|Action We Can Take
WRITE YOUR Natioinal REPRESENTATIVES AND SENATORS (Link to Representatives Contact Information) :
- Tell them they still haven't attacked the source of the problem. They must reinstate the protections of the Glass Stegall Act, separating banks from securities companies
from insurance companies.
- If they don't reinstate the protections against speculators buying commodities (responsible for gas price increases), we'll see gas prices rise unpredictably once more.
- Explain that it's YOUR money they are handing out. And, to remember that your children are having to borrow money in order for them to hand it out to very wealthy people
who have behaved irresponsibly and wasted theirs. Ask them to behave accordingly.
- Insist that they eliminate every ounce of pork in the Stimulus Bill and all other Bills passed in this 111th Congress.
- Stop re-electing Senators and Representatives who have played a role in this disaster. If he (there are no she's in SC) can't see beyond the next PAC donation, send
him home. If he isn't strategic, doesn't understand the questions to ask, the leadership to exhibit, send him home.
- Check out where your Senators and Representatives are getting their money. Follow the money. Link here to Open Secrets.
- Stay on top of your Senators' and Representative's votes. Link here to follow their votes: Open Congress.
FINANCIAL BAIL OUT #2
I didn't like the first bank bail out, nor do I like this one. The first was written over a weekend, by one of the former perpetrators of irresponsible financial instruments (Paulson
was head of Goldman Sachs before becoming U.S. Treasury Secretary). It was then sold to a people and Congress that didn't understand it (the people had a reason, the
Congress did not) as something that must happen immediately or the sky would indeed fall.
Because there was no regulatory oversight written into that bail out, money was spent on acquisitions and was hoarded rather than loaned.
Now, Americans out of work look at the tax dollars being spent on bonuses, acquisitions, etc. - see no relief in loosening credit ... and are rightfully furious, rightfully suspect
about yet another bailout.
Whose fault is it?
Number 1: Congress. They put no rules and regulations on the first bail out money. Paulson's "trust me" didn't work out. In December 2009, Congress also passed the bills
which removed the protections instituted by Franklin Roosevelt during the first Great Depression.
Number 2: Us. We re-elected 89% of that very same Congress in 2008 and sent them back to mess up some more.
Number 3: Financial Institutions ... but they come in third. They did what they do. You don't blame a guard dog if it bites. Treasury Secretary Geithner's (also of Goldman
Sachs) second plan is seemingly as vague as the first and gives too much power to the financial institutions which took our money and abused it the first time. At this writing
they haven't fixed the structural holes in the regulations that led us to this disastrous state: namely the bipartisan repeal of the Glass Stegall Act which had protected us from the
inevitable since the Great Depression (see excellent article sent in by reader below).
Comments From Readers (send to yoursiteSC@comcast.net)
March 23, 2009
Treasury Plan for Toxic Assets . CLICK HERE.
Check here for your predicted foreclosures: Foreclosure Predictions In Your District
Buck From Myrtle Beach
Why isn't the media covering this? Why isn't the government talking about it? Here's a good article on it excerpted from William Kaufman.
If you're looking for a major cause of the current banking meltdown, you need seek no farther than the 1999 repeal of the Glass-Steagall Act. The Glass-Steagall Act, passed in
1933, mandated the separation of commercial and investment banking in order to protect depositors from the hazards of risky investment and speculation. It worked fine for fifty
years until the banking industry began lobbying for its repeal during the 1980s.
The main cheerleader for the repeal was Phil Gramm, McCain's chief economic advisor. But wait -- fully 38 of 45 Senate Democrats voted for the repeal (which passed 90-8).
This disgraceful bow to the banking industry, signed into law by Bill Clinton in 1999, bears a major share of responsibility for the current banking crisis.
The 'finance, insurance and real estate industries together are regularly the largest campaign contributors and biggest spenders on lobbying of all business sectors [in 1999].
They laid out more than $200 million for lobbying in 1998, ' according to the Center for Responsive Politics. ' These industries succeeded in their two decades long effort to
repeal the act. ' "
Dana Beach, Executive Director of the South Carolina Coastal Conservation League
Editorial in the Post and Courier: Build New Economy Not Resurrect Old
The New Budget
March 1, 2009
I'm deeply worried about the new budget proposed by President Obama. It's too much money. It's too much debt. It's too dependent on China buying even more of our debt
and I don't trust China as our loan officer. It also, in my opinion, has too much optimism built into it's GDP projections. Particularly when we just got the devastating news that
the latest GDP is -6.2%.
All of which is NOT to say that I think the Republicans are helping. They are not. They need to stop saying "no" and come up with solutions. And, both parties need to
understand that Americans are fed up with finger pointing and posturing for CSPAN. Can hey stop the theatrics and focus long enough to do something sensible?
I fail to understand why we aren't starting this new Administration and Congress with a total focus on the economy: repairing the regulatory holes which caused the
recession; and, establishing a strategy for rebuilding our economy. And the budget process didn't start with what just makes good common sense: trim the waste before
adding programs with exorbitant costs. When money is tight, that's what any smart large or small business does; any smart family for that matter.
How can we afford to bring all these new programs online simultaneously without severe consequences to present and future generations (political - i.e. China owning our
debt; and economic - 2/3 of future budgets may be interest on our spending)? Am I missing something?
Moderation in terms of spending seems to be something neither the Bush administration, nor the Obama administration, favors.
I hope I'm wrong.
Several more things bother me about the new budget. First, wealthy people making over $250,000 will have charitable deductions cut by 11.6% - from $396 on a $1,000 gift to
a nonprofit to $280. The administration says it won't matter; people will give anyway. It might not matter much, but I predict it will matter some. Very few cash strapped
non-profits are prepared to take even a 10% reduction in what they now receive and particularly not in this economy where donations are likely to go down. Non-profits should
be actively contacting Congress and the President to eliminate this exclusion. (Link to Representatives Contact Information)
Second, the cap-and-trade on emissions is targeted to be used to finance renewable energy initiatives and defray the increase in utility bills. But as night follows day, utility
companies will pass on the increases to us. And states hooked on coal plants (like South Carolina) will see utility companies asking for huge increases. The theory is that it
will cause us to become more energy efficient and energy conscious in our homes, and move utility companies to take action about things like the proposed Santee Coal
Plant! But ... Cap-and-trade may also not reduce overall carbon emissions as much as we want (Energy). If we buy carbon credits from say Vietnam, who wouldn't have been
producing carbon anyway, we don't have a net reduction on the planet. And cash strapped citizens do NOT need increased utility bills. In my opinion, cap-and-trade is not the
solution, and this is not the time to implement it if it were part of the solution.
Third, capital gains taxes will increase 5% under the new budget, and for those making $250,000 or more, income tax will go up 4.6%. That is close to reasonable. But those
families making more than $250,000 will additionally pay more payroll tax, less deduction on their home mortgage, less deduction on state from federal taxes and less on
charitable deductions. The effective increase in all of these additional taxes is too much. The smarter thing to do is CUT SPENDING. If you haven't read Government Waste
from A-Z, it's worthwhile. Citizens Against Government Waste provides a lot of information as well. We pay enough in taxes to the federal government. Our problem is
spending; our problem is Congress being loose-as-a-goose with hardworking American's money.
Fourth, the 5% increase in capital gains should have excluded renewable energy technologies of less than 3 carbons. In fact, the capital gains on those technologies should
have been zero. Renewable energy technology has the potential to move us out of these economic hard times and provide jobs. We should do everything possible to offer
incentives to accelerate its coming into being.
Things I like about the budget: no more subsidy for corporate mega-farming and no more high bank subsidies for student loans. Hedge fund managers being subject to
income tax. Reporting real cost of wars. No more shielding profits by American corporations doing business overseas (however we should also close all corporate loopholes
and reduce corporate taxes to 28%). A seven million dollar exclusion for estate taxes (rate should be 33% though). Repeal of oil and gas tax deductions and subsidies.
Adjustment of the Alternative Minimum Tax. Small businesses being allowed to get refunds from previous years when they were profitable for current losses. Elimination of
capital gains taxes on small businesses.
Wall Street Journal
Is it time for U.S. to consider going back to the future and bringing back some Great Depression-era regulation to help fix the current economic mess?
As Floyd Norris points out, Thursday’s slide in the Dow Jones Industrial Average and Standard & Poor’s 500 stock index means today’s markets have fallen as far as in the first
few years of the Great Depression. And the job losses “from this recession are now worse than in 1981-1982, which is generally considered to have been the most severe
economic downturn in the U.S. since the Great Depression,” writes Justin Fox.
So is it time for the government to consider bringing back Glass-Steagall? That piece of Great Depression regulation separated commercial banks from investment banks.
Congress repealed it in 1999 so Citicorp and Travelers could get together.
Paul Volcker, who heads President Barack Obama’s Economic Recovery Advisory Board, thinks instituting something similar to the separations created under Glass-Steagall
might not be such a bad idea, Bloomberg reports. Volcker wants to create a two-tiered banking system. On one tier would be commercial banks, which provide customers with
depository services and access to credit and would be highly regulated. On the other would be securities firms, which would have the freedom to take on more risk and practice
trading, “relatively free of regulation.” There is at least one difference, in Volcker’s plan commercial banks would be able to do stock-and-bond underwriting and provide merger
Reader Joanna H. from Myrtle Beach has a solution!
You can call it the Patriotic Retirement Plan:
There are about 40 million people over 50 in the work force. Pay them $1 million apiece severance for early retirement with the following stipulations:
1) They MUST retire. Forty million job openings - Unemployment fixed.
2) They MUST buy a new American CAR. Forty million cars ordered - Auto Industry fixed.
3) They MUST either buy a house or pay off their mortgage - Housing Crisis fixed.
Since we made the commercial pictured to the left in 2008 (click to view), not one piece of financial reform legislation has been passed. Not one. All the
vulnerabilities that created the financial melt down are still present today.
Has our government become so corrupt that lobbyists "own" both parties and the American people are left with few-to-no champions? Is it a
disturbing lack of focus? Is it ineptitude?
From the economy to the oil spill, Congress seems to be digging us deeper rather than raising us up. We need solutions and action ... now.
Save the middle class, Post & Courier, October 12, 2011
Let’s look at class warfare from another perspective with another set of facts — facts omitted in your Sept. 23 editorial “Poor logic in taxing rich,” and in an opinion piece placed
in the news section on Sept. 25, “It’s not as easy to be rich as it used to be.”
Except for the time right before the Great Depression, the gap between rich and poor in this country has never been greater. The typical American household made less money
last year than a full decade ago (adjusted for inflation). That hasn’t happened in 80 years.
Over 46.2 million of us live in poverty, the highest number in the 52 years of the Census Bureau, while at the same time, the richest 1 percent of us (those making $380,00 or
more) have seen incomes grow 33 percent.
And those living off the stock market (capital gains, dividends, investment and hedge fund managers) pay taxes at 15 percent. That is the same rate as those with taxable
income over $8,500 to $34,500.
Corporations are earning record profits and sitting on more than $2 trillion in cash reserves, which could be used to create jobs.
American corporations currently pay less tax than any of the member nations of the international OECD (Organization for Economic Cooperation and Development). Our rates
are higher, but between loopholes and deductions, our effective rate (the amount actually paid) is lowest.
Last year, 25 of the largest and most profitable corporations paid their CEOs more than their entire corporations paid in taxes.
Between the second quarter of 2009 and the fourth quarter of 2010, our nation’s income grew by $528 billion. Eighty-eight percent of that went to corporate profits, while 1
percent went to wages and salaries.
In contrast, when we were recovering from a downturn in the 1990s, 50 percent went to wages and salaries.
How can that sound fair, smart or even moral?
Great thinkers since Aristotle warned us that a healthy middle class is a necessity to maintaining a democracy. The deteriorating status of our middle class is seriously
endangering our future.
Cutting waste and taxing fairly is the way out of this morass and on to a healthy future. Urge your representatives not to kill the goose (the middle class) that laid the golden egg.
Memorial Day Thoughts on National Defense, 2012
By Robert Reich: American political economist, professor, author, and political commentator. He served in the administrations of Presidents
Gerald Ford and Jimmy Carter and was Secretary of Labor under President Bill Clinton from 1993 to 1997.
We can best honor those who have given their lives for this nation in combat by making sure our military might is proportional to what America
The United States spends more on our military than do China, Russia, Britain, France, Japan, and Germany put together.
With the withdrawal of troops from Afghanistan, the cost of fighting wars is projected to drop – but the “base” defense budget (the annual cost
of paying troops and buying planes, ships, and tanks – not including the costs of actually fighting wars) is scheduled to rise. The base budget
is already about 25 percent higher than it was a decade ago, adjusted for inflation.
One big reason: It’s almost impossible to terminate large defense contracts. Defense contractors have cultivated sponsors on Capitol Hill and located their plants and
facilities in politically important congressional districts. Lockheed Martin, Raytheon, and others have made spending on national defense into America’s biggest jobs program.
So we keep spending billions on Cold War weapons systems like nuclear attack submarines, aircraft carriers, and manned combat fighters that pump up the bottom lines
of defense contractors but have nothing to do with 21st-century combat.
For example, the Pentagon says it wants to buy fewer F-35 joint strike fighter planes than had been planned – the single-engine fighter has been plagued by cost overruns and
technical glitches – but the contractors and their friends on Capitol Hill promise a fight.
The absence of a budget deal on Capitol Hill is supposed to trigger an automatic across-the-board ten-year cut in the defense budget of nearly $500 billion, starting January.
But Republicans have vowed to restore the cuts. The House Republican budget cuts everything else — yet brings defense spending back up. Mitt Romney’s proposed budget
does the same.
Yet even if the scheduled cuts occur, the Pentagon is still projected to spend over $2.7 trillion over the next ten years.
At the very least, hundreds of billions could be saved without jeopardizing the nation’s security by ending weapons systems designed for an age of conventional warfare. We
should shrink the F-35 fleet of stealth fighters. Cut the number of deployed strategic nuclear weapons, ballistic missile submarines, and intercontinental ballistic missiles. And
take a cleaver to the Navy and Air Force budgets. (Most of the action is with the Army, Marines, and Special Forces.)
At a time when Medicare, Medicaid, and non-defense discretionary spending (including most programs for the poor, as well as infrastructure and basic R&D) are in serious
jeopardy, Obama and the Democrats should be calling for even more defense cuts.
A reasonable and rational defense budget would be a fitting memorial to those who have given their lives so we may remain free.