”Because the culture of speculation has made us near-bankrupt, we have no other choice but to embrace a more sane culture of equity, savings, and liquidity based on the creation of real goods and services. There really is no other choice left to us”.

You can bet your bottom dollar, many of Rinaldo’s points will have to be adopted in order for things to look up down the road.

Amen.

Rinaldo is on the right track when listing cuts to the current war on "whatever is convenient" as one that can help America out of this current chaos. How a government can spend $1 billion per day in Iraq (yes thats the real cost) and expect to avoid an economic meltdown is beyond reason. However, many of the suggested steps including a Universal Health Care system and the wildly futile Keynesian idea of digging ditches and building bridges has already been seen to be incredibly harmful. Come to Canada if you want to see the failures of a Universal Health Care system. The current financial chaos is not a product of speculation and greed. This is the result of us collectively living beyond our means. Government will only make it worse. Roosevelt looks good only because the Baby Boom Generation came in and created a source of new capital that could pay off his New Deal debt. Unfortunately, the Baby Boom cannot help America out of this one. Government spending is the last thing that is needed now!

I second that Amen, as something must be done and it has to be part of the "change" movement in America and just maybe a little of the 'going back to our grass roots'. I don't fully understand all the implications above, but what I do comprehend, I support, as I never much liked financial business, but we've got live with our money and make it work for us, as well as respect it and get the general population educated. Of cours, I'm speaking about my own hard earned money ... what's left of it :-)

i like the ideas as much as I understand them. But I think the nation will never reduce the military complex because subconsciously we really do think we hold the world together.

By "real goods and services", do you mean as opposed to selling mortgages and stocks? If a company was valued by its assets of accounts receivables, which went into bad debt, then I can see how a false sense of worth was created from that standpoint.

It's my opinion that personal bankruptcys have been on the rise for many years and may have been a first symptom, which is why they made it harder to get them a few years back. As if that would help.

“I only joined the army for the 60 thousand dollar signing bonus, plus the video games make it look like so much fun . . .”

“I only make nuts and bolts for Boeing, I don’t bomb anybody . . .”

Your state’s senator says, “we need more money to fund our military bases, it creates jobs, and it is the only patriotic thing to do . . .”

This warrior mentality runs deep in the U.S. and coupled with the fact that “free” markets worldwide usually require military bases, U.S. military bases of course, or just simply war, we are in trouble; but it does reflect the same kind of thinking that enables us to bailout people who make 500 million in five years –bankrupt thinking–!

As we annually spend a trillion dollars on the ways of war, asking ourselves “what is the problem”, is not even a rhetorical question, it is just plainly stupid.

U.S. wars keep the money flowing (click name).

Peace

Saving the U.S. Economy

through Trickle-Up Economics

Jane Núñez and Rinaldo Brutoco

STATUS

The federal bailout plan (or “rescue plan,” as it now is being called) did not solve any underlying fundamental weakness in the economy. All it did was buy escape-to-Mexico time for certain members of already overprivileged and overstuffed sectors of the economy by band-aiding the bleeding caused in large part by their greed, as conveniently and suspiciously potentiated by the television-stoked pop-eyed slurpy hunger of the average low-income American to live far far beyond his means, and indeed, by the latter’s ability to do so, courtesy of easy credit conveniently provided by, gasp, the very folks now splashing about giddily in the new flood of worker-blood-soaked governmental largesse. We should at least have the presence of mind to use this expensive and elitist window of opportunity to try to address as best we might the structural basics of what is really wrong so that we may change the fundamentals that created the tornadicly circular and taxpayer-gouging meltdown in the first place. If these needed structural changes are not made, and made quickly, our piling this new federal debt on top of layers of existing private and public debt will have served only to damage an already-struggling economy.

THE BAD NEWS

The economy as we have known it since World War II is so fundamentally broken that it cannot be fixed by merely fine tuning it in its present form, regardless of the level of financial intervention by the government.

THE GOOD NEWS

Once we develop a dramatically different approach to the economy, we will create wealth in the United States, and ultimately abroad, far greater than the wealth created under any outmoded and ineffective post–World War II economic system.

THE FIX

True recovery requires us to replace that old treacherous rider-biting warhorse — trickle-down economics — with trickle-up economics, thereby doing away with the debilitating culture of debt spawned by, again, that old elitist, condescending, self-serving, undemocratic, status-quo-preserving, plutocratic, hypocritical bullshit piece of trickle-down philosophy goods foisted off on the infinitely gullible American public as a serious approach to economic equity and progress. We must immediately and massively fund infrastructure projects ($50 billion to $100 billion per year) to create reasonably well-paying jobs in the various trades. We must radically slow down the rate of home foreclosures by modulating interest rates on home purchase and home equity lines of credit. And we must help American workers attain comprehensive health care, affordable college education for their children, and solid retirement prospects through an intact and adequately funded Social Security system. The following is a punch list of fourteen steps necessary for economic recovery:

Create the modern-day equivalent of the depression era Home Owners’ Loan Corporation, which was designed to buy up and renegotiate troubled mortgages and provide free credit counseling to homeowners with troubled loans (and which managed to close shop less than 20 years later after making a bit of profit for taxpayers). The new Home Owners’ Loan Corporation should similarly have the power to negotiate on behalf of a mortgage holder unable to represent himself in such negotiations. When a mortgage has been chopped up and syndicated into a thousand pieces, generally no one entity, including the servicing agent, has the authority to speak for the mortgage holder. For a host of reasons, it would be wise to put the great bulk of the recently authorized $700 billion into this modern-day Home Owners’ Loan Corporation rather than leave the funds washing around the Treasury Department.

For at least a year, a) freeze interest rates at today’s levels on adjustable rate mortgages and home equity lines of credit and b) prohibit lending institutions from further capital calls on such credit lines in the name of collateral ratio declines stemming from drops in home prices. The president needs to be given the authority to continue this freeze and prohibition on a year-by-year basis for up to five years by notifying Congress of his intent to do so and the reasons for his decision. Taken together, these twin reforms would save any homeowner from foreclosure who is capable of making his current mortgage payments as they come due. The prohibition on further capital calls on home purchase and equity loans based on the falling value of the home would essentially do for homeowners what the new guidance by the Federal Deposit Insurance Corporation and the Financial Accounting Standards Board has done for financial institutions by effectively suspending “mark to market” accounting rules.

Immediately a) allow bankruptcy courts to modify the mortgage payments on a person’s primary home just as bankruptcy courts already modify mortgage payments on commercial properties and b) have Congress hold hearings to reexamine last year’s bankruptcy code amendments that make it more difficult for consumers to use bankruptcy to discharge credit card debt.

Immediately get control of the unregulated market for credit default swaps and prohibit the issuance of any new credit default swaps at least until a new law or Securities and Exchange Commission rule defines credit default swap as a “security” within the meaning of the 1933 and 1934 Securities Acts if any material portion of the underlying insured obligation relates to a company or asset based in the United States. Without this reform, it would be destabilizing to bail out the financial industry by buying up assets that cannot be sold on the private market, because investors would still use swaps to hedge transactions they deemed to be unacceptably risky. If we do not immediately begin to bring the credit default swap market under control, trillions of dollars more of swaps will be created even as we try to deal with the damage caused by the $63 trillion in swaps already outstanding.

Steadily increase margin requirements for all stock purchases by 5 percent per month for each of the next five months so margin requirements are at least 25 percent higher than now and impose subsequent monthly increases as necessary to continue reducing leveraged, speculative purchases of all stocks, including equities, bonds, and commodities. Congress should immediately hold hearings to help determine at what point we will have raised margin requirements high enough to damp down speculation while still providing adequate liquidity for the range of transactions from the relatively nonspeculative to the forward-purchase oriented.

Reevaluate short-selling rules through congressional hearings to determine whether short selling plays a necessary role in the markets and, if so, how it should be regulated and whether the “uptick” rule repealed 14 months ago should be reinstated. That rule, part of the Securities Exchange Act of 1934, was designed to prevent short sellers from speeding up crisis-induced downward spirals in share prices. The rule prohibited any short sale that was not “higher than the last different price.” In other words, a seller could not short sell a stock unless the share price first ticked upward by a fraction of a point.

Restore a needed wall between investment banking and commercial/retail banking. This Glass-Steagall–like distinction between investment banking [banking services for corporations, banks, and the like, including corporate finance/mergers/acquisitions] and commercial/retail banking [banking services for individual customers] is even more critical now that there are no pure investment banking houses of significance left on Wall Street. Goldman and Morgan Stanley have decided to enter retail banking, and the other big investment banks have either been acquired (Bear Stearns by Morgan Chase and Merrill by Bank of America) or liquidated (Lehman Brothers), making the investment banking field fertile ground for new approaches and combinations and for newcomers who would most likely serve the economy best if functioning under clearly defined guidelines.

Launch an immediate project, in the $50 billion to $100 billion range annually for the next five years, to rebuild and expand American infrastructure, including roads, bridges, hospitals, public buildings, water supply, sewerage, broadband, green transit, and alternative energy.

As fast as possible, zero out the $10 billion per month we spend on the Iraq war and reduce our defense spending from $700 billion per year to $600 billion, theoretically making more federal funding available for undertakings such as a crash green-fuels program, infrastructure improvements, and reduction of the national debt. Military spending could be reduced to pay for the entire fourteen-suggestion package and still leave the U.S military with historically extraordinary high level of funding. The American people must realize that even after the minor 10 percent cut we have recommended, military spending would be dramatically higher than when George Bush took office. We are broke and can no longer afford to spend more than the rest of the world combined on military matters. Fundingwise, we have been on a permanent wartime footing in this country since World War II, and such funding, more than any other single item, has led us to the brink of financial ruin. The cost of maintaining a global military presence exceeds its value to us and is not making us safer. The time has come for us to take our responsible role as one nation, albeit a very powerful one, among a whole family of nations. We must quit attempting to run the world at the expense of the American taxpayer. We can no longer afford to have hundreds of military bases around the world nor can we continue to procure weapons at the staggering rate we have for more than sixty years now. President Eisenhower warned us precisely of this danger in his farewell address at the completion of this second term; it is time we took his admonitions to heart.

Enact a universal healthcare system that provides affordable care to every American independently of his or her employment status; the inordinate financial burden on employers to provide their employees with healthcare coverage makes U.S. industry less competitive than industries of many western industrialized countries in which employers do not have to absorb such costs. As an additional measure, require pharmaceutical companies that sell drug products in the United States to sell at the lowest price they charge for the same product anywhere else in the world (no pharmaceutical company refuses to sell drugs in Europe, where comparative prices are as much as 40 percent lower); lowered selling prices would still allow pharmaceutical companies more than adequate profits while dramatically reducing the nation’s healthcare bill. These two healthcare proposals will be especially helpful to those who are currently underinsured or uninsured (statistically likely to be the same population facing foreclosures and bankruptcies) and to those whose general healthcare needs are increasing because of declining overall health (such as the elderly, who are faced with a disproportionate burden of paying for our broken healthcare system even as their incomes are declining).

Immediately cease the taxation of companies for the dividends they pay out (which unfairly has shareholders pay taxes doubly, first as owners of a company that brings in earnings for its investors and then again as individuals who must pay income taxes on their own personal dividend earnings). Allow companies instead to take a tax deduction for dividend payments just as they already take for interest payments, with the benefit of a) decreasing the incentives for companies to assume more debt than is absolutely necessary, b) increasing the incentives for companies to pay dividends, c) increasing federal tax revenue as a result of the higher tax rates on dividends received by shareholders than on dividends paid out by companies, and d) allowing the individual investor, 401(k) plan holder, IRA holder, and the like to make investment decisions based on companies’ actual dividends rather than on some number that is subject to manipulation (companies would no longer be judged by a price/earnings ratio that can be manipulated but rather by a dividend/earnings ratio that cannot; a company’s dividend payment amount cannot be hidden or cynically misrepresented by application of any known accounting sleight of hand, a common, deceptive, and hell-spawned practice that tempts people to trick other people and make the whole stock market thing more oogie-oogie than it has to be (or indeed even should be at all), leading to an underlying ethos of dishonesty and fudging that breeds me-firstism and monetary and financial ruthlessness, leading ultimately to disregard for other human beings here and abroad and to a miserable life experience ultimately for oneself and other human beings with whom one comes into direct or indirect contact (100 percent of the earth’s population).

To discourage speculative trading and raise federal revenues, reinstitute the federal ¼ percent securities transfer tax like the one in effect in the United States between 1914 and 1966 and still in effect in the United Kingdom and other areas of the world. A group of Democrats, averring that such a tax would raise $150 billion a year for the federal government, included a securities transfer tax provision in the “No Bailouts Act” introduced after the House voted down the first bailout plan.

Ensure the effectiveness, fairness, and probity of the oversight or supervisory panel created as part of the bailout plan for rescuing financial institutions via the purchase of these institutions’ soured assets. Such a strong and highly principled panel will be necessary to ensure the fairness to taxpayers of the contracts that the Treasury Department will need to enter into with financial experts to manage those assets. What must happen next is for the Treasury to write the rules it will play by, have the Congress review those rules to ensure they provide for adequate oversight, and then have the rules take the full force of law.

Immediately create a temporary financing fund for state, county, and city government entities to provide relief from funding shortfalls caused by the economic downturn’s falling tax revenues. The entities should be required to guarantee repayment with a priority lien against future tax receipts on some equitable basis. The fund is not intended to encourage governments’ deficit spending but to provide liquidity at a time that banks are unwilling to provide bridge financing. In addition, provide a governmental financing authority for state, county, and city entities until the market for revenue-backed municipal bonds and the state financing of revenue-backed infrastructure projects normalize.

WON’T THESE FOURTEEN SUGGESTIONS

TEND TO MAKE OUR ECONOMY MORE SLUGGISH?

The domestic economic activity that will be stimulated by our fourteen suggestions will bring new clarity, fairness, and rationality to our economic and financial dealings with each other, reigniting our economy to levels of life-enhancing productivity and vibrancy as yet undreamed of. The only way we can ever pay off the massive federal deficit we have accumulated is to recreate our vision of how we can most fairly compensate each other for the energy expended each to each in the pursuit of our lives’ dreams, so that we generate far higher levels of real wealth, democratically and ecologically redefined and more equitably distributed, favoring all our populace, not just a privileged and ethically challenged few who live like royalty from the bread of other people’s sweat. Let us move to enhance our country’s economic transparency and accountability, protecting the pocketbook of the common man, in order to optimize and make maximal use of the special skills and talents of every single one of our citizens equally. Government’s issuance of regulations and its selective handing out of sweat-soaked taxpayer-squeezed largesse and elitist and expensive rescue packages must be a one-time-only event, and we must use the temporary respite it seems to provide from our economic panic to ensure that the ultimate benefits will be directed toward the well-being of all of us, not just a few of us. Changes are crying out to be made. This shift can be achieved by implementing the fourteen points suggested, which in tandem will contribute to necessary structural changes in our economy and to greater clarity and fairness in the way we do business as individuals, as a community, and as citizens of the world. Because of the famous “multiplier effect,” implementing the suggestions will contribute measurably to the creation of an economy dramatically larger and more efficient than we can currently envision in all its particulars, and we must hunker down, shoulder to the wheel, demanding accountability and requiring from ourselves a willingness to live within our current means and to continue to give good solid value for the money we do receive, never discouraged by the lack of conscience of those who only Seem to be succeeding more than we. The earth continues to turn, time wounds all heels, and the wheels of justice grind slowly but exceedingly fine. Transparency and fair dealing are the only way. Let others muddy the waters. We shall take a vow never to contribute to that sullying but rather to keep on toward the light as Our Heavenly Father gives us to seek it, doing unto others as we would have them do unto us.

The current economic crisis is actually a blessing. No amount of tinkering with the existing “trickle-down” approach to the economy could ever create the wealth necessary to rebuild U.S. society. Because the culture of speculation has made us near bankrupt, we have no alternative but to embrace a more sane culture of equity, savings, and liquidity based on the creation of real goods and services. There really is no other choice left to us.
We must remember Winston Churchill’s wartime observation, “The Americans can always be counted upon to do the right thing — after they have exhausted all other alternatives.” The current crisis makes it abundantly clear that we have exhausted all other alternatives. It is now time to embrace some old-fashioned common sense, acting wisely at this very moment, before the window of opportunity closes, making any subsequent attempt to restart increasingly painful and less efficient. Let us finally get off the endless wheel of financial suffering.

Saving the U.S. Economy

through Trickle-Up Economics

Jane Núñez and Rinaldo Brutoco

STATUS

The federal bailout plan (or “rescue plan,” as it now is being called) did not solve any underlying fundamental weakness in the economy. All it did was buy escape-to-Mexico time for certain members of already overprivileged and overstuffed sectors of the economy by band-aiding the bleeding caused in large part by their greed, as conveniently and suspiciously potentiated by the television-stoked pop-eyed slurpy hunger of the average low-income American to live far far beyond his means, and indeed, by the latter’s ability to do so, courtesy of easy credit conveniently provided by, gasp, the very folks now splashing about giddily in the new flood of worker-blood-soaked governmental largesse. We should at least have the presence of mind to use this expensive and elitist window of opportunity to try to address as best we might the structural basics of what is really wrong so that we may change the fundamentals that created the tornadicly circular and taxpayer-gouging meltdown in the first place. If these needed structural changes are not made, and made quickly, our piling this new federal debt on top of layers of existing private and public debt will have served only to damage an already-struggling economy.

THE BAD NEWS

The economy as we have known it since World War II is so fundamentally broken that it cannot be fixed by merely fine tuning it in its present form, regardless of the level of financial intervention by the government.

THE GOOD NEWS

Once we develop a dramatically different approach to the economy, we will create wealth in the United States, and ultimately abroad, far greater than the wealth created under any outmoded and ineffective post–World War II economic system.

THE FIX

True recovery requires us to replace that old treacherous rider-biting warhorse — trickle-down economics — with trickle-up economics, thereby doing away with the debilitating culture of debt spawned by, again, that old elitist, condescending, self-serving, undemocratic, status-quo-preserving, plutocratic, hypocritical bullshit piece of trickle-down philosophy goods foisted off on the infinitely gullible American public as a serious approach to economic equity and progress. We must immediately and massively fund infrastructure projects ($50 billion to $100 billion per year) to create reasonably well-paying jobs in the various trades. We must radically slow down the rate of home foreclosures by modulating interest rates on home purchase and home equity lines of credit. And we must help American workers attain comprehensive health care, affordable college education for their children, and solid retirement prospects through an intact and adequately funded Social Security system. The following is a punch list of fourteen steps necessary for economic recovery:

1. Create the modern-day equivalent of the depression era Home Owners’ Loan Corporation, which was designed to buy up and renegotiate troubled mortgages and provide free credit counseling to homeowners with troubled loans (and which managed to close shop less than 20 years later after making a bit of profit for taxpayers). The new Home Owners’ Loan Corporation should similarly have the power to negotiate on behalf of a mortgage holder unable to represent himself in such negotiations. When a mortgage has been chopped up and syndicated into a thousand pieces, generally no one entity, including the servicing agent, has the authority to speak for the mortgage holder. For a host of reasons, it would be wise to put the great bulk of the recently authorized $700 billion into this modern-day Home Owners’ Loan Corporation rather than leave the funds washing around the Treasury Department.

2. For at least a year, a) freeze interest rates at today’s levels on adjustable rate mortgages and home equity lines of credit and b) prohibit lending institutions from further capital calls on such credit lines in the name of collateral ratio declines stemming from drops in home prices. The president needs to be given the authority to continue this freeze and prohibition on a year-by-year basis for up to five years by notifying Congress of his intent to do so and the reasons for his decision. Taken together, these twin reforms would save any homeowner from foreclosure who is capable of making his current mortgage payments as they come due. The prohibition on further capital calls on home purchase and equity loans based on the falling value of the home would essentially do for homeowners what the new guidance by the Federal Deposit Insurance Corporation and the Financial Accounting Standards Board has done for financial institutions by effectively suspending “mark to market” accounting rules.

3. Immediately a) allow bankruptcy courts to modify the mortgage payments on a person’s primary home just as bankruptcy courts already modify mortgage payments on commercial properties and b) have Congress hold hearings to reexamine last year’s bankruptcy code amendments that make it more difficult for consumers to use bankruptcy to discharge credit card debt.

4. Immediately get control of the unregulated market for credit default swaps and prohibit the issuance of any new credit default swaps at least until a new law or Securities and Exchange Commission rule defines credit default swap as a “security” within the meaning of the 1933 and 1934 Securities Acts if any material portion of the underlying insured obligation relates to a company or asset based in the United States. Without this reform, it would be destabilizing to bail out the financial industry by buying up assets that cannot be sold on the private market, because investors would still use swaps to hedge transactions they deemed to be unacceptably risky. If we do not immediately begin to bring the credit default swap market under control, trillions of dollars more of swaps will be created even as we try to deal with the damage caused by the $63 trillion in swaps already outstanding.

5. Steadily increase margin requirements for all stock purchases by 5 percent per month for each of the next five months so margin requirements are at least 25 percent higher than now and impose subsequent monthly increases as necessary to continue reducing leveraged, speculative purchases of all stocks, including equities, bonds, and commodities. Congress should immediately hold hearings to help determine at what point we will have raised margin requirements high enough to damp down speculation while still providing adequate liquidity for the range of transactions from the relatively nonspeculative to the forward-purchase oriented.

6. Reevaluate short-selling rules through congressional hearings to determine whether short selling plays a necessary role in the markets and, if so, how it should be regulated and whether the “uptick” rule repealed 14 months ago should be reinstated. That rule, part of the Securities Exchange Act of 1934, was designed to prevent short sellers from speeding up crisis-induced downward spirals in share prices. The rule prohibited any short sale that was not “higher than the last different price.” In other words, a seller could not short sell a stock unless the share price first ticked upward by a fraction of a point.

7. Restore a needed wall between investment banking and commercial/retail banking. This Glass-Steagall–like distinction between investment banking [banking services for corporations, banks, and the like, including corporate finance/mergers/acquisitions] and commercial/retail banking [banking services for individual customers] is even more critical now that there are no pure investment banking houses of significance left on Wall Street. Goldman and Morgan Stanley have decided to enter retail banking, and the other big investment banks have either been acquired (Bear Stearns by Morgan Chase and Merrill by Bank of America) or liquidated (Lehman Brothers), making the investment banking field fertile ground for new approaches and combinations and for newcomers who would most likely serve the economy best if functioning under clearly defined guidelines.

8. Launch an immediate project, in the $50 billion to $100 billion range annually for the next five years, to rebuild and expand American infrastructure, including roads, bridges, hospitals, public buildings, water supply, sewerage, broadband, green transit, and alternative energy.

9. As fast as possible, zero out the $10 billion per month we spend on the Iraq war and reduce our defense spending from $700 billion per year to $600 billion, theoretically making more federal funding available for undertakings such as a crash green-fuels program, infrastructure improvements, and reduction of the national debt. Military spending could be reduced to pay for the entire fourteen-suggestion package and still leave the U.S military with historically extraordinary high level of funding. The American people must realize that even after the minor 10 percent cut we have recommended, military spending would be dramatically higher than when George Bush took office. We are broke and can no longer afford to spend more than the rest of the world combined on military matters. Fundingwise, we have been on a permanent wartime footing in this country since World War II, and such funding, more than any other single item, has led us to the brink of financial ruin. The cost of maintaining a global military presence exceeds its value to us and is not making us safer. The time has come for us to take our responsible role as one nation, albeit a very powerful one, among a whole family of nations. We must quit attempting to run the world at the expense of the American taxpayer. We can no longer afford to have hundreds of military bases around the world nor can we continue to procure weapons at the staggering rate we have for more than sixty years now. President Eisenhower warned us precisely of this danger in his farewell address at the completion of this second term; it is time we took his admonitions to heart.

10. Enact a universal healthcare system that provides affordable care to every American independently of his or her employment status; the inordinate financial burden on employers to provide their employees with healthcare coverage makes U.S. industry less competitive than industries of many western industrialized countries in which employers do not have to absorb such costs. As an additional measure, require pharmaceutical companies that sell drug products in the United States to sell at the lowest price they charge for the same product anywhere else in the world (no pharmaceutical company refuses to sell drugs in Europe, where comparative prices are as much as 40 percent lower); lowered selling prices would still allow pharmaceutical companies more than adequate profits while dramatically reducing the nation’s healthcare bill. These two healthcare proposals will be especially helpful to those who are currently underinsured or uninsured (statistically likely to be the same population facing foreclosures and bankruptcies) and to those whose general healthcare needs are increasing because of declining overall health (such as the elderly, who are faced with a disproportionate burden of paying for our broken healthcare system even as their incomes are declining).

11. Immediately cease the taxation of companies for the dividends they pay out (which unfairly has shareholders pay taxes doubly, first as owners of a company that brings in earnings for its investors and then again as individuals who must pay income taxes on their own personal dividend earnings). Allow companies instead to take a tax deduction for dividend payments just as they already take for interest payments, with the benefit of a) decreasing the incentives for companies to assume more debt than is absolutely necessary, b) increasing the incentives for companies to pay dividends, c) increasing federal tax revenue as a result of the higher tax rates on dividends received by shareholders than on dividends paid out by companies, and d) allowing the individual investor, 401(k) plan holder, IRA holder, and the like to make investment decisions based on companies’ actual dividends rather than on some number that is subject to manipulation (companies would no longer be judged by a price/earnings ratio that can be manipulated but rather by a dividend/earnings ratio that cannot; a company’s dividend payment amount cannot be hidden or cynically misrepresented by application of any known accounting sleight of hand, a common, deceptive, and hell-spawned practice that tempts people to trick other people and make the whole stock market thing more oogie-oogie than it has to be (or indeed even should be at all), leading to an underlying ethos of dishonesty and fudging that breeds me-firstism and monetary and financial ruthlessness, leading ultimately to disregard for other human beings here and abroad and to a miserable life experience ultimately for oneself and other human beings with whom one comes into direct or indirect contact (100 percent of the earth’s population).

12. To discourage speculative trading and raise federal revenues, reinstitute the federal ¼ percent securities transfer tax like the one in effect in the United States between 1914 and 1966 and still in effect in the United Kingdom and other areas of the world. A group of Democrats, averring that such a tax would raise $150 billion a year for the federal government, included a securities transfer tax provision in the “No Bailouts Act” introduced after the House voted down the first bailout plan.

13. Ensure the effectiveness, fairness, and probity of the oversight or supervisory panel created as part of the bailout plan for rescuing financial institutions via the purchase of these institutions’ soured assets. Such a strong and highly principled panel will be necessary to ensure the fairness to taxpayers of the contracts that the Treasury Department will need to enter into with financial experts to manage those assets. What must happen next is for the Treasury to write the rules it will play by, have the Congress review those rules to ensure they provide for adequate oversight, and then have the rules take the full force of law.

14. Immediately create a temporary financing fund for state, county, and city government entities to provide relief from funding shortfalls caused by the economic downturn’s falling tax revenues. The entities should be required to guarantee repayment with a priority lien against future tax receipts on some equitable basis. The fund is not intended to encourage governments’ deficit spending but to provide liquidity at a time that banks are unwilling to provide bridge financing. In addition, provide a governmental financing authority for state, county, and city entities until the market for revenue-backed municipal bonds and the state financing of revenue-backed infrastructure projects normalize.

WON’T THESE FOURTEEN SUGGESTIONS

TEND TO MAKE OUR ECONOMY MORE SLUGGISH?

The domestic economic activity that will be stimulated by our fourteen suggestions will bring new clarity, fairness, and rationality to our economic and financial dealings with each other, reigniting our economy to levels of life-enhancing productivity and vibrancy as yet undreamed of. The only way we can ever pay off the massive federal deficit we have accumulated is to recreate our vision of how we can most fairly compensate each other for the energy expended each to each in the pursuit of our lives’ dreams, so that we generate far higher levels of real wealth, democratically and ecologically redefined and more equitably distributed, favoring all our populace, not just a privileged and ethically challenged few who live like royalty from the bread of other people’s sweat. Let us move to enhance our country’s economic transparency and accountability, protecting the pocketbook of the common man, in order to optimize and make maximal use of the special skills and talents of every single one of our citizens equally. Government’s issuance of regulations and its selective handing out of sweat-soaked taxpayer-squeezed largesse and elitist and expensive rescue packages must be a one-time-only event, and we must use the temporary respite it seems to provide from our economic panic to ensure that the ultimate benefits will be directed toward the well-being of all of us, not just a few of us. Changes are crying out to be made. This shift can be achieved by implementing the fourteen points suggested, which in tandem will contribute to necessary structural changes in our economy and to greater clarity and fairness in the way we do business as individuals, as a community, and as citizens of the world. Because of the famous “multiplier effect,” implementing the suggestions will contribute measurably to the creation of an economy dramatically larger and more efficient than we can currently envision in all its particulars, and we must hunker down, shoulder to the wheel, demanding accountability and requiring from ourselves a willingness to live within our current means and to continue to give good solid value for the money we do receive, never discouraged by the lack of conscience of those who only Seem to be succeeding more than we. The earth continues to turn, time wounds all heels, and the wheels of justice grind slowly but exceedingly fine. Transparency and fair dealing are the only way. Let others muddy the waters. We shall take a vow never to contribute to that sullying but rather to keep on toward the light as Our Heavenly Father gives us to seek it, doing unto others as we would have them do unto us.

The current economic crisis is actually a blessing. No amount of tinkering with the existing “trickle-down” approach to the economy could ever create the wealth necessary to rebuild U.S. society. Because the culture of speculation has made us near bankrupt, we have no alternative but to embrace a more sane culture of equity, savings, and liquidity based on the creation of real goods and services. There really is no other choice left to us.
We must remember Winston Churchill’s wartime observation, “The Americans can always be counted upon to do the right thing — after they have exhausted all other alternatives.” The current crisis makes it abundantly clear that we have exhausted all other alternatives. It is now time to embrace some old-fashioned common sense, acting wisely at this very moment, before the window of opportunity closes, making any subsequent attempt to restart increasingly painful and less efficient. Let us finally get off the endless wheel of financial suffering.