Sunday, February 28, 2010

Republicans Sure Do Love them Some Big Government

Opening Statement

(If you don't feel like reading, watch Rachel Maddow dismantle the GOP's stimulus hypocrisy here. You can also see the complete list of hypocritical Republicans on the stimulus here.)

Anti-government Republicans love big government. Yep. It's true.

I was surprised too, when I found out.

See, I had just assumed that when someone is elected to a national office to vote on national policy, they'd do it, for, you know, the good of the country. Or at the very least, the good of their district. I reckon that still holds true for most elected officials, unless you happen to be a Republican. Particularly if the policy in question is the $787 billion stimulus package. Or national health care reform.

February 2009
About a year ago, President Obama signed the American Recovery and Re-Investment Act of 2009, which was comprised of hundreds of billions of dollars in public works projects, aimed at getting people back to work in the midst of a recession. And, in doing so, bettering our infrastructure at the same time. And we all remember how Eric Cantor (R-VA) and John Boehner (R-OH) led the charge against the stimulus bill, even clapping for themselves when the vote had come through. Not one Republican voted for the stimulus. All of them who spoke on it spoke against it. They called it wasteful, pork-barrel, big government spending that wasn't going to do any good for jobs, or infrastructure, or the economy. Just more big nasty government.

Cue right-wing talk radio pundits and FOX news anchors decrying this bill as a Stalinist, Fascist, Marxist, Communist, elitist policy that hurts America and helps the terrorists. Cue the national dialogue reaching a fever pitch about how these mean nasty Democrats are shoving government down our throats and gosh gee golly willikers let's throw some tea bags to show how mad we are.

Well, that's what they said.

Here's what they actually did.

Unabashed Republican Hypocrisy
Now, when that money goes to their home districts, the story about the stimulus is a lot different. All of these Republicans voted against the stimulus after repeatedly trashing it as wasteful pork-barrel spending. These Republicans applauded themselves in the House chamber when the vote tally showed that zero Republicans voted for it. But all 23 of these Republicans loooooove them some big government spending. Keep in mind, I'm only using these as examples. There are plenty more where this came from. About 91, to be exact. One of the stimulus' biggest opponents?

That'd be Republican Governor Haley Barbour (R-MS), who had been unwilling to take $2.6B in stimulus funds for health care, education, and public works. He has an impressive resume as a chief GOP strategist.

-Barbour is one of the national GOP's big boys, and was the national RNC chairman when the Republicans took over congress for the first time ever, back in 1994.
-He was the most profitable lobbyist on K Street before running for Governor.
-He's even been found to be the engineer behind the GOP's total obstruction of anything progressive in Washington, encouraging Republicans to not unveil any policy of their own, but to instead just bash democratic policy and completely abandon bipartisanship. This is all a devious political effort to win votes in 2010, to frustrate voters with democrats being unable to get anything done, even though Republicans are doing all of the obstruction.

All of this gives the impression that if anyone is against a big spending program from big government, it'd be Governor Barbour. Well, if you click on Haley Barbour's name a few paragraphs above, you'll be taken to a NYT article on the Mississippi STEPS program, which uses stimulus funds for the private sector to hire employees. Barbour is in full support of this program, which wouldn't be possible without federal stimulus dollars.

"It’s welfare to work...The real economy that generates jobs generates private-sector jobs, from whence come taxes and quality of life for people."
Gov. Haley Barbour

Even though he goes on to bash the federal money coming to the state, Barbour grudgingly admits that Mississippi needs the help. From the article-

Now the problem facing Mississippi and other states is the calendar: The welfare money in the stimulus bill must be in the process of being spent by the end of September. Mr. Barbour said he hoped the program would be extended so more jobs could be created.

But Barbour isn't alone. There are plenty of Republicans who see the value of big government when it helps their constituents.

GOP Hypocrisy on the American Recovery and Re-Investment Act of 2009

-Rep. Phil Gingrey (R-GA) called this "worse than wasteful" and a "boondoggle." That was before he handed out a $625,000 check to the Cedartown City Commission, made up of funds that he voted against giving out.

-Rep. John Mica (R-FL) is glad that some of the $787 billion will go to his district, to fund a beleaguered commuter rail project.

"The timing couldn't be better.
-Rep. John Mica

-Rep. Frank Wolf (R-VA) was mad that Gov. Tim Kaine was slow on spending stimulus finds that had been allocated to his district.

We could use that money desperately...there are a lot of things up here that money could be used for.
-Rep. Frank Wolf

-Rep. Bill Shuster (R-PA) brought some stimulus funds to his cash-strapped district back home, praising the bill for giving jobs to several dozen new workers in a sewage treatment plant.

-Sen. Kay Bailey Hutchison (R-TX) and the rest of the Texas delegation pushed for $3 billion in stimulus dollars for NASA, to help retain thousands of aerospace jobs.

"...This funding will spur growth in Texas communities."
-Sen. Kay Bailey Hutchison

-Sen. Richard Burr (R-NC) was a big opponent of the stimulus, until money went to his state.

"[ARRA is] a great thing for this county. we're not accustomed to federal dollars of that magnitude finding its way to North Carolina."
-Sen. Richard Burr

-Sen. Kit Bond (R-MO) said a lot of things about the stimulus. Like this little tidbit

"“Hold on to your wallets folks because with the passage of this trillion-dollar baby the Democrats will be poised to spend as much as $3 trillion in your tax dollars,” Bond said. “Unfortunately, this bill stimulates the debt, it stimulates the growth of government, but it doesn’t stimulate jobs,” Bond insisted.

Well, that was before Bond decided to tour his state and talk about how great all that $2B of stimulus money was for low-income housing for the elderly and impoverished. Getting federal government money is great, but only for Missouri, apparently. Bond said the stimulus would "create jobs and ultimately spur economic opportunities."

-Rep. Joe Wilson (R-SC) is also a big fan of big government. Now before you shout "YOU LIE!" at me, take a look at Wilson, wanting federal stimulus money for his district from the Department of Agriculture.

"We know their endeavor will provide jobs and investment in one of the poorer sections of the Congressional District," Wilson wrote to Secretary of Agriculture Tom Vilsack in an August 2009 letter excerpted by the Times.

-Sen. Bob Bennett (R-UT) is the state's junior senator who vehemently opposed the American Recovery and Re-Investment Act.

"The only thing this bill will stimulate is the national debt."
-Sen. Bob Bennett

But he had requested $50 billion in stimulus money for his state from the EPA and the USDA before voting NO to it. Which Bob Bennett do the Utes like? The chest-beating no-to-big-government blowhard, or the senator who is looking out for his state, which is suffering from recession?

""I recognize the extensive demands being placed on these funds and, therefore, greatly appreciate any funding considerations you give to the projects of Utah...The addition of federal funds would maximize the stimulative effect on the local economy."
-Sen. Bob Bennett

-Rep. Pat Tiberi (R-OH) was a big stimulus opponent who also noted that federal stimulus dollars for broadband internet expansion would help his district's economy.

"The project could support numerous jobs in Ohio."
-Rep. Pat Tiberi

-Mary Bono Mack (R-CA) was also one of the 111 House Republicans who voted NO on the stimulus package, and then toured her district talking about how great the stimulus was after she had requested $4.2 million to fight homelessness.

"This funding will provide much-needed assistance."
-Rep. Mary Bono Mack

-Rep. Peter Hoekstra (R-MI) decried the $787 billion spending package as wasteful, but still requested $3M for harbor improvements in his district.

"Safe and navigable harbors are economic engines that drive the communities that surround them."
-Rep. Peter Hoekstra

-Sen. Mike Johanns (R-NE), the former Governor of Nebraska, and Secretary of Agriculture under George W. Bush, was one of the senate's loudest critics of Obama and the stimulus package. Which Mike Johanns did Nebraskans vote for? Was it this guy-

Mr. President, I rise today to say that rarely has a crystal ball proved so regrettably accurate. Many warned, as did I, that the stimulus would amount to a mountain of wasted money. It produced record deficits and thus far, little else."

"The money would simply never reach the economy."

"It would be hard for me to imagine that we are going to be creating many jobs here."

-Sen. Mike Johanns

...Or was it this guy, who requested stimulus money for Nebraska from the USDA?

"The proposed project would create 38 new jobs and bring broadband to eight hospitals, five colleges, 16 libraries and 161 K-12 schools."
-Sen. Mike Johanns

-Sen. Lamar Alexander (R-TN) joined in the anti-stimulus chorus in Washington, before requesting stimulus money to go back home.

"This is spending, not stimulus."
-Sen. Lamar Alexander

...Although a letter he sent to USDA Secretary Tom Vilsack tells it a little differently.

"It is anticipated that the project will create over 200 jobs in the first year and at least another 40 new jobs in the following years."
-Sen. Lamar Alexander

-Rep. John Linder (R-GA) requested dirty, dirty stimulus money from that wasteful, pork-laden bill go to his district. After he voted against the bill. In early 2009, Linder, ranked by the ACU as one of the most conservative in the House, crticized the stimulus.

"(new unemployment numbers) only reinforce the fact that the $787 billion 'stimulus' signed into law eight months ago has done nothing for job growth in this country."
-Rep. John Linder

But Linder might have a bone to pick with Linder, who later said-

"The employment opportunities created by this program would be quickly utilized."
-Rep. John Linder

-Rep. Mike Castle (R-DE) went around handing out fat checks in his district, which were made possible through $5.2M in federal stimulus dollars from the Department of Housing and Urban Development, to fight homelessness.

"It is imperative we provide those programs serving Delaware’s most disadvantaged families and individuals with the resources necessary to house, feed, and protect those in desperate need."
-Rep. Mike Castle

-Sen. James Inhofe (R-OK) once called the stimulus bill a "giant welfare package." But that didn't stop him from requesting $25M in stimulus money from the EPA for the Tar Creek cleanup in his state.

"This funding not only completes the relocation phase being conducted by the Lead Impacted Communities Relocation Assistance Trust but provides the necessary funds to clean up this area."
-Sen. James Inhofe

-Rep. Jack Kingston (R-GA) joins the rest of the Georgia delegation as a congressman who voted against the stimulus package saying it was "wasteful," before requesting some of that wasteful money for their own district because it creates jobs/repairs public infrastructure. Here's what he had to say about it last February.

"(The ARRA is) fundamentally flawed and doesn’t represent the change we deserve or the stimulus we need."
-Rep. Jack Kingston

But ol' Jackie boy requested money from the stimulus go to Alma and Jesup Counties, so those police departments could hire more entry-level officers to fight crime on the streets. And he has the gall to take credit for that stimulus money by not once mentioning the word "stimulus" in statements to his district. And manages to even bash the federal government after he requested federal money.

“We’ve seen from experience that local initiatives go a lot further toward solving local problems than policies set in Washington...This funding will provide tax relief by saving local tax dollars.”
-Rep. Jack Kingston

Mind-boggling as it is, Kingston's office says that he remains opposed to the stimulus package.

-Rep. John Carter (R-TX) distributed press releases talking about how bad the stimulus package was, how we should repeal it and give the money back to the taxpayers. Thing is, Carter is completely aware that the stimulus is giving money back to the taxpayers in his district. Specifically through $3B for NASA, requested by the entirety of the Texas delegation. Carter himself also requested $621 million in hospital projects in his district.

"(ARRA is) a victory for the economy in Central Texas."
-Rep. John Carter

-Rep. Glenn Thompson (R-PA) made no bones about his opposition to the stimulus, along with the rest of his colleagues. But that didn't stop him from recognizing that there are hurting people in his district who could use some jobs and some federal investment in local public works projects. Here's a sample from the article I linked to above, that talks about the 7,500 jobs to be created or saved in Pennsylvania's 5th district.

Congressman Glenn "GT" Thompson, R-Howard, who represents the 5th District at a national level, said he hoped the residents within the county would benefit from the plan's massive spending and tax cuts.

Like Pennsylvania's 5th district, there are places all over the United States that are benefiting from the recovery packages. And we can track all of the spending for the next year or so, courtesy of the internet. Looks like that big bad stimulus may not be so bad after all, according to these Republicans who voted against it.

Well, maybe that's just the wishy-washy, on the fence Republicans not extreme enough for the most extreme Tea Party extremists on the fringe of the far right? Let's look at some House GOP leadership!

-House Republican Leader John Boehner (R-OH) has been, without a doubt, the biggest critic in Congress on the stimulus package. He even threw the bill on the floor during a debate. Here's what he had to say about it just recently, on the anniversary of the bill's signing into law.

"The trillion-dollar stimulus was put together so quickly and so secretively that no member of Congress had a chance to read it before it passed, and it shows. Yet, as poorly conceived and badly executed as the trillion-dollar stimulus was, President Obama and Democrats in Congress still think that Washington is the answer to everything."

“When it comes to slow-moving government spending programs, it’s clear that it doesn’t create the jobs.”

-Rep. John Boehner

You tell 'em, John! That big bad federal government can't do anything right! Right?

"With Ohio’s unemployment rate the highest it’s been in 25 years, I’m pleased that federal officials stepped in to order Ohio to use all of its construction dollars for shovel-ready projects that will create much-needed jobs.”
-Rep. John Boehner

Oh. Well, nevermind. Maybe the House Minority Whip can do a better job standing up for his principles?

-Rep. Eric Cantor (R-VA) is the House's #2 Republican, and even organized the effort for all House Republicans to vote against the ARRA.

Well, that was until he was caught hosting a job fair where half of the employers there had been given money from the stimulus to give jobs to the unemployed. And at this same job fair where 30 organizations who directly benefited from the bill were putting his district to work, he called the stimulus an "utter failure." All of this coming from a guy who repeatedly attacks the president for not doing enough about job creation.

Closing Statement

Like it or not, these Republicans cannot deny that the American economy has been on life support, and the stimulus package is the plug that keeps it running until the economy recovers from the recession. Here are some raw facts that cannot be ignored, no matter how hard these history revisionists and hypocrites may try.

-Over 2 million jobs have been saved or created since the bill was signed into law, with only a quarter of the money spent so far.
-President Obama's claim that 3.5 million jobs will be saved or created by the end of this year is still on track.
-Even though the economy is in a tailspin, economists readily agree that without the stimulus, things would be much, much worse.

And let's remember when Ronald Reagan, savior of modern-day Republicans, faced 10.8 percent unemployment and a 35 percent approval rating because of a bad economy back in 1983. This had came a full year after he had cut taxes for the richest 1 percent, which had increased the deficit even more. Republicans had lost 28 seats in the House in the midterm elections because of voter frustration over jobs. Here are the unemployment numbers from the onset of Reagan's swearing in.

01/1981 - Unemployment rate 7.5% .... Reagan sworn in.
02/1981 - 7.4%
03/1981 - 7.4%
04/1981 - 7.2%
05/1981 - 7.5%
06/1981 - 7.5%
07/1981 - 7.2%
08/1981 - 7.4% *Reagan cuts taxes for top 1% & says unemployment will DROP to 6.9%.
09/1981 - 7.6%
10/1981 - 7.9%
11/1981 - 8.3%
12/1981 - 8.5%
01/1982 - 8.6%
02/1982 - 8.9%
03/1982 - 9.0%
04/1982 - 9.3%
05/1982 - 9.4%
06/1982 - 9.6%
07/1982 - 9.8%
08/1982 - 9.8%
09/1982 - 10.1%
10/1982 - 10.4%
11/1982 - 10.8%

President Obama, on the other hand, has seen unemployment drop from 10.2 percent to 9.7 percent at the beginning of his second year. Gross National Product has gone up 3.5 percent as of the last quarter's reports. This year, the stimulus is expected to grow the economy by anywhere from 1.4 to 4 percent. It could bring down unemployment anywhere from 0.7 percent to 1.8 percent. Obama's approval rating remains around 50 percent, whereas Reagan's had dropped to about 40 percent by that period of his administration.

The stimulus is a great idea. It's keeping this economy afloat, and even Republicans who voted against it are openly praising the good things it's doing for local economies and public works projects. Barack Obama is handling this recession to the very best of his abilities, and is doing a good job so far.

I'll bet Reagan would have been ridden out of office at this point if there was a reactionary, paranoid 24-hour national news cycle back in the eighties.

Tuesday, February 23, 2010

The Case for Financial Reform, and How to Do It

If you read anything I write about the economy or the current recession, please read this. A lot of what I say is going to shock you, and will undoubtedly cause you to furrow your brow and scoff, so I've taken the liberty of painstaking including links and information to back up what I say. Read on and discuss!

Robin Hood Reversed

"The war against working people should be understood to be a real war.... Specifically in the U.S., which happens to have a highly class-conscious business class.... And they have long seen themselves as fighting a bitter class war, except they don’t want anybody else to know about it."
— Noam Chomsky

I think most Americans would agree that a prominent middle class is necessary in every true democracy. The extreme polarization of wealth, with a very few having everything while a great majority are impoverished, is reminiscent of oppressive societies in years past, in other parts of the globe. America, the land of opportunity, should be seen as a place where people who make median incomes can thrive comfortably, raise families, work good jobs, and be healthy. But don't take my word on that. Just ask Aristotle. Or Seymour Lipset, a known scholar on democracy.

But this middle class is being endangered by what I wouldn't hesitate to call a class war between the super-rich and everyone else. The bank bailouts, endless federal reserve money, zero percent interest rates, and tax dollars going toward extravagant Wall Street bonuses for the bankers who caused this mess is all Robin Hood in reverse. Take from the poor, give to the rich. I'm going to list some facts and figures that will shock you. These numbers come from the United States of America, the land of opportunity, and not a third world country.

-50 million Americans live in poverty.
-Half of all American children will depend on food stamps to eat at some point in their childhood.
-Hunger is at an all-time high in the USA.
-Of the 1.4 million Americans who filed for bankruptcy in 2009, 60% of them did so because of medical bills.
-Before the recession ends, 13 million more Americans are going to lose their homes.
-We throw more people in jail than any other country in the world.
-We open a new jail in this country every single week.

And in my own state of Mississippi, child poverty is rampant. It is oppressive. It is disgusting. And it is worsening. 6 out of 10 children in Holmes County are living in poverty. 56% of children in Issaquena County are impoverished. 54% in Coahoma and Sharkey Counties. 53% in Bolivar County. Even half of Leflore County's children are living in poverty. Washington, Yazoo, Sunflower, Jefferson Davis, Quitman, Tallahatchie, Noxubee, Pike, Wilkinson and Jefferson Counties are all also in the top 100 worst counties in America when it comes to child poverty. And these numbers aren't looking to improve anytime soon. If anything, they're going to get worse.

The class war against the working class has been going on a lot longer since the 2008 recession. If we go back to 1972, almost 40 years ago, and check the consumer price index, you'd see that the average worker made $738.48 per week. That figure in 2008 was %598.18.

And if you want to know the true depths of how deep the damage is to the middle class, just look at job creation in the last decade, where we had ZERO net job growth. Middle class families made less in 2008 than they did in 1999. It hasn't been this bad in 70 years.

But that's how the middle class is faring in this economy. Surely Wall Street is feeling the pain, too?

The Rise of the Oligarchs
It's REAL good to be rich right now. There hasn't been a better time to be in the rich 1% of this country since the Gilded Age, pre-1929.

While the poor and the middle class have been languishing since the 1970s, we've seen after-tax income TRIPLE for the top 1% since 1980. Likewise, the bottom 90% has seen their after-tax income go down by 20% in that same time period. Since 2002, this trend has rapidly increased.

Also, did you know that the richest 1% owns 70% of all financial assets? And that this is an all-time high throughout history?

Did you know that 40 years ago, the average CEO made 25 times as much as the average worker? And now, CEOs make 500 times as much as we do?

Here's one more for you. If you can stomach it.

400 people in this country have more wealth than 155,000,000 people COMBINED. And that gap is increasing as I write this sentence.

Obviously, one can see our tax structure, both in-state and nationally, is skewed against the poor and toward the richest 1%. It's easy to see how progressive taxation would create income equality, lower child poverty rates, and spur the rebirth of the middle class. However, being that taxing the rich is such a touchy topic for politicians who get their money from the rich people who would be taxed, nobody wants to talk about that. But if you don't raise taxes, budgets have to be cut. And budget cuts are devastating local governments.

Wall Street's Plunder of Main Street

"For if leisure and security were enjoyed by all alike, the great mass of human beings who are normally stupefied by poverty would become literate and would learn to think for themselves; and when once they had done this, they would sooner or later realize that the privileged minority had no function, and they would sweep it away. In the long run, a hierarchical society was only possible on a basis of poverty and ignorance."
— George Orwell

There's a little town in Alabama called Samson. It's a small town where, last March, a disgruntled worker at a chicken plant killed 11 people. While tragic, there was another happening in Samson that didn't reach the attention of the news media; the national guard was called in to keep order, and patrolled the streets. While this directly defies the Posse Comitatus Act, there was no other choice. Cuts made to the Sheriff's department were so deep that the local law enforcement had been rendered completely unable to do their jobs.

This same chicken plant got hundreds of billions from former Wall Street giants Lehman Brothers and Merrill Lynch to buy out a rival manufacturer. This deal was put together by a banker hired by J.P. Morgan & Chase. And J.P. Morgan came up with the derivatives that bankrupted Jefferson County, Alabama over a sewer project. In that instance, the sharp increase in sewer rates caused people to have to choose between having water or having heat.

In order to make this purchase and hand out subsequent executive bonuses, workers' wages at the chicken plant were cut. However, the debt the company incurred forced it to declare bankruptcy. Thus, the greed of predatory capitalism caused massive layoffs at the plant, completely dismantling the local tax base of Samson. Meanwhile, Wall Street gets richer, fattening their own pockets on the backs of unemployed, disadvantaged middle class workers. And this continues today. Sounds eerily similar to what the corporatocracy (World Bank, IMF, USAID) has done to Latin America for the past 40 years, no?

But this isn't just in America; British officials are saying that their bankers are fueling a "doom loop," and that massive reforms will be necessary to end the plundering that has been victimizing the middle class.

As we continue to coddle the rich 1% and cut public sector budgets that the majority of Americans depend on for jobs and services, we risk putting ourselves in situations like Samson, or in Colorado Springs, CO, the home of Ted Haggard and the Tea Party movement.

From the article:

More than a third of the streetlights in Colorado Springs will go dark Monday. The police helicopters are for sale on the Internet. The city is dumping firefighting jobs, a vice team, burglary investigators, beat cops — dozens of police and fire positions will go unfilled.

The parks department removed trash cans last week, replacing them with signs urging users to pack out their own litter.

Neighbors are encouraged to bring their own lawn mowers to local green spaces, because parks workers will mow them only once every two weeks. If that. Water cutbacks mean most parks will be dead, brown turf by July; the flower and fertilizer budget is zero.

No land-use planning, building inspection, zoning, transportation, parks & recreation, community centers and public pools. Because of drastic budget cuts. States across the union can expect similar situations if progressive taxation continues to be ignored in favor of budget cuts.

The Myth of the Free Market
(It gets a little complicated here, so bear with me.)

The last duty of a central banker is to tell the public the truth."
-Alan Blinder, former Federal Reserve Vice Chairman

Banks started pulling the same stunts here in 2008 that they've been pulling for 40 years in Latin America, Africa, Asia and the Middle East. After the $700 billion bailout and interest rates being slashed to zero by the Fed with money being printed in abundance, banks like Goldman Sachs used that free cash from taxpayers to buy all of our foreclosed property for pennies on the dollar. They then took advantage of the poor real estate market (hampered by the bubble which they caused through predatory lending and excessive subprime loans) and made thousands of percent of profit selling those properties back to us. This is all because the Fed literally has our economy in a stranglehold. Societe Generale Chief Strategist Albert Edwards is openly accusing the Federal Reserve and England's central bank of robbing the poor and middle classes of the USA and the UK.

But we can't completely blame the Fed for the financial meltdown; when Goldman Sachs said they needed $700 billion of our money to stay afloat and loan capital to small businesses, they refused to lend any of it out. The Fed was then forced to slash interest rates and print even more money for the banks. This causes speculation, which leads to more reckless trading and lending, which leads to bubbles that inevitably burst to create another recession. Bubbles exist to move wealth from the working class to the richest .01% through risky investments and toxic asset trading.

Big investment banks also operated as commercial banks, which allows them to get even more money from the federal government. While Goldman got $10 billion in TARP (bailout) money, that's a drop in the bucket when compared to how much federal aid they qualified for as a commercial lending bank. JP Morgan, Citigroup and Bank of America were among some of the other financiers who lined up at the federal trough to stuff our tax dollars into their wallets to continue doing the same things that caused the global meltdown in the first place. In fact, without the Fed, all of these banks would have been rendered insolvent.

However, a deregulatory policy called the Temporary Liquidity Guarantee Program allowed nearly-insolvent banks to shed their disastrous credit histories and borrow on a clean slate, on top of all of the TARP money and Fed money. They were also allowed to gain interest on reserve accounts they are required to keep with the Fed. Basically, our government gave banks more money to reward the banks for existing.

These banks, in turn loaned money back to the Fed through the purchase of treasury bills, paying a 3 to 4 percent interest rate. Sort of like attaching an ATM to the federal reserve, to be used exclusively by Wall Street bankers. Collectively, these big banks borrowed trillions of dollars, sat on it, and refused to loan it out to small businesses and entrepreneurs once the money was given out. In fact, they demanded even MORE money. Essentially, money is going from the government back to the government, but the banks step in every once in awhile and fill their hands with our money.

While this has all been going on, the Fed and the Treasury have been frequently consulting with private advisory boards comprised mainly of Wall Street fat cats. Take, for example, the Treasury Borrowing Advisory Committee, where a J.P. Morgan executive and a Goldman-Sachs executive sit as chairman and vice chairman, respectively. the board advising the Fed includes major players from Bank of New York Mellon and from Capital One. Basically, these big bankers know when they'll be getting truckloads of free money so they can put themselves in position to make the most profitable investments. Kind of like a rigged poker game where the dealer and other players are all in on the scheme, and don't stop until they've taken all of your money.

The Fed has even become brazen in their openness about tight associations with Wall Street bankers. In the above articles, the Fed has been exposed in covering up their role in the AIG bailouts, and about their involvement in the Lehman Brothers bankruptcy debacle.

Now, the nation's six largest banks have set aside a collective $140 billion in bonuses while 14.8 million Americans stand in the unemployment line, and while one fifth of this country is out of work or looking for more work that can actually pay for things like rent, food and bills. We need to care about this, because underemployed people spend 36% less than gainfully employed Americans. This quickly takes a toll on local economies and small businesses, affecting even more jobs and cash flow.

So really, there is no "free" market. Not when our economy is in the hands of a few greedy bankers who have free access to our tax dollars, who can hold businesses that need credit hostage, and who can claim to be "too big to fail" when their unscrupulous practices catch up to them.


"A corporation cannot be ethical; its only responsibility is to turn a profit!"
—Milton Friedman, Economic Adviser to Ronald Reagan

Through the rape of the free market with the help of big banks, Fed Chairman Ben Bernanke, and Treasury Secretaries Hank Paulson (TARP guy, former Goldman-Sachs executive) and Tim Geithner, we have essentially privatized government in and of itself. Our economy is no longer under popular control, and our businesses and jobs are completely at the mercy of the Wall Street fat cats who hold all the cards. But there are things that we can do.

Reinstate the Glass-Steagall Act.
This legislation from the 1930s drew a clear line between commercial banks and investment banks. When Clinton repealed it in 1999, that gave the big Wall Street banks the green light to do what I've just described. Obama putting this back in place would reign in how much federal support big banks are allowed to get. And hopefully keep them honest so they won't rely on the Treasury to fill their pockets.

Institute a Robin Hood Tax
This would be a .05% tax on all bank transactions that don't include members of the public, i.e. bonds, currencies, speculation, derivatives. This would generate hundreds of billions of dollars each year to be used for shoring up the public sector. Essentially, by keeping the banks honest, and taxing them for engaging in risky behavior, it'd be like a new stimulus package every year, directly from Wall Street to Main Street.

Reform our Tax Structure to include a "Fat Cat/Rich Brat" Tax Bracket
When 50 to 60 percent of Americans can't keep up with rising inflation, health care costs, energy costs and grocery costs, it's time to turn the tables against those earning $5,000,000 per year, rich brats thriving off of trust funds, and other wealth that gets passed down through generations that builds simply because it is there.

Did you know that up until Reagan was president, our top income tax rate was never lower than 70%? Or that 2007 (pre-recession) tax returns never showed more than 46,000 earning $5,000,000 or more per year? This tax would effect about half of one percent of this country, and would generate over $100 billion per year in revenue. The total taxable income on all of those tax returns was $670 billion, and about $150 billion of that was income tax, at a 23% rate.

23%. That's the most glaring reason why we need a Fat Cat/Rich Brat tax. If you have taxable income exceeding $10 million, you paid at a lower tax rate than anyone with taxable income between $200,000 and $9,999,999. We could also tax all non-wage income. Why should people who work hard be taxed higher than those who are sitting on their butt, getting money off of accumulated wealth that most people don't have the luxury to have?

The Fat Cat/rich Brat tax could also be a makeup of the estate tax, and we could even exempt family businesses and family homes, as well as farms. The catch would be that the home has to have been lived in 5-10 years before death, lower the threshold and make it a tax on inherited and untaxed wealth. And if the rich brats and fat cats don't like the name of the Rich Brat/Fat Cat tax, we can call it the Trust Fund Baby tax, or the Leech on Society Tax, or the Lazy Brat tax. This would only effect the wealthiest of the wealthiest of the wealthiest, as there were under 14,000 taxable returns filed in 2008. It would be 1/6th of 1% of all income earners. And it would generate billions. Besides, stock, cash, and cash-type assets make up the bulk of all taxable income, so exempting businesses, homes and farms would even further single out trust fund babies.

And what's more, this tax would only apply to 5,000 to 10,000 families in the entire United States. It would force lazy trust fund brats to do something with their lives while allowing homes and businesses to be passed down without worry. Fat cats and rich brats should have to step up and pay their fair share, at least while the rest of us are working two or three jobs so we can pay rent and have food in our fridge.