Americans need to understand that many of our problems are systematic and even Obama cannot fix them all from within our current political structure. We need to start asking ourselves what fundamental changes need to be made to the American political and economic systems in order to: close the income gap between the upper and lower classes; overhaul our social safety net while still rewarding hard work and innovation; weed out corporate corruption and financial systematic abuses with honest oversight and create a political system for the people, rather than corporations and lobbyists.
The American economic empire has been in decline for some time -- since the post World War II economic boom. The economic problems we are facing today have been predicted and well-documented for years and accelerated by the Bush administration's deregulation policies (laissez fair capitalism run amok), illegal wars, cronyism and unbalanced taxation policies.
Just like with the Great Depression, history will view this financial crisis as a watershed event and a time of great change. Greed and corruption within the American Capitalist model -- which is usually hidden behind a convoluted and unfair legal system, backroom politicking and shady corporate bookkeeping -- has been laid bare for all the "regular folk" to see. Everyone can easily understand what it means when the government gives 750 billion of their tax dollars to the banks with no oversight or when Wall Street's various ponzi schemes come crashing down.
Now is the time to strike while the iron is hot! America's anger and ingenious will is stoked and a new, more open administration is coming to power looking for innovative, far-reaching ideas. America has the opportunity to institute real, systematic changes and emerge from this crisis with a stronger, more egalitarian system.
Here are a few ideas to get us started:
-- Directly regulate mortgage rates to be closer to bank borrowing rates. So, for now, lower the mortgage rate for new buyers and people refinancing to 4% -- this will put money in the pockets of middle-class home owners rather than banks.
-- Nationalize banks and insurance companies.
-- Remove corporations' "individual" legal classification which allows them to enjoy the rights and privileges of individual humans, and instead make corporations and those running them more accountable to society.
-- Reduce oil dependency with innovative new energy sources.
-- Higher taxes for corporations and the rich with fewer loopholes such as the low capital gains tax. At the same time, cut taxes for the middle class and small businesses.
-- Tougher consumer regulations on the financial/investing industries.
-- Reduce the influence of lobbyists and institute public financing for all political campaigns.
-- More tax incentives for start-ups and innovative companies.
-- Invest in American infrastructure: education, universal health care, alternative energy, sciences, the arts, transportation, etc.
-- Remove the tax exempt status of religious organizations.
-- Break up the media monopolies.
Please comment below and tell us about how you think America can emerge from this difficult time with a stronger, stabler and more equitable economic system. Everyone has a chance to affect real change and contribute to the ideological discourse in 2009, so let's continue escalating the process!
All that you listed have been on my wish list for a long time.
Increasing taxes on corporations would make them even less competitive than they are already. Many Democrats as well as Republicans favor reducing the corporate tax. Second, increasing taxes on the "rich" - by that I suppose you mean highest tax bracket- also means you increase taxes on a large number of small businesses (owners report small business tax on personal income tax); so the comment is contradictory. Regarding taxes on the middle class all depends on what the author believes middle class is. That's because about 50% of all Americans working age pay no federal income tax whatsoever; plus, many that do pay federal income taxes pay very low rates because their mortgage interest is deducted, as well as small business losses and dependents.
If you look at percentage of income used to pay taxes, US taxes are low, but Repubs don't like mentioning that when they are lambasting US tax rates as a competitive disadvantage.
Of course, I have never understood how an income tax is a competitive disadvantage, either you make a profit and are taxed on it, or you don't, there is no way for an income tax to keep you from making a profit.
50% top rates. Our economy thrived from WWII to the 60's with 93% tax rates, which I would rather not pay.
Corporate taxes are ineffective, and simply passed on to customers.
It has been in decline for some time, what...? Many said we were in decline in the 1970s but we bounced back stronger than ever in the 1980s and 1990s. The US probably reached the pinnacle of relative power in 1999-2000, but we're not nearly as far off that peak as many seem to believe. The problems we're having have nothing to do with deregulation per say. The biggest deregulatory moves were accomplished in the 1970s under President Carter, well before George W was President. The financial deregulation that most refer to was done in 1998, under President Clinton, plus it was the Republicans which wanted to increase regulation on Fannie Mae on Freddie Mac, which the Democrats squashed. The war in Iraq has certainly damaged the country, but cronyism has been around since the country was founded and is not some new phenomena, plus the current taxation policies may seem unfair, but they certainly haven't damaged the country - considering the vast economic growth since the top rate was reduced from 71% in 1981, the country has actually benefitted from lower rates.
And the man who said that government is not the solution, but part of the problem was...?
I'm sure it was Carter, too.
And the fact that pinnacle of relative power occurs in 1999-2000 only means that Joe Liebermann should have been running next to McCain in 2000. Funny twists of history!
And those taxes. Oh My! After the Madoff story, it could be fun to calculate the contribution of tax-shuffling when it comes to funds of funds-performance.
'the current taxation policies may seem unfair, but they certainly haven't damaged the country'
You're such a benefactor to the common good, aren't you!
We must end the Federal Reserve and return to sound money and only Congress to issue it. Otherwise, your tenets are meaningless, albeit an altruistic approach.
your last suggestion scares the sh*t out of me. the gubment is already using eminent domain abusively, often for backdoor private benefit.
most of your suggestions scream control, CONTROL CONTROL!. Government intervention is what got us here.
I like 3, 4, 8, and 10. But none of these should be done by force, but by incentive. As far as "control", lets start with prosecuting for anti-trust and fraud to address some of the abuses you have in concern.
Germany after World War One tried printing money to cover its debts. The result was rampant inflation. Have we learned nothing from history?
The US has been in economic decline since the boom after WWII? What happened just prior to that? We went off the Gold Standard. Since that change we have had no real asset to base our monetary system.
Eliminate the current income tax system altogether. Replace it with a simple 6% tax on gross income with no deductions. This eliminates loop holes for those that are abusing the current tax code. The middle class would pay less over all, but actual tax revenue would increase. AND, it would be fair.
Lower interest rates are fine for those that are living on credit. Am I wrong, that part of the current economic problem is too much easy to get credit? People buying houses they can not afford, credit card debt, etc?
And what about those of us that are responsible and try to save. Those same lower interest rates affect what banks pay for savings accounts. What happened to the 5% passbook savings account? Now my savings pays less than three quarters of a percent. Why would anyone want to save under the current system?
The current interest rates are merely perpetuating the false economy that caused the economic crisis. Has no one noticed that during the past 8 years every time Wall Street took a down turn the fed lowered interest rates? The market would rebound and drop again, and the fed would again lower its rates. Now where are we? The fed is not making any money ( 0 -.5% interest) on the money it loans. Who pays for this? The tax payer.
First you suggest the government regulate bank loans. Then you suggest the government administer the banks altogether. Which is it? You can't just say nationalize the financial system. You'd have to write a much longer piece on just exactly how the financial system should operate under state ownership. If you remove the profit motive from banking, the only remaining motive is power. Do you want Hank Paulson to head a national banking monopoly that decides who gets access to credit? Thought so...
It would be lovely if we had a decentralized participatory democracy with engaged citizens and organized communities that could direct the operations of a federalized hierarchy of public banks. But I think we all can admit that the social consciousness of America and much of world hasn't yet been able to overcome the barriers to equitable pluralism through sovereign self-government. There are prisons constructed for our minds, and until enough of us break free, democracy will necessarily remain subordinate to realpolitik in national and international affairs.
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And now it's time to forget about it.
What we have to realize is that we're never going to develop a progressive economy -- that isn't massively corrupt at least -- through politics. We'll have to think of economic democracy as a collective financial management scheme that can be implemented by not-for-profit depositor-owned banking institutions: credit unions.
I think it's time for progressives to give up on the federal government as an instrument of social welfare and security. The aspects of government that amount to pushing money around can be operated by private organizations so long as the users are also the controlling owners. They compete to pool wealth and provide investment, credit, insurance, and career services to develop and protect the financial security of their members.
As Mike suggests--we need to think big. However there is one difficulty. Our profit based system does not function based on a social contract for all.. Irreconcilable differences between owners and workers will persist.
Reduce oil dependency with innovative new energy sources, THIS IS AN ISRAEL and WAR MONGER foreign policy to keep cash out of the hands of the Muslims ONLY. Free world trade for cheaper prices is good economics.
Reduce the influence of lobbyists and institute public financing for all political campaigns, Yes, but don’t forget “Think Tanks” and other private groups stealing the influence of the “common folk”
Invest in American infrastructure: education, universal health care, alternative energy, sciences, the arts, transportation, etc, Yes, but alternative should be cheap and free, education for real jobs first