.
The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.
Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves and to our fellow men.
Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live.
Restoration calls, however, not for changes in ethics alone. This Nation asks for action, and action now.
Our greatest primary task is to put people to work. This is no unsolvable problem if we face it wisely and courageously. It can be accomplished in part by direct recruiting by the Government itself, treating the task as we would treat the emergency of a war, but at the same time, through this employment, accomplishing greatly needed projects to stimulate and reorganize the use of our natural resources.
Hand in hand with this we must frankly recognize the overbalance of population in our industrial centers and, by engaging on a national scale in a redistribution, endeavor to provide a better use of the land for those best fitted for the land. The task can be helped by definite efforts to raise the values of agricultural products and with this the power to purchase the output of our cities. It can be helped by preventing realistically the tragedy of the growing loss through foreclosure of our small homes and our farms. It can be helped by insistence that the Federal, State, and local governments act forthwith on the demand that their cost be drastically reduced. It can be helped by the unifying of relief activities which today are often scattered, uneconomical, and unequal. It can be helped by national planning for and supervision of all forms of transportation and of communications and other utilities which have a definitely public character. There are many ways in which it can be helped, but it can never be helped merely by talking about it. We must act and act quickly.
Finally, in our progress toward a resumption of work we require two safeguards against a return of the evils of the old order: there must be a strict supervision of all banking and credits: and investments, so that there will be an end to speculation with other people's money; and there must be provision for an adequate but sound currency.
These are the lines of attack. I shall presently urge upon a new Congress, in special session, detailed measures for their fulfillment, and I shall seek the immediate assistance of the several States.
Through this program of action we address ourselves to putting our own national house in order and making income balance outgo. Our international trade relations, though vastly important, are in point of time and necessity secondary to the establishment of a sound national economy. I favor as a practical policy the putting of first things first. I shall spare no effort to restore world trade by international economic readjustment, but the emergency at home cannot wait on that accomplishment.
The basic thought that guides these specific means of national recovery is not narrowly nationalistic. It is the insistence, as a first consideration, upon the interdependence of the various elements in and parts of the United States - a recognition of the old and permanently important manifestation of the American spirit of the pioneer. It is the way to recovery. It is the immediate way. It is the strongest assurance that the recovery will endure.
In the field of world policy I would dedicate this Nation to the policy of the good neighbor - the neighbor who resolutely respects himself and, because he does so, respects the rights of others - the neighbor who respects his obligations and respects the sanctity of his agreements in and with a world of neighbors.
If I read the temper of our people correctly, we now realize as we have never realized before our interdependence on each other; that we cannot merely take but we must give as well; that if we are to go forward, we must move as a trained and loyal army willing to sacrifice for the good of a common discipline, because without such discipline no progress is made, no leadership becomes effective. We are, I know, ready and willing to submit our lives and property to such discipline, because it makes possible a leadership which aims at a larger good. This I propose to offer, pledging that the larger purposes will bind upon us all as a sacred obligation with a unity of duty hitherto evoked only in time of armed strife.
With this pledge taken, I assume unhesitatingly the leadership of this great army of our people dedicated to a disciplined attack upon our common problems.
Action in this image and to this end is feasible under the form of government which we have inherited from our ancestors. Our Constitution is so simple and practical that it is possible always to meet extraordinary needs by changes in emphasis and arrangement without loss of essential form. That is why our constitutional system has proved itself the most superbly enduring political mechanism the modern world has produced. It has met every stress of vast expansion of territory, of foreign wars, of bitter internal strife, of world relations.
It is to be hoped that the normal balance of Executive and legislative authority may be wholly adequate to meet the unprecedented task before us. But it may be that an unprecedented demand and need for undelayed action may call for temporary departure from that normal balance of public procedure.
I am prepared under my constitutional duty to recommend the measures that a stricken Nation in the midst of a stricken world may require. These measures, or such other measures as the Congress may build out of its experience and wisdom, I shall seek, within my constitutional authority, to bring to speedy adoption.
But in the event that the Congress shall fail to take one of these two courses, and in the event that the national emergency is still critical, I shall not evade the clear course of duty that will then confront me. I shall ask the Congress for the one remaining instrument to meet the crisis - broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.
For the trust reposed in me I will return the courage and the devotion that befit the time. I can do no less.
We face the arduous days that lie before us in the warm courage of national unity; with the clear consciousness of seeking old and precious moral values; with the clean satisfaction that comes from the stern performance of duty by old and young alike. We aim at the assurance of a rounded and permanent national life.
We do not distrust the future of essential democracy. The people of the United States have not failed. In their need they have registered a mandate that they want direct, vigorous action. They have asked for discipline and direction under leadership. They have made me the present instrument of their wishes. In the spirit of the gift I take it.
In this dedication of a Nation we humbly ask the blessing of God. May He protect each and every one of us. May He guide me in the days to come.
November 11, 2008
November 9, 2008
Countdown to January 20, 2009
Between now and the inauguration of Barack Obama as President of the United States on January 20, 2009 this space will be used to post discussions about how the next president can begin to tackle the many problems that he and the country will be faced with. I will be posting commentary from a variety of sources and invite comments from readers to join the conversation. President Obama and his cabinet and advisors will have a mountain of issues to face - the economy, global warming, two wars, health care, the housing crisis and a significantly damaged world view of the United States. He will need the help and support and full participation of the American people. The problems facing us are beyond the capacities of any one man or woman and beyond those of any one presidential administration. Let the conversation begin.
To start the conversation, here is President-elect Barack Obama's acceptance speech
If there is anyone out there who still doubts that America is a place where all things are possible; who still wonders if the dream of our founders is alive in our time; who still questions the power of our democracy, tonight is your answer.
Its the answer told by lines that stretched around schools and churches in numbers this nation has never seen; by people who waited three hours and four hours, many for the very first time in their lives, because they believed that this time must be different; that their voice could be that difference.
Its the answer spoken by young and old, rich and poor, Democrat and Republican, black, white, Latino, Asian, Native American, gay, straight, disabled and not disabled - Americans who sent a message to the world that we have never been a collection of Red States and Blue States: we are, and always will be, the United States of America.
Its the answer that led those who have been told for so long by so many to be cynical, and fearful, and doubtful of what we can achieve to put their hands on the arc of history and bend it once more toward the hope of a better day.
Its been a long time coming, but tonight, because of what we did on this day, in this election, at this defining moment, change has come to America.
I just received a very gracious call from Senator McCain. He fought long and hard in this campaign, and hes fought even longer and harder for the country he loves. He has endured sacrifices for America that most of us cannot begin to imagine, and we are better off for the service rendered by this brave and selfless leader. I congratulate him and Governor Palin for all they have achieved, and I look forward to working with them to renew this nations promise in the months ahead.
I want to thank my partner in this journey, a man who campaigned from his heart and spoke for the men and women he grew up with on the streets of Scranton and rode with on that train home to Delaware, the Vice President-elect of the United States, Joe Biden.
I would not be standing here tonight without the unyielding support of my best friend for the last sixteen years, the rock of our family and the love of my life, our nations next First Lady, Michelle Obama. Sasha and Malia, I love you both so much, and you have earned the new puppy thats coming with us to the White House. And while shes no longer with us, I know my grandmother is watching, along with the family that made me who I am. I miss them tonight, and know that my debt to them is beyond measure.
To my campaign manager David Plouffe, my chief strategist David Axelrod, and the best campaign team ever assembled in the history of politics - you made this happen, and I am forever grateful for what youve sacrificed to get it done.
But above all, I will never forget who this victory truly belongs to - it belongs to you.
I was never the likeliest candidate for this office. We didnt start with much money or many endorsements. Our campaign was not hatched in the halls of Washington - it began in the backyards of Des Moines and the living rooms of Concord and the front porches of Charleston.
It was built by working men and women who dug into what little savings they had to give five dollars and ten dollars and twenty dollars to this cause. It grew strength from the young people who rejected the myth of their generations apathy; who left their homes and their families for jobs that offered little pay and less sleep; from the not-so-young people who braved the bitter cold and scorching heat to knock on the doors of perfect strangers; from the millions of Americans who volunteered, and organized, and proved that more than two centuries later, a government of the people, by the people and for the people has not perished from this Earth. This is your victory.
I know you didnt do this just to win an election and I know you didnt do it for me. You did it because you understand the enormity of the task that lies ahead. For even as we celebrate tonight, we know the challenges that tomorrow will bring are the greatest of our lifetime - two wars, a planet in peril, the worst financial crisis in a century. Even as we stand here tonight, we know there are brave Americans waking up in the deserts of Iraq and the mountains of Afghanistan to risk their lives for us. There are mothers and fathers who will lie awake after their children fall asleep and wonder how theyll make the mortgage, or pay their doctors bills, or save enough for college. There is new energy to harness and new jobs to be created; new schools to build and threats to meet and alliances to repair.
The road ahead will be long. Our climb will be steep. We may not get there in one year or even one term, but America - I have never been more hopeful than I am tonight that we will get there. I promise you - we as a people will get there.
There will be setbacks and false starts. There are many who wont agree with every decision or policy I make as President, and we know that government cant solve every problem. But I will always be honest with you about the challenges we face. I will listen to you, especially when we disagree. And above all, I will ask you join in the work of remaking this nation the only way its been done in America for two-hundred and twenty-one years - block by block, brick by brick, calloused hand by calloused hand.
What began twenty-one months ago in the depths of winter must not end on this autumn night. This victory alone is not the change we seek - it is only the chance for us to make that change. And that cannot happen if we go back to the way things were. It cannot happen without you.
So let us summon a new spirit of patriotism; of service and responsibility where each of us resolves to pitch in and work harder and look after not only ourselves, but each other. Let us remember that if this financial crisis taught us anything, its that we cannot have a thriving Wall Street while Main Street suffers - in this country, we rise or fall as one nation; as one people.
Let us resist the temptation to fall back on the same partisanship and pettiness and immaturity that has poisoned our politics for so long. Let us remember that it was a man from this state who first carried the banner of the Republican Party to the White House - a party founded on the values of self-reliance, individual liberty, and national unity. Those are values we all share, and while the Democratic Party has won a great victory tonight, we do so with a measure of humility and determination to heal the divides that have held back our progress. As Lincoln said to a nation far more divided than ours, We are not enemies, but friends...though passion may have strained it must not break our bonds of affection. And to those Americans whose support I have yet to earn - I may not have won your vote, but I hear your voices, I need your help, and I will be your President too.
And to all those watching tonight from beyond our shores, from parliaments and palaces to those who are huddled around radios in the forgotten corners of our world - our stories are singular, but our destiny is shared, and a new dawn of American leadership is at hand. To those who would tear this world down - we will defeat you. To those who seek peace and security - we support you. And to all those who have wondered if Americas beacon still burns as bright - tonight we proved once more that the true strength of our nation comes not from our the might of our arms or the scale of our wealth, but from the enduring power of our ideals: democracy, liberty, opportunity, and unyielding hope.
For that is the true genius of America - that America can change. Our union can be perfected. And what we have already achieved gives us hope for what we can and must achieve tomorrow.
This election had many firsts and many stories that will be told for generations. But one thats on my mind tonight is about a woman who cast her ballot in Atlanta. Shes a lot like the millions of others who stood in line to make their voice heard in this election except for one thing - Ann Nixon Cooper is 106 years old.
She was born just a generation past slavery; a time when there were no cars on the road or planes in the sky; when someone like her couldnt vote for two reasons - because she was a woman and because of the color of her skin.
And tonight, I think about all that shes seen throughout her century in America - the heartache and the hope; the struggle and the progress; the times we were told that we cant, and the people who pressed on with that American creed: Yes we can.
At a time when womens voices were silenced and their hopes dismissed, she lived to see them stand up and speak out and reach for the ballot. Yes we can.
When there was despair in the dust bowl and depression across the land, she saw a nation conquer fear itself with a New Deal, new jobs and a new sense of common purpose. Yes we can.
When the bombs fell on our harbor and tyranny threatened the world, she was there to witness a generation rise to greatness and a democracy was saved. Yes we can.
She was there for the buses in Montgomery, the hoses in Birmingham, a bridge in Selma, and a preacher from Atlanta who told a people that We Shall Overcome. Yes we can.
A man touched down on the moon, a wall came down in Berlin, a world was connected by our own science and imagination. And this year, in this election, she touched her finger to a screen, and cast her vote, because after 106 years in America, through the best of times and the darkest of hours, she knows how America can change. Yes we can.
America, we have come so far. We have seen so much. But there is so much more to do. So tonight, let us ask ourselves - if our children should live to see the next century; if my daughters should be so lucky to live as long as Ann Nixon Cooper, what change will they see? What progress will we have made?
This is our chance to answer that call. This is our moment. This is our time - to put our people back to work and open doors of opportunity for our kids; to restore prosperity and promote the cause of peace; to reclaim the American Dream and reaffirm that fundamental truth - that out of many, we are one; that while we breathe, we hope, and where we are met with cynicism, and doubt, and those who tell us that we cant, we will respond with that timeless creed that sums up the spirit of a people:
Yes We Can. Thank you, God bless you, and may God Bless the United States of America.
To start the conversation, here is President-elect Barack Obama's acceptance speech
If there is anyone out there who still doubts that America is a place where all things are possible; who still wonders if the dream of our founders is alive in our time; who still questions the power of our democracy, tonight is your answer.
Its the answer told by lines that stretched around schools and churches in numbers this nation has never seen; by people who waited three hours and four hours, many for the very first time in their lives, because they believed that this time must be different; that their voice could be that difference.
Its the answer spoken by young and old, rich and poor, Democrat and Republican, black, white, Latino, Asian, Native American, gay, straight, disabled and not disabled - Americans who sent a message to the world that we have never been a collection of Red States and Blue States: we are, and always will be, the United States of America.
Its the answer that led those who have been told for so long by so many to be cynical, and fearful, and doubtful of what we can achieve to put their hands on the arc of history and bend it once more toward the hope of a better day.
Its been a long time coming, but tonight, because of what we did on this day, in this election, at this defining moment, change has come to America.
I just received a very gracious call from Senator McCain. He fought long and hard in this campaign, and hes fought even longer and harder for the country he loves. He has endured sacrifices for America that most of us cannot begin to imagine, and we are better off for the service rendered by this brave and selfless leader. I congratulate him and Governor Palin for all they have achieved, and I look forward to working with them to renew this nations promise in the months ahead.
I want to thank my partner in this journey, a man who campaigned from his heart and spoke for the men and women he grew up with on the streets of Scranton and rode with on that train home to Delaware, the Vice President-elect of the United States, Joe Biden.
I would not be standing here tonight without the unyielding support of my best friend for the last sixteen years, the rock of our family and the love of my life, our nations next First Lady, Michelle Obama. Sasha and Malia, I love you both so much, and you have earned the new puppy thats coming with us to the White House. And while shes no longer with us, I know my grandmother is watching, along with the family that made me who I am. I miss them tonight, and know that my debt to them is beyond measure.
To my campaign manager David Plouffe, my chief strategist David Axelrod, and the best campaign team ever assembled in the history of politics - you made this happen, and I am forever grateful for what youve sacrificed to get it done.
But above all, I will never forget who this victory truly belongs to - it belongs to you.
I was never the likeliest candidate for this office. We didnt start with much money or many endorsements. Our campaign was not hatched in the halls of Washington - it began in the backyards of Des Moines and the living rooms of Concord and the front porches of Charleston.
It was built by working men and women who dug into what little savings they had to give five dollars and ten dollars and twenty dollars to this cause. It grew strength from the young people who rejected the myth of their generations apathy; who left their homes and their families for jobs that offered little pay and less sleep; from the not-so-young people who braved the bitter cold and scorching heat to knock on the doors of perfect strangers; from the millions of Americans who volunteered, and organized, and proved that more than two centuries later, a government of the people, by the people and for the people has not perished from this Earth. This is your victory.
I know you didnt do this just to win an election and I know you didnt do it for me. You did it because you understand the enormity of the task that lies ahead. For even as we celebrate tonight, we know the challenges that tomorrow will bring are the greatest of our lifetime - two wars, a planet in peril, the worst financial crisis in a century. Even as we stand here tonight, we know there are brave Americans waking up in the deserts of Iraq and the mountains of Afghanistan to risk their lives for us. There are mothers and fathers who will lie awake after their children fall asleep and wonder how theyll make the mortgage, or pay their doctors bills, or save enough for college. There is new energy to harness and new jobs to be created; new schools to build and threats to meet and alliances to repair.
The road ahead will be long. Our climb will be steep. We may not get there in one year or even one term, but America - I have never been more hopeful than I am tonight that we will get there. I promise you - we as a people will get there.
There will be setbacks and false starts. There are many who wont agree with every decision or policy I make as President, and we know that government cant solve every problem. But I will always be honest with you about the challenges we face. I will listen to you, especially when we disagree. And above all, I will ask you join in the work of remaking this nation the only way its been done in America for two-hundred and twenty-one years - block by block, brick by brick, calloused hand by calloused hand.
What began twenty-one months ago in the depths of winter must not end on this autumn night. This victory alone is not the change we seek - it is only the chance for us to make that change. And that cannot happen if we go back to the way things were. It cannot happen without you.
So let us summon a new spirit of patriotism; of service and responsibility where each of us resolves to pitch in and work harder and look after not only ourselves, but each other. Let us remember that if this financial crisis taught us anything, its that we cannot have a thriving Wall Street while Main Street suffers - in this country, we rise or fall as one nation; as one people.
Let us resist the temptation to fall back on the same partisanship and pettiness and immaturity that has poisoned our politics for so long. Let us remember that it was a man from this state who first carried the banner of the Republican Party to the White House - a party founded on the values of self-reliance, individual liberty, and national unity. Those are values we all share, and while the Democratic Party has won a great victory tonight, we do so with a measure of humility and determination to heal the divides that have held back our progress. As Lincoln said to a nation far more divided than ours, We are not enemies, but friends...though passion may have strained it must not break our bonds of affection. And to those Americans whose support I have yet to earn - I may not have won your vote, but I hear your voices, I need your help, and I will be your President too.
And to all those watching tonight from beyond our shores, from parliaments and palaces to those who are huddled around radios in the forgotten corners of our world - our stories are singular, but our destiny is shared, and a new dawn of American leadership is at hand. To those who would tear this world down - we will defeat you. To those who seek peace and security - we support you. And to all those who have wondered if Americas beacon still burns as bright - tonight we proved once more that the true strength of our nation comes not from our the might of our arms or the scale of our wealth, but from the enduring power of our ideals: democracy, liberty, opportunity, and unyielding hope.
For that is the true genius of America - that America can change. Our union can be perfected. And what we have already achieved gives us hope for what we can and must achieve tomorrow.
This election had many firsts and many stories that will be told for generations. But one thats on my mind tonight is about a woman who cast her ballot in Atlanta. Shes a lot like the millions of others who stood in line to make their voice heard in this election except for one thing - Ann Nixon Cooper is 106 years old.
She was born just a generation past slavery; a time when there were no cars on the road or planes in the sky; when someone like her couldnt vote for two reasons - because she was a woman and because of the color of her skin.
And tonight, I think about all that shes seen throughout her century in America - the heartache and the hope; the struggle and the progress; the times we were told that we cant, and the people who pressed on with that American creed: Yes we can.
At a time when womens voices were silenced and their hopes dismissed, she lived to see them stand up and speak out and reach for the ballot. Yes we can.
When there was despair in the dust bowl and depression across the land, she saw a nation conquer fear itself with a New Deal, new jobs and a new sense of common purpose. Yes we can.
When the bombs fell on our harbor and tyranny threatened the world, she was there to witness a generation rise to greatness and a democracy was saved. Yes we can.
She was there for the buses in Montgomery, the hoses in Birmingham, a bridge in Selma, and a preacher from Atlanta who told a people that We Shall Overcome. Yes we can.
A man touched down on the moon, a wall came down in Berlin, a world was connected by our own science and imagination. And this year, in this election, she touched her finger to a screen, and cast her vote, because after 106 years in America, through the best of times and the darkest of hours, she knows how America can change. Yes we can.
America, we have come so far. We have seen so much. But there is so much more to do. So tonight, let us ask ourselves - if our children should live to see the next century; if my daughters should be so lucky to live as long as Ann Nixon Cooper, what change will they see? What progress will we have made?
This is our chance to answer that call. This is our moment. This is our time - to put our people back to work and open doors of opportunity for our kids; to restore prosperity and promote the cause of peace; to reclaim the American Dream and reaffirm that fundamental truth - that out of many, we are one; that while we breathe, we hope, and where we are met with cynicism, and doubt, and those who tell us that we cant, we will respond with that timeless creed that sums up the spirit of a people:
Yes We Can. Thank you, God bless you, and may God Bless the United States of America.
October 19, 2008
A Sensible Plan for Recovery by the Working Group on Extreme Inequality
Program Basics
• A stimulus for Main Street: Aid to the real economy
• Make Wall Street speculators pay for the bailout: No more debt
• Shut down the casino: Rein in the unregulated financial sector
• Limits on CEO pay and prohibitions on profiteering from the bailout
BY Sarah Anderson, John Cavanagh, Chuck Collins, Dedrick Muhammad, and Sam Pizzigati
Working Group on Extreme Inequality (www.extremeinequality.org)
A PROJECT OF THE INSTITUTE FOR POLICY STUDIES
updated October 15, 2008
Responding to Main Street:
Rebuilding Accountabilty and Trust
The grassroots blowback against the Bush Administration’s Wall Street bailout is rooted in a deep distrust. Americans certainly do recognize the need to act on our current crisis. But they detest the idea that ordinary taxpayers should bear the brunt of bailing out the kingpins of Wall Street.
The Bush administration, with its recent moves to begin purchasing bank equity, has essentially acknowledged the inadequacy of the original bailout plan. The administration’s new direction, even so, remains inadequate. We believe the program we outline below can far better address the root causes of our financial collapse and restore trust and confidence in our economic system.
1. Fund a Green Stimulus for the Real Economy
The debate over the economic crisis has so far concentrated on the $700 billion financial sector bailout crafted by Treasury Secretary Henry Paulson and approved by Congress. A real “bailout” would target the troubled households of working families. At the national level, Congress should authorize a $200 billion “Main Street Green Stimulus Package” that could bolster the real economy and those left vulnerable by the subprime mortgage meltdown.
This package should include:
• A $130 billion annual investment in renewable energy to stimulate good jobs anchored in local economies and reduce our dependency on oil.
• A $50 billion outlay to help keep people in foreclosed homes through refinancing and creating new homeownership and housing opportunities.
• A $20 billion aid package to states to address the squeeze on state and local government services that declining tax revenues are now forcing. See the terms of the $56.2 billion proposed Economic Recovery Package proposed by Senators Reid (D-NV) and Byrd (D-WV).
Reid/Byrd Economic Recovery Act of 2008
We also need action at the international level. Rising unemployment in the United States is already spreading around the world. A global recession would especially hit poor countries already suffering from the food price crisis. The U.S. government should:
• Work with leaders of other leading economies to put in place a coordinated recovery
plan to stimulate the real economy in the industrialized countries and beyond. They need to support infrastructure programs and investments in alternative energy to create green jobs and advocate tax measures and spending programs that support middle- and lower-income population purchasing power.
• Support expanded debt cancellation. External debt payments currently cripple the capacity of many developing nations to stimulate their economies. Any resolution of the financial crisis, to be effective, must expand the resources available and the countries eligible for multilateral debt relief – without onerous policy strings.
2. Restructure Mortgages for Families Put at Risk by Predatory Loans
Institute a moratorium on foreclosures and work with homeowners and at-risk tenants to enable people to stay in their homes. Keeping people in their homes will stabilize home asset values and prevent deep community distress. Funds from the “Main Street” stimulus can help restructure loans to protect those put at risk by predatory practices.
3. Make Wall Street Speculators Pay for the U.S. Bailout
The lawmakers who negotiated the bailout appear to have assumed that the federal government will simply borrow more money to foot the bailout bill. But this rush to borrowing merely shifts the bailout burden onto the backs of future taxpayers. Congress needs to change course — and develop a “pay as we go” plan that makes Wall Street pay. The lion’s share of bailout funding should come from the highfinance gamblers and the wealthy CEOs who have so profited from our casino economy. The Institute for Policy Studies has identified $900 billion in dollars in revenue to pay for a Main Street stimulus and Wall Street bailout. A full text of this
appears at: http://www.ips-dc.org/articles/740.
A fair and responsible plan would include:
• A securities transaction tax: $150 billion.
A fair plan to pay for the bailout should include a modest financial transactions tax on the buying and selling of stock and other financial products. A penny on every $4 invested would generate $100 billion a year. Other European countries already tax stock transactions, and these transaction taxes effectively discourage speculation.
• A corporate minimum income tax: $60 billion
In August, the Government Accountability Office reported that two-thirds of U.S. corporations paid no income taxes between 1998 and 2005. These corporations paid nothing toward our shared expenses of defense, environmental protection, public health, and education. Ordinary taxpayers should not be left holding this bag. A minimum corporate income tax should contribute toward the bailout.
• A ‘disgorgement’ recovery from profligate CEOs: $40 billion
Until several weeks ago, top executives were collecting massive paychecks while they told the rest of us that “everything is fine.” CEOs gorged themselves and have now taken the money and run. The four biggest investment banks on Wall Street shelled out $3 billion in bonuses last year.
One of them, Lehman Brothers, has just gone under. Another, Bear Stearns, was bailed out earlier this year. To help pay for recovery, we should seek the payback of executive compensation inappropriately extracted in the years before the Wall Street meltdown.
• An end to overseas corporate tax havens: $100 billion
Congress should close down corporate tax havens that allow corporations to game the system and cut their taxes, sometimes to zero. This step would generate $100 billion from profitable companies that have paid no taxes over the last decade.
• The elimination of subsidies for excessive CEO pay: $20 billion
As taxpayers, we subsidize excessive CEO pay, through a host of tax loopholes, to the tune of $20 billion a year. Congress should close these loopholes, including the accounting gimmicks that permit companies to report one set of earnings to shareholders and another lower number to Uncle Sam
• A corporate minimum income tax: $60 billion
In August, the Government Accountability Office reported that two-thirds of U.S. corporations paid no income taxes between 1998 and 2005. These corporations paid nothing toward our shared expenses of defense, environmental protection, public health, and education. Ordinary taxpayers should not be left holding this bag. A minimum corporate income tax should contribute toward the bailout.
• A ‘disgorgement’ recovery from profligate CEOs: $40 billion
Until several weeks ago, top executives were collecting massive paychecks while they told the rest of us that “everything is fine.” CEOs gorged themselves and have now taken the money and run. The four biggest investment banks on Wall Street shelled out $3 billion in bonuses last year.
One of them, Lehman Brothers, has just gone under. Another, Bear Stearns, was bailed out earlier this year. To help pay for recovery, we should seek the payback of executive compensation inappropriately extracted in the years before the Wall Street meltdown.
• An end to overseas corporate tax havens: $100 billion
Congress should close down corporate tax havens that allow corporations to game the system and cut their taxes, sometimes to zero. This step would generate $100 billion from profitable companies that have paid no taxes over the last decade.
• The elimination of subsidies for excessive CEO pay: $20 billion
As taxpayers, we subsidize excessive CEO pay, through a host of tax loopholes, to the tune of $20 billion a year. Congress should close these loopholes, including the accounting gimmicks that permit companies to report one set of earnings to shareholders and another lower number to Uncle Sam
4. Shut Down the Global Casino: Assert real oversight of financial markets
The public would feel more positively about government intervention if this intervention were clearly aimed at addressing the root causes of the financial crisis. This crisis has evolved from a convergence of disasters:
• The tolerance by the Federal Reserve and other government overseers of a dangerous
housing bubble.
• The rapid expansion of unregulated financial institutions and instruments, everything from hedge funds to credit default swaps.
• The failure of government oversight of existing financial institutions
• At the national level, the federal government should take the following steps to shut down the casino:
• Direct the Federal Reserve to intervene to prevent present and future asset bubbles.
• Extend financial reserve requirements to new security categories such as derivatives and place strict limits on leverage for all regulated financial institutions. Tradable instruments, like credit default swaps, should be standardized and traded on regular exchanges.
• Regulate the packaging of loans so they can be evaluated, rated, and priced rationally.
• Regulate hedge funds and private equity funds in a way comparable to banks
• Move against predatory home mortgage lending.
• Establish a system of ongoing public trusteeship for banks receiving public assistance to ensure such problems are not repeated.
• Direct the Federal Reserve to intervene to prevent present and future asset bubbles.
• Extend financial reserve requirements to new security categories such as derivatives and place strict limits on leverage for all regulated financial institutions. Tradable instruments, like credit default swaps, should be standardized and traded on regular exchanges.
• Regulate the packaging of loans so they can be evaluated, rated, and priced rationally.
• Regulate hedge funds and private equity funds in a way comparable to banks
• Move against predatory home mortgage lending.
• Establish a system of ongoing public trusteeship for banks receiving public assistance to ensure such problems are not repeated.
At the international level, the U.S. government should:
• Work with other governments to develop a new international regulatory architecture
aimed at preventing future financial crises. This should cover not just banks but also the parallel financial system -- hedge funds, private equity and what is left of the investment banking sector. This new architecture needs to apply stricter capital reserve requirements, a speculation tax on international transactions, and stronger transparency rules.
• Revise current trade policies. Existing free trade agreements and bilateral investment treaties ban governments from placing controls on capital flows and applying other sensible conditions on foreign investment.
• Demand that the international financial institutions allow borrowing country
governments maximum policy space to set exchange rate policy, regulate capital movements, and eliminate speculative activity.
5. Limit Excessive CEO Pay and Prohibit Bailout Profiteering
Many Americans oppose the bailout because they believe that Wall Street CEOs and fund managers will be financially rewarded for their reckless behavior. Americans also fear that Wall Street profiteers will make money from the bailout, just as slick operators made millions “fixing” the Savings and Loan bailout.
Placing limits on CEO pay would remove the key incentive that has driven the short-term “casino” mentality in Corporate America. The bailout bill left this incentive largely in place, with a provision that gave the determination of what’s “excessive” in executive pay to Treasury Secretary Paulson, a former Wall Street wheeler-dealer who made hundreds of millions of dollars as an investment bank CEO. Several members of Congress have proposed fixed executive pay limits for the bailout. Senators John McCain (R-AZ) and Diane Feinstein (D-CA), for instance, have both made offhand comments calling for capping compensation for bailed-out executives at the current compensation level of the U.S. President, $400,000.
The Institute for Policy Studies favors a lid on CEO pay set at 25 times the pay of a bailed-out company’s lowest-paid worker. The current top federal paycheck — the President’s $400,000 annual compensation — represents about 25 times the pay of the federal government’s lowest-paid employee. The most respected business thinker of the 20th century, Peter Drucker, considered the 25-to-1 ratio to be the appropriate standard for the private sector as well. Pay gaps too wide, management experts like Drucker believe, undermine enterprise effectiveness.
But executive pay controls need to go beyond the ranks of “bailed-out” firms. Companies hired to manage the bailout need to be controlled as well. Private firms, as news reports (New York Times, “Big Financiers Start Lobbying for Wider Aid”) indicate, are already lining up to cash in cash in on the bailout. We need strict pay controls and conflict-of interest oversight to prevent this profiteering at taxpayer’s expense.
ACTION
Educate members of Congress. We should immediately contact our members of Congress, whether they voted for or against the bailout, and urge them to embrace this five-point program:
• Fund a green stimulus for the real economy
• Restructure mortgages for families put at risk by predatory lenders
• Make Wall Street speculators pay for the bailout: No more debt
• Shut down the global casino: Rein in the unregulated financial sector
• Limit CEO pay and prohibit profiteering from the bailout
Local Media. Influence the conversation. We should write letters to the editor, call in to talk radio programs, put forward op-eds.
Watch for ongoing action activities at http://www.extremeinequality.org
New Report From the Center on Budget and Policy Priorites Shows Devastating Impact of Current Economy on Food stamp Recipients
FOOD STAMP BENEFITS FALLING FURTHER
BEHIND RISING FOOD PRICES
By Dorothy Rosenbaum
BEHIND RISING FOOD PRICES
By Dorothy Rosenbaum
The current economic slowdown has coincided with a sharp increase in food prices, which has exacerbated hardship for many low-income families who also face high gas prices (and will face high home heating bills this fall and winter). Food stamp benefit levels are supposed to be sufficient to enable households to afford the “Thrifty Food Plan,” a low-cost but nutritionally adequate diet established by USDA.[1] Since 1996, however, when Congress cut food stamp benefits, the level of benefits has fallen short in almost every month.[2]
Periods of rapid food price inflation — such as the last several years — exacerbate this problem because food stamp benefit levels are based on food price data that become increasingly outdated over the course of the year. For example, the actual cost of the foods in the Thrifty Food Plan for a household of four was about $430 more over the course of fiscal year 2008 than the Food Stamp Program assumed would be necessary to purchase these foods. Low-income households had to make up the entire difference on their own. With food prices expected to continue rising in fiscal year 2009, food stamp benefits will likely once again be insufficient unless Congress enacts a temporary benefit increase.
View the full report at: http://www.cbpp.org/7-22-08fa.htm
September 26, 2008
The Economic Policy Institute Proposes A Workable Bailout Plan
September 22, 2008 | EPI Policy Memorandum #128
Financial industry bailout plan needs to protect taxpayers
The turmoil in financial markets is clearly deep and threatening. The economy, especially the job market, is already facing recessionary conditions, and a further meltdown in credit markets could absolutely deepen this crisis. Piecemeal attempts to repair the damage created by years of inadequate oversight, over-leveraging, and reckless lending and borrowing standards have not worked.
Thus, we support a systematic intervention, but believe that the one proposed by Secretary Paulson is fundamentally flawed. Most important, by committing the government to the purchase of vast amounts of failing debt without any compensation, it fails to protect taxpayers from exposure to significant losses. The way the Paulson plan is structured, taxpayers are likely to pay a premium for “toxic” debt (i.e., more than the underlying value) with little likelihood that they will ever recoup the expense. Moreover, this shortcoming can be easily fixed in such a way that does not threaten to derail the process, given the urgency of the situation.
To do so, the government should follow the lead offered by Congressional Democrats and demand equity for the debt it purchases. We elaborate on this below, but the idea is for the government to act like a private investor—lending money in exchange for a share of the firm. If the loans are effective, and the company once again prospers, the government sells its shares at a premium. If the firm fails, the government has the right to claim the value of any remaining assets.
This is but one condition we believe should be part of the deal—we note others below. While we recognize the urgency of the crisis and the need for quick action, we do not believe that it requires acceding to every aspect of the Paulson plan—and we are relieved to see that some key members of Congress agree. These times call for bipartisan negotiations that protect the taxpayer, offset the government’s expense, and re-regulate markets to reduce the distortions that gave rise to this unfortunate situation in the first place.
With $700 billion of taxpayer money at stake, Congress, the administration, and Secretary Paulson must represent all of us, not just the financial markets. This means paying attention to distressed mortgage holders and to job seekers facing an unemployment rate of 6.1% (more than 10% for African Americans). To offset whatever costs emerge from this bailout, we will need to raise revenues—we suggest levying a tax on financial transactions and raising the tax on income from capital gains and dividends to the same rate as wages. Otherwise, the nation’s needs for expanded health care and investments in infrastructure, renewable energy, and education will be curtailed. We also must make sure that those who are bailed out do not enrich themselves further with excessive salaries and benefits.
Specifically, Congress needs to ensure that there are adequate safeguards for taxpayers included in any bailout package. These measures include:
Equity stakes. Federal assistance must be accompanied by steps to minimize the costs to taxpayers and to ensure that taxpayers participate in any future market gains. The bailout cannot simply be a giveaway to companies that made poor decisions.
Federal purchases of mortgage or related assets should result in taxpayers receiving a share of those companies that participate. The preferred equity stake should be proportional to the size of aid the firms receive. In particular, if assets are purchased by the government at a level above fair value, the equity stake must reflect at least that inflated value. In addition, any injections of capital by the government should be secured by an equity stake at least as large as the cash infusion. Consequently, shareholders and taxpayers will share in both the cost and potential benefits of the bailout.
Further, a "clawback" provision would hold companies responsible for the future performance of the assets they sell to the government. If a given firm's assets perform significantly worse than others in the same asset class in the wider market over a period of five years, the difference should be paid by the companies to the government. This will blunt incentives for firms to swap only their worst assets for equity stakes with the government.
Transparency. If private companies are allowed to participate, they must be subject to the same regulatory and reporting requirements as public firms, including the reporting of all liabilities. Off-the-books accounting should not be allowed.
Compensation. Firms that participate in the program must agree to freeze executives’ compensation at or below a reasonable level—say the salary of the President of the United States—for as long as the government holds an equity stake in the firm. Congress should also include a requirement that compensation packages for public companies be approved by a majority of those shareholders—including government shareholders.
Regulation. Federal legislation must include a timeline for the Treasury and Congressional committees to propose new financial-industry regulations that would significantly reduce systemic risk. Congressional leaders on a bi-partisan basis should publicly commit now to a set of principles that will guide systemic reform in the next Congress. These principles should include tighter and more broadly applied asset reserve requirements, the elimination of off-balance sheet entities and liabilities, tighter control of conflicts of interest, and a crackdown on predatory mortgage lending and lax underwriting standards. Any congressional deal must include a commitment from both parties in Congress to take up legislation to reform the regulatory structure.
Home owner relief. Bankruptcy judges should be allowed to modify the terms of mortgages when the appraised value of a home falls below the mortgage value. Further, home owners whose loans are modified, either through the court or through a "workout" with a bank, should not be penalized on their credit scores.
Process. The program to purchase certain kinds of financial securities should be reviewed frequently by the administration, and the Treasury Secretary should be required to report to Congress on the program at least every 90 days.
Beyond the immediate crisis
Congress needs to act soon to address structural problems to ensure that this kind of crisis cannot reoccur. These measures include:
Reform financial regulations. Publicly traded companies should have financial books that fully reveal the extent of all liabilities and assets. There is no justification for hiding liabilities from lenders or investors, or the government. Off-balance sheet entities or transactions should be prohibited.
Any institution that assumes a role of insuring financial transactions must have reserves adequate to pay off its reasonably anticipated obligations, and much of current finance involves credit derivative swaps and other transactions that hedge or insure against financial events. Yet non-depositary financial institutions like Bear Sterns are permitted to operate with debt-to-capital ratios in excess of 30-1, grossly inadequate to cover potential losses. Regulators should set and enforce asset responsible reserve requirements for investment banks, hedge funds, and other financial institutions.
Mortgage brokers were at the heart of the financial crisis. The natural restraint on lending to people unable to repay has been undermined by the securitization of mortgages. Once brokers could sell a mortgage to an investment bank without concern for the borrower’s ability to repay, the number of bad loans skyrocketed, and foreclosures followed. Tough underwriting standards must be enacted, and brokers must be prohibited from writing loans that they do not reasonably expect can be repaid.
Conflicts of interest, such as those that permitted rating agencies to accept payment from the investment banks whose securities were being rated, must be rooted out and prohibited.
Address the fundamentals of the economy. While it is important to ensure that financial markets continue to function properly, we should also bear in mind that the broader economy continues to struggle with rising unemployment, stagnating wages and incomes, and increasing prices for energy and food.
Home owners should not be left out. This assistance should include, at a minimum, backing for state efforts to provide counseling and temporary relief, and an expansion of judges’ ability to coordinate adjustments in mortgage terms to allow more people to stay in their houses.
Congress should pass an economic stimulus package that includes infrastructure investments, aid to states, and additional payments for low- and moderate-income families. Such a bill, if large enough, would provide a needed spark to complement the efforts on Wall Street. To have a significant impact, a job creation package must be at least as large as the $162 billion package passed earlier this year (though the outlays might be spread over the next 18 months.)
Shared sacrifice. While it may be necessary to provide a backstop to the broader market, it is also clear that many of those on Wall Street have benefited greatly from the excesses of the last few years. The costs of this bailout are unknown since the value of the assets that will be taken over by the federal government is unknowable at this time. It is important, however, that the costs of this bailout not prevent our nation from addressing its many needs, such as health care, education, investments in energy renewables, etc.
We must demand that the costs of the bailout are shared equitably. That means raising taxes on those with high incomes and setting capital gains and dividends tax rates at the same level as ordinary income. Also, a financial transactions tax should be implemented starting in 2009; this tax alone could yield from $50 to $100 billion to meet the costs of the bailout and other needs.
For more information and discussion go to: http://www.epi.org/
Financial industry bailout plan needs to protect taxpayers
The turmoil in financial markets is clearly deep and threatening. The economy, especially the job market, is already facing recessionary conditions, and a further meltdown in credit markets could absolutely deepen this crisis. Piecemeal attempts to repair the damage created by years of inadequate oversight, over-leveraging, and reckless lending and borrowing standards have not worked.
Thus, we support a systematic intervention, but believe that the one proposed by Secretary Paulson is fundamentally flawed. Most important, by committing the government to the purchase of vast amounts of failing debt without any compensation, it fails to protect taxpayers from exposure to significant losses. The way the Paulson plan is structured, taxpayers are likely to pay a premium for “toxic” debt (i.e., more than the underlying value) with little likelihood that they will ever recoup the expense. Moreover, this shortcoming can be easily fixed in such a way that does not threaten to derail the process, given the urgency of the situation.
To do so, the government should follow the lead offered by Congressional Democrats and demand equity for the debt it purchases. We elaborate on this below, but the idea is for the government to act like a private investor—lending money in exchange for a share of the firm. If the loans are effective, and the company once again prospers, the government sells its shares at a premium. If the firm fails, the government has the right to claim the value of any remaining assets.
This is but one condition we believe should be part of the deal—we note others below. While we recognize the urgency of the crisis and the need for quick action, we do not believe that it requires acceding to every aspect of the Paulson plan—and we are relieved to see that some key members of Congress agree. These times call for bipartisan negotiations that protect the taxpayer, offset the government’s expense, and re-regulate markets to reduce the distortions that gave rise to this unfortunate situation in the first place.
With $700 billion of taxpayer money at stake, Congress, the administration, and Secretary Paulson must represent all of us, not just the financial markets. This means paying attention to distressed mortgage holders and to job seekers facing an unemployment rate of 6.1% (more than 10% for African Americans). To offset whatever costs emerge from this bailout, we will need to raise revenues—we suggest levying a tax on financial transactions and raising the tax on income from capital gains and dividends to the same rate as wages. Otherwise, the nation’s needs for expanded health care and investments in infrastructure, renewable energy, and education will be curtailed. We also must make sure that those who are bailed out do not enrich themselves further with excessive salaries and benefits.
Specifically, Congress needs to ensure that there are adequate safeguards for taxpayers included in any bailout package. These measures include:
Equity stakes. Federal assistance must be accompanied by steps to minimize the costs to taxpayers and to ensure that taxpayers participate in any future market gains. The bailout cannot simply be a giveaway to companies that made poor decisions.
Federal purchases of mortgage or related assets should result in taxpayers receiving a share of those companies that participate. The preferred equity stake should be proportional to the size of aid the firms receive. In particular, if assets are purchased by the government at a level above fair value, the equity stake must reflect at least that inflated value. In addition, any injections of capital by the government should be secured by an equity stake at least as large as the cash infusion. Consequently, shareholders and taxpayers will share in both the cost and potential benefits of the bailout.
Further, a "clawback" provision would hold companies responsible for the future performance of the assets they sell to the government. If a given firm's assets perform significantly worse than others in the same asset class in the wider market over a period of five years, the difference should be paid by the companies to the government. This will blunt incentives for firms to swap only their worst assets for equity stakes with the government.
Transparency. If private companies are allowed to participate, they must be subject to the same regulatory and reporting requirements as public firms, including the reporting of all liabilities. Off-the-books accounting should not be allowed.
Compensation. Firms that participate in the program must agree to freeze executives’ compensation at or below a reasonable level—say the salary of the President of the United States—for as long as the government holds an equity stake in the firm. Congress should also include a requirement that compensation packages for public companies be approved by a majority of those shareholders—including government shareholders.
Regulation. Federal legislation must include a timeline for the Treasury and Congressional committees to propose new financial-industry regulations that would significantly reduce systemic risk. Congressional leaders on a bi-partisan basis should publicly commit now to a set of principles that will guide systemic reform in the next Congress. These principles should include tighter and more broadly applied asset reserve requirements, the elimination of off-balance sheet entities and liabilities, tighter control of conflicts of interest, and a crackdown on predatory mortgage lending and lax underwriting standards. Any congressional deal must include a commitment from both parties in Congress to take up legislation to reform the regulatory structure.
Home owner relief. Bankruptcy judges should be allowed to modify the terms of mortgages when the appraised value of a home falls below the mortgage value. Further, home owners whose loans are modified, either through the court or through a "workout" with a bank, should not be penalized on their credit scores.
Process. The program to purchase certain kinds of financial securities should be reviewed frequently by the administration, and the Treasury Secretary should be required to report to Congress on the program at least every 90 days.
Beyond the immediate crisis
Congress needs to act soon to address structural problems to ensure that this kind of crisis cannot reoccur. These measures include:
Reform financial regulations. Publicly traded companies should have financial books that fully reveal the extent of all liabilities and assets. There is no justification for hiding liabilities from lenders or investors, or the government. Off-balance sheet entities or transactions should be prohibited.
Any institution that assumes a role of insuring financial transactions must have reserves adequate to pay off its reasonably anticipated obligations, and much of current finance involves credit derivative swaps and other transactions that hedge or insure against financial events. Yet non-depositary financial institutions like Bear Sterns are permitted to operate with debt-to-capital ratios in excess of 30-1, grossly inadequate to cover potential losses. Regulators should set and enforce asset responsible reserve requirements for investment banks, hedge funds, and other financial institutions.
Mortgage brokers were at the heart of the financial crisis. The natural restraint on lending to people unable to repay has been undermined by the securitization of mortgages. Once brokers could sell a mortgage to an investment bank without concern for the borrower’s ability to repay, the number of bad loans skyrocketed, and foreclosures followed. Tough underwriting standards must be enacted, and brokers must be prohibited from writing loans that they do not reasonably expect can be repaid.
Conflicts of interest, such as those that permitted rating agencies to accept payment from the investment banks whose securities were being rated, must be rooted out and prohibited.
Address the fundamentals of the economy. While it is important to ensure that financial markets continue to function properly, we should also bear in mind that the broader economy continues to struggle with rising unemployment, stagnating wages and incomes, and increasing prices for energy and food.
Home owners should not be left out. This assistance should include, at a minimum, backing for state efforts to provide counseling and temporary relief, and an expansion of judges’ ability to coordinate adjustments in mortgage terms to allow more people to stay in their houses.
Congress should pass an economic stimulus package that includes infrastructure investments, aid to states, and additional payments for low- and moderate-income families. Such a bill, if large enough, would provide a needed spark to complement the efforts on Wall Street. To have a significant impact, a job creation package must be at least as large as the $162 billion package passed earlier this year (though the outlays might be spread over the next 18 months.)
Shared sacrifice. While it may be necessary to provide a backstop to the broader market, it is also clear that many of those on Wall Street have benefited greatly from the excesses of the last few years. The costs of this bailout are unknown since the value of the assets that will be taken over by the federal government is unknowable at this time. It is important, however, that the costs of this bailout not prevent our nation from addressing its many needs, such as health care, education, investments in energy renewables, etc.
We must demand that the costs of the bailout are shared equitably. That means raising taxes on those with high incomes and setting capital gains and dividends tax rates at the same level as ordinary income. Also, a financial transactions tax should be implemented starting in 2009; this tax alone could yield from $50 to $100 billion to meet the costs of the bailout and other needs.
For more information and discussion go to: http://www.epi.org/
September 17, 2008
Will Race Decide the Upcoming Presidential Election?
Following is a piece on white privilege and the current election written by Tim Wise for www.buzzflash.com a "pro-Democracy web site."
For those who still can't grasp the concept of white privilege, or who are constantly looking for some easy-to-understand examples of it, perhaps this list will help.
White privilege is when you can get pregnant at seventeen like Bristol Palin and everyone is quick to insist that your life and that of your family is a personal matter, and that no one has a right to judge you or your parents, because 'every family has challenges,' even as black and Latino families with similar 'challenges'are regularly typified as irresponsible, pathological and arbiters of social decay.
White privilege is when you can call yourself a 'fuckin' redneck,' like Bristol Palin's boyfriend does, and talk about how if anyone messes with you, you'll 'kick their fuckin' ass,' and talk about how you like to 'shoot shit' for fun, and still be viewed as a responsible, all-American boy (and a great son-in-law to be) rather than a thug.
White privilege is when you can attend four different colleges in six years like Sarah Palin did (one of which you basically failed out of, then returned to after making up some coursework at a community college), and no one questions your intelligence or commitment to achievement, whereas a person of color who did this would be viewed as unfit for college, and probably someone who only got in - in the first place because of affirmative action.
White privilege is when you can claim that being mayor of a town smaller than most medium-sized colleges, and then Governor of a state with about the same number of people as the lower fifth of the island of Manhattan, makes you ready to potentially be president, and people don't all piss on themselves with laughter, while being a black U.S. Senator, two-term state Senator, and constitutional law scholar, means you're 'untested.'
White privilege is being able to say that you support the words 'under God' in the pledge of allegiance because 'if it was good enough for the founding fathers, it's good enough for me,' and not be immediately disqualified from holding office--since, after all, the pledge was written in the late 1800s and the 'under God' part wasn't added until the 1950s--while believing that reading accused criminals and terrorists their rights (because, ya know, the Constitution, which you used to teach at a prestigious law school requires it), is a dangerous and silly idea only supported by mushy liberals.
White privilege is being able to be a gun enthusiast and not make people immediately scared of you.
White privilege is being able to have a husband who was a member of an extremist political party that wants your state to secede from the Union, and whose motto was 'Alaska first,' and no one questions your patriotism or that of your family, while if you're black and your spouse merely fails to come to a 9/11 memorial so she can be home with her kids on the first day of school, people immediately think she's being disrespectful. White privilege is being able to make fun of community organizers and the work they do--like, among other things, fight for the right of women to vote, or for civil rights, or the 8-hour workday, or an end to child labor--and people think you're being pithy and tough, but if you merely question the experience of a small town mayor and 18-month governor with no foreign policy expertise beyond a class she took in college--you're somehow being mean, or even sexist.
White privilege is being able to convince white women who don't even agree with you on any substantive issue to vote for you and your running mate anyway, because all of a sudden your presence on the ticket has inspired confidence in these same white women, and made them give your party a 'second look.'
White privilege is being able to fire people who didn't support your political campaigns and not be accused of abusing your power or being a typical politician who engages in favoritism, while being black and merely knowing some folks from the old-line political machines in Chicago means you must be corrupt.
White privilege is being able to attend churches over the years whose pastors say that people who voted for John Kerry or merely criticize George W. Bush are going to hell, and that the U.S. is an explicitly Christian nation and the job of Christians is to bring Christian theological principles into government, and who bring in speakers who say the conflict in the Middle East is God's punishment on Jews for rejecting Jesus, and everyone can still think you're just a good church-going Christian, but if you're black and friends with a black pastor who has noted (as have Colin Powell and the U.S. Department of Defense) that terrorist attacks are often the result of U.S. foreign policy and who talks about the history of racism and its effect on black people, you're an extremist who probably hates America.
White privilege is not knowing what the Bush Doctrine is when asked by a reporter, and then people get angry at the reporter for asking you such a 'trick question,' while being black and merely refusing to give one-word answers to the queries of Bill O'Reilly means you're dodging the question, or trying to seem overly intellectual and nuanced.
White privilege is being able to claim your experience as a POW has anything at all to do with your fitness for president, while being black and experiencing racism is, as Sarah Palin has referred to it, a 'light' burden.
And finally, white privilege is the only thing that could possibly allow someone to become president when he has voted with George W. Bush 90 percent of the time, even as unemployment is skyrocketing, people are losing their homes, inflation is rising, and the U.S. is increasingly isolated from world opinion, just because white voters aren't sure about that whole 'change' thing.
Ya know, it's just too vague and ill-defined, unlike, say, four more years of the same, which is very concrete and certain.
White privilege is, in short, the problem.
For those who still can't grasp the concept of white privilege, or who are constantly looking for some easy-to-understand examples of it, perhaps this list will help.
White privilege is when you can get pregnant at seventeen like Bristol Palin and everyone is quick to insist that your life and that of your family is a personal matter, and that no one has a right to judge you or your parents, because 'every family has challenges,' even as black and Latino families with similar 'challenges'are regularly typified as irresponsible, pathological and arbiters of social decay.
White privilege is when you can call yourself a 'fuckin' redneck,' like Bristol Palin's boyfriend does, and talk about how if anyone messes with you, you'll 'kick their fuckin' ass,' and talk about how you like to 'shoot shit' for fun, and still be viewed as a responsible, all-American boy (and a great son-in-law to be) rather than a thug.
White privilege is when you can attend four different colleges in six years like Sarah Palin did (one of which you basically failed out of, then returned to after making up some coursework at a community college), and no one questions your intelligence or commitment to achievement, whereas a person of color who did this would be viewed as unfit for college, and probably someone who only got in - in the first place because of affirmative action.
White privilege is when you can claim that being mayor of a town smaller than most medium-sized colleges, and then Governor of a state with about the same number of people as the lower fifth of the island of Manhattan, makes you ready to potentially be president, and people don't all piss on themselves with laughter, while being a black U.S. Senator, two-term state Senator, and constitutional law scholar, means you're 'untested.'
White privilege is being able to say that you support the words 'under God' in the pledge of allegiance because 'if it was good enough for the founding fathers, it's good enough for me,' and not be immediately disqualified from holding office--since, after all, the pledge was written in the late 1800s and the 'under God' part wasn't added until the 1950s--while believing that reading accused criminals and terrorists their rights (because, ya know, the Constitution, which you used to teach at a prestigious law school requires it), is a dangerous and silly idea only supported by mushy liberals.
White privilege is being able to be a gun enthusiast and not make people immediately scared of you.
White privilege is being able to have a husband who was a member of an extremist political party that wants your state to secede from the Union, and whose motto was 'Alaska first,' and no one questions your patriotism or that of your family, while if you're black and your spouse merely fails to come to a 9/11 memorial so she can be home with her kids on the first day of school, people immediately think she's being disrespectful. White privilege is being able to make fun of community organizers and the work they do--like, among other things, fight for the right of women to vote, or for civil rights, or the 8-hour workday, or an end to child labor--and people think you're being pithy and tough, but if you merely question the experience of a small town mayor and 18-month governor with no foreign policy expertise beyond a class she took in college--you're somehow being mean, or even sexist.
White privilege is being able to convince white women who don't even agree with you on any substantive issue to vote for you and your running mate anyway, because all of a sudden your presence on the ticket has inspired confidence in these same white women, and made them give your party a 'second look.'
White privilege is being able to fire people who didn't support your political campaigns and not be accused of abusing your power or being a typical politician who engages in favoritism, while being black and merely knowing some folks from the old-line political machines in Chicago means you must be corrupt.
White privilege is being able to attend churches over the years whose pastors say that people who voted for John Kerry or merely criticize George W. Bush are going to hell, and that the U.S. is an explicitly Christian nation and the job of Christians is to bring Christian theological principles into government, and who bring in speakers who say the conflict in the Middle East is God's punishment on Jews for rejecting Jesus, and everyone can still think you're just a good church-going Christian, but if you're black and friends with a black pastor who has noted (as have Colin Powell and the U.S. Department of Defense) that terrorist attacks are often the result of U.S. foreign policy and who talks about the history of racism and its effect on black people, you're an extremist who probably hates America.
White privilege is not knowing what the Bush Doctrine is when asked by a reporter, and then people get angry at the reporter for asking you such a 'trick question,' while being black and merely refusing to give one-word answers to the queries of Bill O'Reilly means you're dodging the question, or trying to seem overly intellectual and nuanced.
White privilege is being able to claim your experience as a POW has anything at all to do with your fitness for president, while being black and experiencing racism is, as Sarah Palin has referred to it, a 'light' burden.
And finally, white privilege is the only thing that could possibly allow someone to become president when he has voted with George W. Bush 90 percent of the time, even as unemployment is skyrocketing, people are losing their homes, inflation is rising, and the U.S. is increasingly isolated from world opinion, just because white voters aren't sure about that whole 'change' thing.
Ya know, it's just too vague and ill-defined, unlike, say, four more years of the same, which is very concrete and certain.
White privilege is, in short, the problem.
September 11, 2008
Annenberg Pubic Policy Center Websites Cut Through the Political Rhetoric
Factcheck.org & factchecked.org
Useful web sites to get to the heart of public policy, with lesson plans to help students develop critical thinking skills while exploring timely issues.
Here is a description of the web sites, in their own words.
You may think there are already plenty of Web sites devoted to teaching kids one thing or another, from elementary to obscure. Our goal is a little different. We believe that truth is an elusive commodity in our world of ceaseless communication, a world in which information is transmitted in huge helpings and in a virtual instant. All of us are overwhelmed with messages, many of them attempts to persuade us to do or buy something.
Our aim is to help students learn to be smart consumers of these messages, not to accept them at face value; to dig for facts using the Internet, not to stop looking once they get to Wikipedia; and to weigh evidence logically, not to draw conclusions based on their own biases.
The materials on this site, then, are meant to help students acquire the skills to see through the spin. Under the heading Tools of the Trade we’ve outlined a five-step framework for analyzing information and avoiding deception. That process is the essence of what we do at FactCheck.org, where we have been debunking false and misleading claims in politics since 2003.
Some of our Lesson Plans present students with a message, such as an advertisement, and guide them through a process of discovery leading to the facts. All of the ads are real, and students probably have encountered some of them already. For example, many students and teachers will have seen ads on the Internet and television for a dietary supplement called Hoodia, which supposedly helps users lose weight by suppressing their appetites. Our lesson plan encourages students to ask such questions as, “Is there any scientific evidence that Hoodia works?” and to hunt for some answers.
Political messages are at the hub of a number of our lessons. We are strictly nonpartisan. We found long ago that misleading statements aren’t the purview of Democrats or Republicans alone. So, for example, you’ll find a lesson dealing with misleading claims made by Republican presidential candidates during a debate, as well as one framed around out-of-context assertions in an ad by a group opposing the Iraq war. We’ll post these topical lesson plans on an ongoing basis to keep up with current events.
Another group of lessons teaches some of the basic concepts of reasoning, giving students the building blocks that will help them parse others’ arguments and strengthen their own. Using Monty Python skits and clips from other popular television programs and films, we’ve created engaging lessons on deductive versus inductive reasoning, picking out logical fallacies and similar subjects. These are our core lesson plans.
Straight from the Source is our go-to list of Web sites, the places we visit when we’re looking for information, along with our synopses of what they offer. Official government sites can be terrific fonts of facts, like the U.S. Senate’s Office of Public Records, which identifies companies that have hired lobbyists trying to influence government policy on, say, offshore oil drilling, and the FBI’s Uniform Crime Reports site is a reliable source for finding out something like how many murders occurred in Chicago last year. We also include a number of think tanks and issue advocacy groups with rundowns on their political leanings and reliability.
Our Dictionary helps decode bureaucratese as well as legal, political, economic and other terms of art that often plague discussions of policy and politics.
Click on Ask FactCheck to see our answers to commonly asked questions about politics, government and current affairs, which we select from queries submitted by users of this site and FactCheck.org. You may also e-mail us directly at Editor@FactCheckEd.org.
The techniques we use at FactCheck.org, and those we try to convey here at FactCheckED.org, are essentially those used by any good investigative reporter, researcher or logician (all of which we have on staff). We try to be skeptical but not cynical. When we review a new claim, we neither accept it at face value nor do we assume it is false. We listen carefully, look for evidence and weigh that against what’s being said or implied. We think those are good habits to teach anybody. We hope you agree.
Viveca Novak
Project Director, FactCheckEd.org
Deputy Director, FactCheck.org
Brooks Jackson
Director, FactCheck.org
Useful web sites to get to the heart of public policy, with lesson plans to help students develop critical thinking skills while exploring timely issues.
Here is a description of the web sites, in their own words.
You may think there are already plenty of Web sites devoted to teaching kids one thing or another, from elementary to obscure. Our goal is a little different. We believe that truth is an elusive commodity in our world of ceaseless communication, a world in which information is transmitted in huge helpings and in a virtual instant. All of us are overwhelmed with messages, many of them attempts to persuade us to do or buy something.
Our aim is to help students learn to be smart consumers of these messages, not to accept them at face value; to dig for facts using the Internet, not to stop looking once they get to Wikipedia; and to weigh evidence logically, not to draw conclusions based on their own biases.
The materials on this site, then, are meant to help students acquire the skills to see through the spin. Under the heading Tools of the Trade we’ve outlined a five-step framework for analyzing information and avoiding deception. That process is the essence of what we do at FactCheck.org, where we have been debunking false and misleading claims in politics since 2003.
Some of our Lesson Plans present students with a message, such as an advertisement, and guide them through a process of discovery leading to the facts. All of the ads are real, and students probably have encountered some of them already. For example, many students and teachers will have seen ads on the Internet and television for a dietary supplement called Hoodia, which supposedly helps users lose weight by suppressing their appetites. Our lesson plan encourages students to ask such questions as, “Is there any scientific evidence that Hoodia works?” and to hunt for some answers.
Political messages are at the hub of a number of our lessons. We are strictly nonpartisan. We found long ago that misleading statements aren’t the purview of Democrats or Republicans alone. So, for example, you’ll find a lesson dealing with misleading claims made by Republican presidential candidates during a debate, as well as one framed around out-of-context assertions in an ad by a group opposing the Iraq war. We’ll post these topical lesson plans on an ongoing basis to keep up with current events.
Another group of lessons teaches some of the basic concepts of reasoning, giving students the building blocks that will help them parse others’ arguments and strengthen their own. Using Monty Python skits and clips from other popular television programs and films, we’ve created engaging lessons on deductive versus inductive reasoning, picking out logical fallacies and similar subjects. These are our core lesson plans.
Straight from the Source is our go-to list of Web sites, the places we visit when we’re looking for information, along with our synopses of what they offer. Official government sites can be terrific fonts of facts, like the U.S. Senate’s Office of Public Records, which identifies companies that have hired lobbyists trying to influence government policy on, say, offshore oil drilling, and the FBI’s Uniform Crime Reports site is a reliable source for finding out something like how many murders occurred in Chicago last year. We also include a number of think tanks and issue advocacy groups with rundowns on their political leanings and reliability.
Our Dictionary helps decode bureaucratese as well as legal, political, economic and other terms of art that often plague discussions of policy and politics.
Click on Ask FactCheck to see our answers to commonly asked questions about politics, government and current affairs, which we select from queries submitted by users of this site and FactCheck.org. You may also e-mail us directly at Editor@FactCheckEd.org.
The techniques we use at FactCheck.org, and those we try to convey here at FactCheckED.org, are essentially those used by any good investigative reporter, researcher or logician (all of which we have on staff). We try to be skeptical but not cynical. When we review a new claim, we neither accept it at face value nor do we assume it is false. We listen carefully, look for evidence and weigh that against what’s being said or implied. We think those are good habits to teach anybody. We hope you agree.
Viveca Novak
Project Director, FactCheckEd.org
Deputy Director, FactCheck.org
Brooks Jackson
Director, FactCheck.org
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