Here's How to Fix the Wall Street Mess
Friends,
The richest 400 Americans -- that's right, just four hundred people -- own MORE than the bottom 150 million Americans combined. 400 rich Americans have got more stashed away than half the entire country! Their combined net worth is $1.6 trillion. During the eight years of the Bush Administration, their wealth has increased by nearly $700 billion -- the same amount that they are now demanding we give to them for the "bailout." Why don't they just spend the money they made under Bush to bail themselves out? They'd still have nearly a trillion dollars left over to spread amongst themselves!
Of course, they are not going to do that -- at least not voluntarily. George W. Bush was handed a $127 billion surplus when Bill Clinton left office. Because that money was OUR money and not his, he did what the rich prefer to do -- spend it and never look back. Now we have a $9.5 trillion debt. Why on earth would we even think of giving these robber barons any more of our money?
I would like to propose my own bailout plan. My suggestions, listed below, are predicated on the singular and simple belief that the rich must pull themselves up by their own platinum bootstraps. Sorry, fellows, but you drilled it into our heads one too many times: There... is... no... free... lunch. And thank you for encouraging us to hate people on welfare! So, there will be no handouts from us to you. The Senate, tonight, is going to try to rush their version of a "bailout" bill to a vote. They must be stopped. We did it on Monday with the House, and we can do it again today with the Senate.
It is clear, though, that we cannot simply keep protesting without proposing exactly what it is we think Congress should do. So, after consulting with a number of people smarter than Phil Gramm, here is my proposal, now known as "Mike's Rescue Plan." It has 10 simple, straightforward points. They are:
1. APPOINT A SPECIAL PROSECUTOR TO CRIMINALLY INDICT ANYONE ON WALL STREET WHO KNOWINGLY CONTRIBUTED TO THIS COLLAPSE. Before any new money is expended, Congress must commit, by resolution, to criminally prosecute anyone who had anything to do with the attempted sacking of our economy. This means that anyone who committed insider trading, securities fraud or any action that helped bring about this collapse must go to jail. This Congress must call for a Special Prosecutor who will vigorously go after everyone who created the mess, and anyone else who attempts to scam the public in the future.
2. THE RICH MUST PAY FOR THEIR OWN BAILOUT. They may have to live in 5 houses instead of 7. They may have to drive 9 cars instead of 13. The chef for their mini-terriers may have to be reassigned. But there is no way in hell, after forcing family incomes to go down more than $2,000 dollars during the Bush years, that working people and the middle class are going to fork over one dime to underwrite the next yacht purchase.
If they truly need the $700 billion they say they need, well, here is an easy way they can raise it:
a) Every couple who makes over a million dollars a year and every single taxpayer who makes over $500,000 a year will pay a 10% surcharge tax for five years. (It's the Senator Sanders plan. He's like Colonel Sanders, only he's out to fry the right chickens.) That means the rich will still be paying less income tax than when Carter was president. This will raise a total of $300 billion.
b) Like nearly every other democracy, charge a 0.25% tax on every stock transaction. This will raise more than $200 billion in a year.
c) Because every stockholder is a patriotic American, stockholders will forgo receiving a dividend check for one quarter and instead this money will go the treasury to help pay for the bailout.
d) 25% of major U.S. corporations currently pay NO federal income tax. Federal corporate tax revenues currently amount to 1.7% of the GDP compared to 5% in the 1950s. If we raise the corporate income tax back to the level of the 1950s, that gives us an extra $500 billion.
All of this combined should be enough to end the calamity. The rich will get to keep their mansions and their servants, and our United States government ("COUNTRY FIRST!") will have a little leftover to repair some roads, bridges and schools.
3. BAIL OUT THE PEOPLE LOSING THEIR HOMES, NOT THE PEOPLE WHO WILL BUILD AN EIGHTH HOME. There are 1.3 million homes in foreclosure right now. That is what is at the heart of this problem. So instead of giving the money to the banks as a gift, pay down each of these mortgages by $100,000. Force the banks to renegotiate the mortgage so the homeowner can pay on its current value. To insure that this help does no go to speculators and those who have tried to make money by flipping houses, this bailout is only for people's primary residence. And in return for the $100K paydown on the existing mortgage, the government gets to share in the holding of the mortgage so that it can get some of its money back. Thus, the total initial cost of fixing the mortgage crisis at its roots (instead of with the greedy lenders) is $150 billion, not $700 billion.
And let's set the record straight. People who have defaulted on their mortgages are not "bad risks." They are our fellow Americans, and all they wanted was what we all want and most of us still get: a home to call their own. But during the Bush years, millions of them lost the decent paying jobs they had. Six million fell into poverty. Seven million lost their health insurance. And every one of them saw their real wages go down by $2,000. Those who dare to look down on these Americans who got hit with one bad break after another should be ashamed. We are a better, stronger, safer and happier society when all of our citizens can afford to live in a home that they own.
4. IF YOUR BANK OR COMPANY GETS ANY OF OUR MONEY IN A "BAILOUT," THEN WE OWN YOU. Sorry, that's how it's done. If the bank gives me money so I can buy a house, the bank "owns" that house until I pay it all back -- with interest. Same deal for Wall Street. Whatever money you need to stay afloat, if our government considers you a safe risk -- and necessary for the good of the country -- then you can get a loan, but we will own you. If you default, we will sell you. This is how the Swedish government did it and it worked.
5. ALL REGULATIONS MUST BE RESTORED. THE REAGAN REVOLUTION IS DEAD. This catastrophe happened because we let the fox have the keys to the henhouse. In 1999, Phil Gramm authored a bill to remove all the regulations that governed Wall Street and our banking system. The bill passed and Clinton signed it. Here's what Sen. Phil Gramm, McCain's chief economic advisor, said at the bill signing:
"In the 1930s ... it was believed that government was the answer. It was believed that stability and growth came from government overriding the functioning of free markets.
"We are here today to repeal [that] because we have learned that government is not the answer. We have learned that freedom and competition are the answers. We have learned that we promote economic growth and we promote stability by having competition and freedom."I am proud to be here because this is an important bill; it is a deregulatory bill. I believe that that is the wave of the future, and I am awfully proud to have been a part of making it a reality."
This bill must be repealed. Bill Clinton can help by leading the effort for the repeal of the Gramm bill and the reinstating of even tougher regulations regarding our financial institutions. And when they're done with that, they can restore the regulations for the airlines, the inspection of our food, the oil industry, OSHA, and every other entity that affects our daily lives. All oversight provisions for any "bailout" must have enforcement monies attached to them and criminal penalties for all offenders.
6. IF IT'S TOO BIG TO FAIL, THEN THAT MEANS IT'S TOO BIG TO EXIST. Allowing the creation of these mega-mergers and not enforcing the monopoly and anti-trust laws has allowed a number of financial institutions and corporations to become so large, the very thought of their collapse means an even bigger collapse across the entire economy. No one or two companies should have this kind of power. The so-called "economic Pearl Harbor" can't happen when you have hundreds -- thousands -- of institutions where people have their money. When you have a dozen auto companies, if one goes belly-up, we don't face a national disaster. If you have three separately-owned daily newspapers in your town, then one media company can't call all the shots (I know... What am I thinking?! Who reads a paper anymore? Sure glad all those mergers and buyouts left us with a strong and free press!). Laws must be enacted to prevent companies from being so large and dominant that with one slingshot to the eye, the giant falls and dies. And no institution should be allowed to set up money schemes that no one can understand. If you can't explain it in two sentences, you shouldn't be taking anyone's money.
7. NO EXECUTIVE SHOULD BE PAID MORE THAN 40 TIMES THEIR AVERAGE EMPLOYEE, AND NO EXECUTIVE SHOULD RECEIVE ANY KIND OF "PARACHUTE" OTHER THAN THE VERY GENEROUS SALARY HE OR SHE MADE WHILE WORKING FOR THE COMPANY. In 1980, the average American CEO made 45 times what their employees made. By 2003, they were making 254 times what their workers made. After 8 years of Bush, they now make over 400 times what their average employee makes. How this can happen at publicly held companies is beyond reason. In Britain, the average CEO makes 28 times what their average employee makes. In Japan, it's only 17 times! The last I heard, the CEO of Toyota was living the high life in Tokyo. How does he do it on so little money? Seriously, this is an outrage. We have created the mess we're in by letting the people at the top become bloated beyond belief with millions of dollars. This has to stop. Not only should no executive who receives help out of this mess profit from it, but any executive who was in charge of running his company into the ground should be fired before the company receives any help.
8. STRENGTHEN THE FDIC AND MAKE IT A MODEL FOR PROTECTING NOT ONLY PEOPLE'S SAVINGS, BUT ALSO THEIR PENSIONS AND THEIR HOMES. Obama was correct yesterday to propose expanding FDIC protection of people's savings in their banks to $250,000. But this same sort of government insurance must be given to our nation's pension funds. People should never have to worry about whether or not the money they've put away for their old age will be there. This will mean strict government oversight of companies who manage their employees' funds -- or perhaps it means that the companies will have to turn over those funds and their management to the government. People's private retirement funds must also be protected, but perhaps it's time to consider not having one's retirement invested in the casino known as the stock market. Our government should have a solemn duty to guarantee that no one who grows old in this country has to worry about ending up destitute.
9. EVERYBODY NEEDS TO TAKE A DEEP BREATH, CALM DOWN, AND NOT LET FEAR RULE THE DAY. Turn off the TV! We are not in the Second Great Depression. The sky is not falling. Pundits and politicians are lying to us so fast and furious it's hard not to be affected by all the fear mongering. Even I, yesterday, wrote to you and repeated what I heard on the news, that the Dow had the biggest one day drop in its history. Well, that's true in terms of points, but its 7% drop came nowhere close to Black Monday in 1987 when the stock market in one day lost 23% of its value. In the '80s, 3,000 banks closed, but America didn't go out of business. These institutions have always had their ups and downs and eventually it works out. It has to, because the rich do not like their wealth being disrupted! They have a vested interest in calming things down and getting back into the Jacuzzi.
As crazy as things are right now, tens of thousands of people got a car loan this week. Thousands went to the bank and got a mortgage to buy a home. Students just back to college found banks more than happy to put them into hock for the next 15 years with a student loan. Life has gone on. Not a single person has lost any of their money if it's in a bank or a treasury note or a CD. And the most amazing thing is that the American public hasn't bought the scare campaign. The citizens didn't blink, and instead told Congress to take that bailout and shove it. THAT was impressive. Why didn't the population succumb to the fright-filled warnings from their president and his cronies? Well, you can only say 'Saddam has da bomb' so many times before the people realize you're a lying sack of shite. After eight long years, the nation is worn out and simply can't take it any longer.
10. CREATE A NATIONAL BANK, A "PEOPLE'S BANK." If we really are itching to print up a trillion dollars, instead of giving it to a few rich people, why don't we give it to ourselves? Now that we own Freddie and Fannie, why not set up a people's bank? One that can provide low-interest loans for all sorts of people who want to own a home, start a small business, go to school, come up with the cure for cancer or create the next great invention. And now that we own AIG, the country's largest insurance company, let's take the next step and provide health insurance for everyone. Medicare for all. It will save us so much money in the long run. And we won't be 12th on the life expectancy list. We'll be able to have a longer life, enjoying our government-protected pension, and living to see the day when the corporate criminals who caused so much misery are let out of prison so that we can help reacclimate them to civilian life -- a life with one nice home and a gas-free car that was invented with help from the People's Bank.
Yours,
Michael Moore
MMFlint@aol.com
MichaelMoore.com
P.S. Call your Senators now. Here's a backup link in case we crash that site again. They are going to attempt their own version of the Looting of America tonight. And let your reps know if you agree with my 10-point plan.
Les Leopold: The Forbes 400 Shows Why Our Nation Is Falling Apart
Collectively, the Forbes 400 have $1.57 trillion in wealth. It's hard to get your mind around a number like that. So let's imagine that it was available for the public good. What does $1.57 trillion buy?
Loading comments…
Want to reply to a comment? Hint: Click "Reply" at the bottom of the comment; after being approved your comment will appear directly underneath the comment you replied to
It's too bad they didn't hear you, Mike
M.Moore:"T
_______________
Good Question,indeed!
I would think that rich People could afford to Bail Themselves & everyone else out, since they would get most of that Money back, right? Most rich People Own things--Companies & Businesses that other People will more then like spend & re-invest their money on & in!
I know that I only have A G.E.D, however I believe that I'm right about how the circulation of Currency works (or should work) in all of Our Society, am I wrong about this assessment?
like michael moore's solutions. he's more down to earth and KNOWLEDGEABLE than most politicians. i just got through listening to his "election guide" on cd and loved it. it's a fair perspective and very insightful. warning: you'll get angry when you hear/read what is actually going on in america and how easily it could be fixed.
Why is no one pointing out that this bill could not get past the republicans unitl they loaded it up with pork. NOW they are for it? It is the same bill, juts lots of deficit spending pork for the Republicans and that is enough for them to jump on board? Where is the problem in spending again?
I don't agree with passing this bill myself, but no matter how you feel about the bill it should sicken eveyone that in this time of sky id falling gloom and doom, the republican party still put PORK over politics. The same goes for any of those that claim to have changed their vote because Pelosy hurt their feelings. That is just as bad as the pundits who got on the press for "liberal bias" reporting on this. It was not the press that made it up, it was what the republican leader said himself.
Michael Moore for President.
Very well said MIKE!!!!
It is long past time that this COUNTRY be FIRST for WE THE PEOPLE not the top 400 people!!!!
Our politicians must learn that coddling the corporations & the rich instead of TRULY representing WE THE PEOPLE will cost them their jobs!!!!
America Wake Up - Hold "our" politicians who "WORK FOR US" accountable!!!!
FEW NOTES: Obama did very nicely during the Bush years, he is biting the hand that fed him. Also I think that the top 5 political recipients of money from Fannie Mae and Freddie Mac should go to jail and not be allowed to run for government office again!
That's sad to hear you say that, because ole Johnny McKeating5 & 130+ of his campaign advisors & staff would be the first into the pokey!!!! Talk about "biting the hands that fed [you]"!!!!!! Also, be careful of hypocricy & karma: THEY tend to have a pretty hard "bite" on their return trip as well!
You are talking about a man with one car and one house -- and equating him to a man who dumped his wife to marry money, and now owns nearly twenty houses and cars combined.
But you're making a great case for publicly financed elections.
Fannie Mae and Freddie Mac donations to a campaign did nothing to cause this problem. Absolutley nothing. Completley and totaly unrelated. The right feeds you these stories to appeal to your hatred for Americans that continue to exposing thier endless list of failures. I encourage you to read and watch something other than Fox news and THEN decide for yourself. To many of you live in a bubble where they tell you these nonsense stories and repeat them over and over without questioning or reasoning at all.
You are smart enough to work a computer, then you are smart enough to see past this BS. You have to be willing and wanting to face the truth. The people you are trusting now are partisen hacks that are lying to you.
Copy-and-paste is a career path?
Great article, Michael. You've wowed & impressed me again with your honest, thoughtful COMMON SENSE suggestions for solution. It sure beats the heck out of Congress & the White House insulting our intelligence on a daily basis with their lobbyist-biases and ALL of their lies. Can't wait till you release THIS movie: The Thorough Pillaging of America by the Ultra-Wealthy "Slum (Land) lords".
Michael Moore, you ROCK my WORLD!!!
Michael, nice work. Keep giving us hope for a country for the people and not just for the King and his court.
Obama prospered very nicely during the Bush years. I think everyone that received at least as much as Obama pays the brunt of the cost. Also I think the top 5 recipients of money from Fannie Mae and Freddie Mac should go to jail and not be allowed to run for public office. I am a vet, have worked all of my life. I feel entitled to get a nice big house for a very low monthly payment! Then if I still can't make the payment, someone can bail me out. Okay? I think thats sounds fair. But, what do we do if the elite only want to be self-employed and don't want to hire anyone else? Where will everyone work? How about a peoples Union where we can get paid for doing nothing! That sounds good too.
"But, what do we do if the elite only want to be self-employed and don't want to hire anyone else?"
That's a laugh. You can't produce anything without labor.
I am a vet (Iraq 2004) as well and that is why I have my current views. When I was deployed a girl at the gym that signed out towels and worked for KBR was making $80,000 a year. This country handed Haliburton a nice fat check and guess who will probably be getting re-hired next year? That is right, our current VP. Also, I am from Youngstown, OH originally and if you want to see a city completely raped by de-industr
The putocrats are in charge.
Great post, Michael. The first part about 400 people owning half the wealth in this country is truly shocking. Bushco. has turned this country into a banana republic!
Your plan is great!
Go Michael!
PART TWO
As to 3, why is bailing out homeowners more fair than bailing out investors? Aren't the people who bought a home they couldn't afford just as greedy and foolish as the bankers who gave them the loan? What about the investor who bought into a good company and because of a lack of transparency was caught off guard and screwed out of his investment? Shouldn't we make good his loss too?
"Wall Street" is not the enemy. It's a marketplace. Individual companies and individual CEOs are to blame as well as greedy Americans who bought more home than they could afford. To blame the market itself is like blaming the candy store because your son ate too much candy and got a stomach ache.
The 250-word limit is there for good reason. There didn't used to be one. Personally, I'm glad there now is.
"Wall Street" is not a marketplace; it's a carnival. And the games are rigged.
The law usually cracks down harder on pimps than johns. As it should here.
the problem I have with that is that it was greed all around...I can speak from a personal point of view, that my wife and I did not buy a house at inflated costs, and ridiculous loan arrangements because that would have been stupid. As a result, when those people who acted irresponsibly, will receive a bailout, they are getting free money for being dumb, while the rest of us who couldn't afford a house, still can't...ho
.You ask why is bailing out homeowners more fair than bailing out investors?
Well, if you to consider homelessness a viable baseline it's not. However some actually consider society more stable when families have food and shelter, not to mention their participation in society is greater when they have a stake in it.
The person at the bottom of the ladder who became progressively poor during the bush years tried to improve his lot by purchasing a home that he hoped would increase in value. He and his family lived in that home and were obligated to pay the loan no matter what happened to the value of that house.No doubt some were foolish and a few were greedy but most believed the line of crap being fed them by the truly guilty. You know the truly guilty, they were the ones who originated these loans and earned their fees up front before hocking the loans to some other poor jerks. They did not remain obligated, they purposely and with premeditation planned their rape and robbery.
GIVE IT A REST
Huzzah.
Also note that for the younger (working) set, real wages have stayed flat throughout the Bush misadministration. And savings rates dipped negative.
We've BEEN burning the furniture to keep the house warm. Furniture now gone; credit cards to buy more, maxed.
Now the house is starting to burn -- as is the firehouse -- but we sure so feel warm today.
Rome? Fiddle?
While I was a single mother, I participated in a Community Reinvestment Program to teach us Po folks how to be homeowners. I had a nice state job as a social worker making 23Kper year. No child support was coming in but somehow, we were making it. I was approved for a 75K loan on a house I wanted built near my parents. The lot was at 16 feet elevation on MS Gulf Coast. Several mortgage companies congratulated me. Oh, it's not in a flood plain, you will not have to keep flood insurance. In fact, you can not get it there because the Govt will not write it. Soooo, the more I thought, the more I realized that it was too big a gamble. I had thoughts of being without a job and how would I pay that minimal $550 a month? Soooo i continued to rent, drive old cars and eat out rarely. A few years later, Katrina.
They were encouraging me to be at the maximum for debt, they encouraged me to build in an area that was suspect for flood damage, they ignored that I really had nothing to fall back on since I was like every other divorced mom who will never recover from a divorce unless she remarries.
I've given up trying to whittle this down any more. HP needs to allow more words in comments. In the meantime, here's a two parter.
Some of your suggestions have merit. But, I disagree strongly with 2b, 2c and 3.
Not everyone who invests in the stock market is rich. This crisis has been described as an economic 9/11 and it seems many people are acting just as hysterically as then. I expect everyone associated with Wall Street to be hauled off to Guantanamo Bay any day now.
More than half of all Americans have a retirement plan and guess where those retirement plans invest that money? The problem is that too many people don't take an active interest in their investments so they don't think of themselves as investors.
The reason so many wealthy people invest in stocks is because it is the best way to increase wealth over time. Instead of discouraging people from investing by adding taxes and other disincentives, we should educate children early about how to manage investments. Nothing would give Americans a better shot at real wealth and hope for a brighter future.
Furthermore, many retired people live off dividend checks. 2c will harm more people than it helps. Taking money out of people's hands is not a way to help the economy either.
CONTINUED
There are couple of things you should reconsider logically. First, while it s true that many invest have done nothing wrong, it is equally true that many who have bought houses through sub-prime loans and are now in crisis have done nothing wrong; it seems to me that, since there are strong indications that investors will be covered to some degree--and mortgage holders not at all--the bottom line of your argument is "screw the mortgage holders."
And as far as a 0.25% [one quarter of a percent] would have a significant impact on only the largest of investment transactions [a $1 million transaction would generate a $2500 tax].
Thirdly, there is a fundamental difference between mortgage holders in crisis and those who invest in the stock market: investing in stocks is a decision to GAMBLE with your capital in order to potentially make more on your investment--I have never met a home owner who considered purchasing their home as being anything even near the equivalent of playing the stock market.
You need to step outside of the systemic indoctrination of Friedmanite free market capitalism and look at what is at stake more objectively.
Huzzah. Love the moniker -- and the profile -- btw. You've got fan.
Lots of people around here stare into teacups and think the reflection is a genius.
Well thought out.
If I may...
"Investing" ought not be "speculati
Why shouldn't the beneficiaries of the bailout be the ones to pay for it? Keep 2c.
Whether an investor or speculator is rich or poor, the rules should encourage good behavior. Right now they do not.
People DO understand they're in the market with their pensions, 501's, etc. The PROBLEM is they listen to financial charlatans for "perfessional" (sic) advice. Those folks tend NOT to recommend passive index funds. (Read up on Dan Solin, who also has a blue background
That the wealthy invest in stock is no reason the rules should favor the rich.
Re retirees and 2c, easy: make it means-tested at tax time. You make more than $100k? Donate. Less? Keep the dividend in full.
Last, how do I get a nice blue background?
I agree with the fact that many people have money in the markets so maybe the problem is that we expect our holdings to earn us 9% when the interest rate is only 5%. All of that Made money had to come from someplace. Someone has to pay the piper.
I work for a Fortune 500 company and we have been trimming the fat for the last 5+ years so we can stay profitable enough for the stockholders. This has included employee reductions, stagnant raises, increased workloads, outsourcing of call centers, date entry and IT, and last but not least the closing of almost all US manufacturing and moving it overseas. But the stock has preformed well. Well enough that our CEO makes a few million a year and has gotten long term ‘Incentive Bonuses’ in excess of $20 million.
Perhaps we need a hybrid plan that asked the Ultra Rich to contribute half of the amount. You know when it comes to taxes I will venture that most of us are resigned to paying our fair share and would not even mind if it was used wisely. But the Ultra Rich seem to think of taxes as something that poor people pay. They reap the benefits of our System and then skip out on paying the bill.
Higher risk SHOULD come with higher return. And without a banker bailout.
Your plan is great, but I have a question about #3. As one of the people who didn't take out any mortgages, own any stock, or even have a bank account, I wonder why only mortgage holders should get $100,000.
I've heard a suggestion: Everyone gets, say, $50,000. If you hold a mortgage, it will be applied directly to your mortgage. If you haven't contributed to the mess, it will be a "stimulus check." I like this better than what you've proposed.
Everyone gets, say, $50,000. If you hold a mortgage, it will be applied directly to your mortgage. If you haven't contributed to the mess, it will be a "stimulus check." I like this better than what you've proposed.
yep....the
How about a bit of responsibility across the board? Main street was just as greedy at wall street, only wall street stuffed more $$$ in it's pockets... My wife and I decided not to take out a huge loan, as a result of my deciding against taking on debt, I should loose out on a 100k or 50k payout? That is ridiculous
that number about the top 400 financially, controlling most of the wealth needs to be repeated again and again...an
Go Michael, get yourself back on CNN...make some waves...
You must be logged in to comment. Log in or connect with
