Puget Sound Liberals Weekly Newsletter #144

Enhancing Freedom, Opportunity and Cooperation in Puget Sound and Beyond

Through informing and networking Liberals and Liberal Organizations.

 

Our vision is hundreds of thousands of well-informed Puget Sound Liberals working together.

 

   2500 members                                                               October 17, 2008                                                                                                                        

 

 

 

 

                                                     

Our Website                                   Our  Editor                  To Unsubscribe

 

                        Table of Contents  *Featured Articles

 

About Puget Sound Liberals

Opportunities, Petitions and Feedback

 

Commentaries from Our Members

Jack Gilles on Selling Housing Mortgages

Virginia Paulsen on Homebuyers Share the Blame

Dick Burkhart on a New Global Financial System*

Jack Smith: McCain’s Personal Attacks a Diversion

Dick Burkhart’s Voting Recommendations

 

Liberals and Democrats Links to the Beef

Who Is the Real John McCain?

Barack Obama’s Coattails*

What Will Obama’s Grass Roots Organizers Do?*

How Will the Depleted Republicans React?

 

State and Local  Links to the Beef

29 Reasons to Vote No on Proposition 1

Gates Report: Tax Reform Recommendations

Assisted Suicide?

 

Nation and World  Links to the Beef

Small Is Beautiful*

Two Opposing Responses to Our Financial Crisis*

JOBS!  JOBS!  JOBS!*

Avoid Foreclosures and Produce Affordable Housing*

 

Our Liberal Spirit

Small Is Beautiful

 

Recommended Books

 

 

 

 

Our Political Values

 

Our Political Priorities

 

·       Fair Clean Elections and Open Government

·       Fair Taxes and Competent Spending

·       Investment for Productivity

·       Quality Health, Education, Jobs, Income

·       Environmental Protection and Energy Independence

·       Security and Equal Rights

·       Justice and Peace Everywhere

·       International Cooperation and Leadership

 

Conservatives oppose all of these

 

     Let’s End Our National Nightmare

 

         Let’s Restore Our American Dream

 

More on Conservative opposition to our American Dream

 

Washington State’s 4 Major Needs

Federal Funding for Health and Education

·       A Progressive Income Tax

·       Public Campaign Financing

·       Replacing Republican Legislators

 

Quote of the Week

 

Small Is Beautiful 

E. F. Schumacher (1911-77)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calendar of Events                           

 

King County Democrats - LD Meetings            Some 2008 Legislature Lobby Days

 

Thurston County Progressive Net                  Western Washington Fellowship of Reconciliation

 

Alliance for Democracy                                Democratic Underground.Com                          

 

Sierra Club Cascade Chapter Calendar           Cool State Washington

       

Washington Public Campaigns Calendar          Town Hall Seattle Calendar

 

Washington State Labor Council                    Whatcom County Peace and Justice Calendar 

 

Wallingford Neighbors for Peace and Justice – Friday Night Movies      Liberal films on PBS

Conversation Cafe      Drinking Liberally          Seattle NOW          

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Calendar of Events

Friday, October 17 – 19 at Evergreen College (Olympia) – Peaceworks Conference 2008  For More.

Sunday, October 19 at 1 PM at Kirkland’s Marina Park and Pavilion (25 Lakeshore Plaza, Kirkland) – From Books to Babes: Obama Rally for Change, including several local candidates.  Organized by the Bibliobabes and Eastside Women for Change.  A variety of campaign goodies will be available.

Sunday, October 19 at 7 PM at Highway 99 Blues Club (1414 Alaskan Way, Seattle) – Seattle NOW Blues Benefit: Polly O'Keary & the Rhythm Method, Suze Sims, Teri Ann Wilson, Stacy Jones, the Paula Maya, LJ Porter and Lady A & the Baby Blues Funk Band!. Sponsored by Seattle NOW and the Women's Voter Project. $10

Thursday, October 21 at Noon at 1026 North ForestYWCA’s Second Fall Speaker Luncheon: League of Women Voters Co-Chairs discuss Immigration Reform

Tuesday, October 21 at 5:30 PM at K&L Gates (925 – 4th Avenue, Suite 2900, Seattle) – Reception for Jim McIntire for State Treasurer.   Suggested donation $100.  To RSVP.

Saturday, October 25 at 5-9 PM at Bell harbor International Conference Center (Pier 66, 2211 Alaskan Way, Seattle) – 28th Annual NARAL Pro-Choice Washington Liberty Ball Auction and Masquerade. $125.  For more information.

Western Washington Fellowship of Reconciliation Fundraising Auction.  Snack. Visit and bid.

Monday October 27 at 5:30 (registration and cocktails), 6:30 (dinner) at the Westin (1900 Fifth Avenue, Seattle) – 15th Annual Warren G. Magnuson Awards Dinner & Awards Ceremony with special guest speaker Craig Robinson, Michelle Obama's brother.  Sponsored by Washington State Democrats.  $100.  $75 for someà For more information.

November 12 – 14 – Green Business Bootcamp.  Sponsored by Network for Business Innovation and Sustainability  (NBIS). $500. 

 

Opportunities, Petitions and Feedback

 

Communication with Our Members and Feedback

 

I have compiled all of my commentaries on our economy into one document which is posted on our website.  I believe one hour spent reading them will make you better informed than the vast majority of Americans, including many of our congress members.  Without understanding our economic crises, their causes and needed solutions, you are unable to act responsibly to correct the situation which affects all of us.  Dave Thomas

Take a crash course (2½ hours) about our American economy (video).

 

Opportunities

Useful Websites: contacts, maps, community organizing tools, and more.

Access to jillions of political cartoons.

Download Michael Moore’s latest movie ‘Slacker Uprising’ for free.

Sign up for a free Brave New Films subscription to inform more people about the Real John McCain.

Obtain documentary political films from First Run Features.

Download Sightline Institute’s climate policy primer ‘Cap and Trade 101’.  About Sightline.

Washington CAN offers volunteer and paid canvassing opportunities.  For more information.

 

Petitions and Donations

Tell our presidential candidates to address economic security, health care and social security.

Tell our presidential candidates to support hate crimes legislation.

Tell John McCain to end his campaign of hate.

Tell Washington Department of Health to continue including organic milk options for WIC families.

Download a petition and collect signatures to tell our next president to act to protect Darfur.

 

Commentaries From Our Members

 

 

Jack Gilles on Selling Housing Mortgages

 

Just before we left India, just about this time last year, I got a call from a company to talk about a leadership program.  I had never heard of this company, but when I visited their operations I found it to be a call center working for a Houston based company that had formed within the last year.  This Indian company had 10,000 employees and were on track to recruit another 5000 by May. Here were roomfuls of young Indians calling Americans about housing loans.  All the information came from Lending Tree.  They were selling these people loans for homes with practically no information on them except the information they had sent to Lending Tree inquiring about a loan opportunity.  I couldn't believe it!  That's when I knew we were in deep trouble and this couldn't last.  I presume the company has gone belly up, I can't imagine there is any reason to have a call center doing this work today.  Jack Gilles

 

Virginia Paulsen on Homebuyers Share the Blame

 

While we are all blaming banks, other lending institutions and Wall Street for the current economic collapse, looking deeper is more revealing.  Between 1980 and 2007 homeowners sold their homes at the highest possible price, often making considerable amounts of money beyond any investment in their houses. Home buyers without realizing their economic limitations bought houses, often mega mansions, at grossly inflated prices, leading to the housing bubble.

 

Home buyers did not read their mortgage contracts or seem to be able to do the math about the full costs of a subprime, interest-only or ARM mortgages.  The bottom line is that Americans who sold and bought houses during this time have only themselves to blame for the current economic crisis if they bought beyond their means. Unfortunately, their decisions are having a far wider and deeper negative impact than just themselves.  Virginia Paulsen

 

Dick Burkhart on a New Global Financial System

 

Demand a new Global Financial System.  The economy is global, finance is global, but financial regulation is not global. Nor is there a sound global currency or system of credit. It is time to push hard for a new global financial system.  And to include all countries in the design and governance of this system.

 

To insist that this currency and credit be backed by real wealth – actual human and natural resources or services. And that transactions in this currency be taxed to support this new system. And that credit be directed toward the creation of a sustainable economy for future generations.

 

This, not bailouts, will both "restore confidence" and a sense of reality. Please communicate this to your congressional rep and senators, as I have.  Dick Burkhart

 

Jack Smith: McCain’s Personal Attacks Are a Diversion from Our Economy

Published by Seattle PI on 10/15/2008

 

I am a retiree who has saved all my life to prepare for a rainy day in retirement. John McCain, Sarah Palin and their Republican friends have brought me a downpour. In one month, my rainy day fund has decreased by more than 10 percent. At the loss rate they have created, I will be sleeping under the bridge sometime next year.

 

Barack Obama has been spending a major portion of his campaign explaining how he will deal with the difficult U.S. economy. McCain has decided he cannot win the presidency by focusing on the economy. Instead he and Sarah Palin have spent much of their campaign effort using racist statements, terrorist innuendos and generally continuing the focus on fear that the Bush administration has relied on.  Jack Smith

 

37th LD Democratic PCO Dick Burkhart’s Voting Recommendations

 

I.  Federal Offices
      President:  Barack Obama
       7th Congressional District:  Jim McDermott

II. State Offices
Governor:  Christine Gregoire
Lieutenant Governor: Brad Owen
Secretary of State: Jason Osgood
State Treasurer: Jim McIntire
State
Auditor: Brian Sonntag
Attorney General: John Ladenburg
Lands Commissioner: Peter Goldmark
Sup. Public Instruction: Teresa Bergeson
Insurance Commissioner: Mike Kreidler
37th District Rep 1:
37th District Rep 2: Eric Pettigrew

III. State Supreme Court Judges
Pos # 3: Mary Fairhurst
Pos # 4: Charles Johnson
Pos # 7: Debra Stephens

IV.  Court of Appeals Judges
Pos # 5: Linda Lau
Pos # 6: Ann Schindler

V.  Superior Court Judges
Pos #1: Tim Bradshaw
Pos #22: Holly Hill
Pos #37: Jean Ritschel

VI.  State Initiatives
Initiative 985 (Tim Eyman): No
Initiative 1000 (Death w Dignity): Yes
Initiative 1029 (Long Term Care): Yes

VII.  King County Charter Amendments

Amendment # 1:  No
Amendment # 2:  Yes

Amendment # 3:  Yes
Amendment # 4:  Yes
Amendment # 5:  Yes
Amendment # 6:  Yes
Amendment # 7:  Yes
Amendment # 8:  No

VIII.  Seattle Levies
        Proposition 1 (Parks): Yes
        Proposition 2 (Pike Place Market): Yes

IX.  Sound Transit

Proposition 1 (Expand rail & buses): Yes

 

Liberals and Democrats

 

 

Who Is the Real John McCain?

 

John McCain has been proud of his moral principles, but these seem to be falling by the wayside during his failing campaign for our presidency.  First he said he couldn’t control outside allies who dishonestly attacked Barack Obama.  Then McCain’s campaign began dishonestly attacking Obama, with McCain repeating the lies.  Now McCain is stirring up his audiences to express hate and violence toward McCain.  For more.  For more.  For more.  All this from John McCain who says he puts our Country before his campaign.  Shame. 

 

Republicans are so sure that they are mainstream that they think Barack Obama can only win by cheating.  

 

Barack Obama’s Coattails

 

Democratic presidents Jimmy Carter and Bill Clinton ran campaigns largely independent of our Democratic Party and other Democratic candidates.  They appointed Washington, D.C. outsiders from Georgia and Arkansas respectively to their administrations.  They were unable to obtain support for their proposals.

 

Barack Obama has integrated his campaign with our Democratic party and with the campaigns of Democratic congressional and state candidates.  As Barack Obama’s popularity increases in both Blue and Red states, our increasing number of voters for him will often also vote for Democratic congress members and state executives and legislators.  As a senator, Obama has already established excellent relations with Democratic (and some Republican) congress members.  His coattails will produce many grateful new congress members, governors and state legislators.  This will greatly increase his ability to pass and implement his proposals.  He will have less need to compromise his proposals with Democratic and Republican congress members who have been influenced by lobbyists for wealthy and powerful special interests.

 

A major question is “to what extent Obama will use his political capital to quickly restore our American Dream or instead husband his capital for the long run.”  I believe that moving forcefully to quickly restore our American Dream will be a profitable political investment, which will replenish and augment any political capital that he spends.  President Roosevelt’s all out efforts during his first several years led to increased Democratic victories in the 1934 elections.  Barack Obama would be well advised to emulate President Roosevelt’s presidential approach.  Dave Thomas

 

What Will Obama’s Grass Roots Organizers Do?

 

Barack Obama’s campaign has trained and deployed thousands of grass roots organizers.  Throughout most of our states.  To win the election.  What will they do after the election?  Turned on and trained, we can expect many of them to continue grass roots organizing. 

 

Some will continue to focus upon politics, doing grass roots organizing to elect Liberal candidates, to  pass Liberal legislation through initiatives and to influence legislators and other government officials.  Others will organize grass roots groups to press for a variety of Liberal reforms.  In our Puget Sound, some of these grass roots organizers may work with organizations which are already doing grass roots organizing such as Washington CAN and the Sound Alliance.

 

We can expect that these grass roots organizers will continue to be active, forming a vital part of our Democracy.  We can expect that grass roots organizing will continue on a much increased scale.  We can expect that our New Politics will be much more bottom up and less top down.

 

How Will the Depleted Republicans React?

 

 

I anticipate that the Republicans will not only lose the presidential race.  They will lose many House and Senate seats outside the South.  Many of the losing Republican congress members will be the Republicans who are so-called moderates (inconsistent Conservatives).  This will leave the Republicans as a consistently Conservative cult, consisting mostly of southern (and some plains and mountain states) congress members, not respected by voters in the rest of our country.

 

These remaining Republicans will have no clear leader.  John McCain and Sarah Palin will have been soundly defeated.  Mitt Romney, Rudy Giuliani, Michael Huckabee and Fred Thompson all failed in the Republican primaries.  Some of the Republican Congressional leaders may be defeated.  The remaining ones have no national following.  Prominent Republican leaders from the past such as Newt Gingrich, Tom Delay and Bill Frist are identified with past failures.  President George Bush is thoroughly discredited.  The Republican convention revealed their lack of potential leaders compared to the Democrats.  The competition for Republican leadership may be fierce.

 

Some hopeful leaders will argue that Republicans should stick with President Bush’s New Conservative practices.  Others will decry the corruption and cronyism of President Bush’s administration and argue for returning to traditional Republican principles of less government and less spending.  Still others will argue for becoming more compassionate and environmental.  For becoming Liberal Lite to compete with our Democrats.  It is unlikely that Republicans will reach agreement on any of these approaches.

 

The Republicans will become more irrelevant and more outspokenly angry as the Democrats offer to work with them, but pay little attention to their ideas which are so opposed to our American mainstream.  The attention of our voters will shift to arguments among Democrats upon how far and fast they should go in Reclaiming our American Dream.  Funding jobs at the expense of balancing our federal budget.  Universal health coverage and care now or only after adopting a compromised alternative.  Taking on the lobbyists for the wealthy and powerful special interests.  We will see and be involved in Democratic struggles with Republicans screaming from the sidelines.  Dave Thomas

 

Here’s the Beef

Change has already occurred: the grass roots organizing of America.

Obama family at our Democratic Convention (Great Video)

Large commercial media downplay Barack Obama’s lead.

Lousy economy trumps race as a voting criteria.

Republicans don’t attack Barack Obama for being black.  They attack him for being foreign.

Afraid of newly registered Liberal voters, conservatives are attacking ACORN which is registering them.

ACORN responds.  For more.

John McCain’s Pinocchio politics.

Barack Obama supports fair pay for women.  John McCain opposes it.

John McCain has a miserable record of not supporting our troops and veterans.

Barack Obama’s and John McCain’s proposals would affect our states differently.

Conservatives seeking to decrease Liberal voting are lying about voter fraud.  For more.

Democratic and Republican controlled debates leave many important issues unaddressed.  For more.

 

State and Local

 

Endorsements for General Election Candidates

 

29 Reasons to Vote No on Proposition 1

 

Proposition 1 is seriously flawed, just as it was last year, when the voters soundly rejected it. Its passage would result in a major setback for the future of our region, including for its transportation. 

Eastside Rail Now! , which is strongly in favor of increased rail transit, has compiled an extensive list of reasons to vote "No" on November 4.

 

Eastside Rail Now: Background Information:

Eastside Rail Now! differs from other (ERN) organizations that are opposed to Proposition 1 (a) in that it is a genuine grassroots movement, (b) because it is truly in favor of rail transit, including new construction throughout the region, and (c) because it is strongly opposed to additional freeway expansion.

 

ERN was launched by about a dozen Bellevue residents in early 2007 for the purpose of stopping King County executive Ron Sims' plan to scrap the Eastside railroad and replace it by a bicycle trail at considerable expense to the taxpayers. Such plan would have set back environmental and transportation progress on the Eastside by decades.

 

This strategically located, 42 mile rail line runs from Renton to Snohomish and passes through or near most major destinations on the Eastside. It is currently being purchased by the Port of Seattle from Burlington Northern, with the deal expected to close by the end of this year.

 

Sound Transit’s description of their East Link project which Proposition 1 will fund.

Aubrey Davis and James R. Ellis support Proposition 1

 

Gate’s Committee Report: Washington Tax Reform Recommendations

To view complete report

 

In developing replacement and incremental alternatives, the Committee focused on the following problem areas: regressivity, adequacy, volatility, neutrality, economic vitality, and simplicity.  This section provides a summary of the recommendations the Committee includes in its final report. Although the report contains many other alternatives deemed worthy of discussion and consideration, the Committee believes that the following alternatives deserve special attention. It should be noted that the Committee proposes alternatives and recommendations with an eye to revenue neutrality, consistent with the charge it received from the Legislature.

 

Incremental Alternatives

The following incremental changes are recommended for adoption except where inconsistent with replacement recommendations. The Committee realizes that some of these alternatives will increase revenue and others will decrease revenue. To maintain revenue neutrality, it would be necessary to either generate additional revenue from another source to offset the effects of those alternatives that reduce revenues or reduce revenue from another source to offset the effects of those alternatives that increase revenues. The Committee recommends the following incremental alternatives.

 

1. Address adequacy.

Extend the sales tax to consumer services.

To broaden the sales tax base, this alternative recommends including certain personal services such as beauty and barber services. The Committee developed this alternative in response to research showing significant erosion of the tax base due to a shift in consumption from tangible personal property to services.

Extend the 0.5 percent excise tax currently applied to watercraft to motor homes and travel trailers as well. Consider increasing the rate from 0.5 percent to 1 percent on all three types of property.

Research shows that motor homes, travel trailers, and boats are another source of leakage from the tax base. Many are used as substitutes for vacation homes, which are subject to the property tax. This alternative would expand the Washington tax base.

Review tax exemptions every ten years to make sure economic and social goals are achieved.

This alternative is in response to concerns that the state economy and business practices are changing so rapidly that exemptions may outlive their usefulness. This alternative helps ensure fair application of tax incentive programs by requiring a periodic review of whether the programs are meeting established policy goals.

Avoid dedicated taxes.

The Committee recommends avoiding dedicated taxes that bear no clear relationship

between taxpayers and those who receive benefits. Research indicates these taxes are costly for businesses to comply with and government to administer.

 

2. Address volatility of the current tax system and also the volatility in any replacement tax system that may be enacted.

Create a constitutionally mandated “rainy day fund.”

This alternative supports creation of a rainy day fund to address the volatility of the

existing tax system and the volatility in any replacement system that may be enacted.  Research demonstrates that constant rate, constant base tax revenues grow faster than the economy in good economic times and contract more than the economy in poor economic times. The proposal is to create a constitutionally mandated rainy day fund with automatic triggers for saving and spending the reserve funds.

 

3. Simplify tax administration.

Streamline the sales tax.

The Committee supports the efforts of the Streamlined Sales Tax Project to enact uniform sales tax definitions and other measures of tax simplification. These efforts will facilitate the possibility of subjecting remote sales (such as e-commerce) to state tax requirements. The ability to tax remote sales would also help stem erosion of the retail sales tax base. This would also help the competitive position of Washington retailers.

Simplify local B&O taxes.

The Committee also supports the ongoing efforts of local governments, business

representatives, and legislators to develop a simplified municipal B&O tax structure that satisfies the goals and concerns of its stakeholders.

 

4. Improve economic vitality.

A number of alternatives mentioned earlier address economic vitality. The flat rate

personal income tax shifts the relative tax burden from businesses to households. The streamlined sales tax project also diminishes the sales tax collection burden on

Washington retailers.

Increase the small business B&O tax credit from $35 to $70 a month and index the credit to adjust with inflation.

Research reveals that new businesses pay a relatively high tax burden. Increasing the B&O credit decreases the state tax burden on small new businesses.

Exempt construction labor from sales tax.

This alternative addresses economic vitality and harmony with other states. Washington State is one of the few states that imposes sales tax on construction labor. Exempting the labor portion of construction would make our treatment of these costs consistent with other states, including Oregon. Implementing this significant exemption would require a corresponding increase in another tax in order to maintain revenue neutrality.

 

5. Address regressivity.

Continue to impose an estate tax in the amounts of the state credit allowed under prior federal law.

This alternative addresses regressivity by maintaining a current tax on high net worth households. Washington State did not conform its estate tax system to the changes made in 2001 to the federal estate and generation skipping transfer tax programs. This proposal would continue to impose Washington's existing estate tax in the amounts of the state credit allowed under federal law prior to the reductions and eventual repeal authorized in the federal Economic Growth and Tax Reform and Reconciliation Act.

 

See all of our Washington Tax Reform Commentaries in one document.

 

Assisted Suicide?

 

Assisted suicide is seldom necessary.  All that’s needed is a medium kitchen size plastic bag and a string, large enough so the oxygen is slowly depleted.  A sedative or several martinis helps to keep relaxed.  For more.  To protect others, a signed note of intent should be left.

 

 

Here’s the Beef

See who’s filing to run for Washington state and federal offices.

I like all the things about Ron Sims that David Brewster dislikes.  

Dino Rossi’s environmental record is poor.  Governor Christine Gregoire’s record is excellent.

Democratic 40th LD Representative Jeff Morris campaigns to upgrade state education funding formulas.

Due to global warming, trees may replace mountain meadows at Mount Rainier and other mountains.

Bill Grinstein and Gary Lock defend Superintendent of Instruction Terry Bergeson’s achievements.

Former Supreme Court Justices Utter and Ireland charge Dino Rossi violated campaign finance laws.

 

Nation and World  

 

Small Is Beautiful

 

We must return from our present Borrow and Consume (and Speculate) Economy to our former Earn and Invest economy. This is the most important thing to understand about what went wrong to create our present economic mess.  And to understand the solutions which we must implement.  The transition will be painful.  But a slow transition will only prolong the pain.  As we have seen with Japan’s experience since 1989.

 

Fareed Zakaria’s Newsweek October 20, 2008 cover story agrees more with the thoughts expressed here more than any other I have found.  Thomas Friedman comments similarly.  For more.

 

Through requiring larger down payments, margin requirements to reduce leveraging, regulation to reduce fraud and enforcement of these regulations, we must reduce speculation and related borrowing.  For more.  Through tax and interest rate policy, we must reduce excessive consumption.  Interest on loans should no longer be tax deductible.  This will not always be popular, given the extent to which we have become addicted to borrowing, speculating and consuming.  For more.

 

In spite of Conservative opposition, we must make public investments by national, state and local governments.  We must also stimulate private investments to create jobs.  We must increase earnings from jobs to reward workers with their fair share of productivity.  Through encouraging unionization; increasing and indexing our definition of poverty, our minimum wage and our earned income tax credit; and other means.  Creating jobs and increasing earnings will be politically popular.

 

Imagine that your earnings are 20-30% higher.  Imagine that you save 10% or more.  Imagine that your return on low risk investments is only several percent above inflation.  Imagine that your income comes more from your earnings and less from speculative investments.  But by saving more, paying larger down payments for purchasing a house or car and investing more in low risk investments with lower earnings, your purchases and investments are more secure.

 

As we began to binge on consumption, Small is Beautiful and other books were published which questioned our vision of our economy.  Instead of orienting to producing more stuff, they argued that our economy should be directed to making our lives more wholesome.  Realizing our values of knowledge, acceptance and control, beauty, intimacy, responsibility.  Producing stuff and services should be means toward these ends.

 

I invite you to read this pleasant little book, imagine your ideal life and ask how our economy could serve your ideal life.  I predict that you may believe that having more leisure time to pursue your interests individually and collectively is more important than maximizing your income to purchase more stuff.  You may believe that public infrastructure and safety nets are be important to enabling your ideal life.  I would appreciate receiving your comments for publication.  Dave Thomas

 

Two Opposing Approaches to Our Economic Crisis

 

 

The ‘Bail Out’ approach is to assist the large financial companies who got us into this mess.  This supposes that these large companies are indispensable for providing the credit that our economy needs for legitimate borrowing needs.  Our government would buy their mystery securities or otherwise provide them money.  With the aim of strengthening them, we might or might not buy these securities cheaply.  We might or might not arrange to recover our money if the mystery securities don’t appreciate in value.  Perhaps by taking preferred shares in the companies we bail out. 

 

The ‘Bail Out’ approach rewards the companies which got us into this mess.  It may involve our government in becoming part owners of these companies, at least temporarily.  This is the approach that England and other countries are taking.  Temporary government ownership may produce quick reform and even allow our government to make a profit.  Necessary regulations with enforcement can be put in place before selling them back to private ownership.

 

Both Liberals and Conservatives should oppose long term government ownership.  It is one thing for our government to regulate markets to keep them fairly oriented to serving our public.  It is another thing for our government to manage companies.  A task for which they are generally unsuited.  Private management of these companies has been abysmal, primarily due to the infectious greed that occurs in non-regulated markets.  But regulation can produce well managed private companies.  Better managed than they would be by our government.

 

An alternative approach would be to rate financial companies according to the extent to which they avoided speculation in mystery securities.  Then loan money to those who rate highest (often small local and regional commercial banks) and, so that they can provide the capital necessary for qualified businesses and qualified purchasers.  For more.  For more.

 

A financial analyst has told me that such ratings are possible.  And enough non-speculative financial companies can be identified.  Such that some of the larger ones can be left to their deserved failure, while still providing enough credit for legitimate purposes.  An advantage of this approach is that the variety of smaller local financial companies would have less lobbying clout than the large financial companies that successfully influenced deregulation.

 

Of course the influential lobbyists for these speculative firms will support the first ‘bail out’ approach and oppose the second approach.  Note that Treasury Secretary Henry Paulson and former Treasury Secretary Robert Rubin both had careers working with speculative firms.  Hopefully, our Barack Obama administration will appoint a Treasury Secretary with a different career background.

 

Unfortunately, our government has begun spending $125 billion to buy shares of 9 large banks: Goldman Sachs Group Inc, Morgan Stanley, JPMorgan Chase, Bank of America Corp., Citigroup Inc., Wells Fargo & Co., State Street Corp and Bank of New York Mellon.  For more.  For more.  For more.

Now we are bailing out failing financial companies.  Should we bail out our health care system?

 

See Stirling Newberry’s posts on Daily Kos concerning our economic crisis, its causes and solutions.

 

JOBS! JOBS!  JOBS

 

JOBS!  JOBS!  JOBS!  JOBS which pay workers what they earn.  Well paying JOBS.  JOBS which increase our productivity and solve other problems:

·       Maintaining and improving our physical and social infrastructure. 

·       Conserving energy and other resources, which we presently waste.  For more.  For more.

·       Creating alternative energies, which uses sustainable resources and doesn’t produce pollution.  It should not produce greenhouse gases which produce global warming pollution.  For more.

·       Creating and implementing new technologies relevant to our health, education, housing and other needs. 

·       Preserving and improving our social safety net and improving our human resources.  Universal access to quality health care.  Universal access to quality education.  For more.

·       Create concentrated housing, especially affordable housing near jobs.  To reduce the damage to our environment.  To reduce the cost of providing utilities.  To reduce the amount of commuting, fuel consumption, congestion and polluting.  To increase the time that people have to spend with their families, civic activities and other interests.

For more.  For more.  For more.  For more.

 

Barack Obama and other Democrats are now getting it.  Their primary emphasis until our election and hopefully into next year will be creating jobs.  For more.  For more.  This will be popular with most people, except die hard Conservatives who oppose all public investment.  Once legislation is passed to fund and promote jobs, we can expect employment to begin increasing.

 

Conservatives, some Blue Dog Democrats and others will push to reduce deficit spending.  Demand for investment to create useful jobs will increase emphasis upon eliminating spending that does not produce useful outcomes.  For examples, many non-productive subsidies and spending for irrelevant military equipment.

 

We have the most expensive and inefficient health-care system in the industrialized world, the most wasteful energy usage, the lowest savings rate, the worst maintained infrastructure, and a complex and corrupt tax code.  For more.  For more.  It’s surprising that we aren’t doing worse than we are.  After 8 years of inaction or negative action, we can expect that our Democrats will move quickly in 2009 to begin turning all these failings around. 

 

Avoid Foreclosures and Produce Affordable Housing

 

Some people who face foreclosure are not qualified to own a house.  Others are qualified, but obtained a loan which is unduly large or has unduly high interest rates.  In either case, our government may be able to acquire the house inexpensively, enabling the lender to avoid the expense of foreclosure, maintenance and resale in a poor market. 

 

The government could then resell the house at a lower price, with the condition that the new owner cannot resell the house at a price higher than the price he or she paid for it plus inflation.  The house should be sold to the defaulting owner if he or she is qualified.  If the defaulting owner is unqualified to buy the house even at a lower price, the house would be sold to someone else, who will occupy it or rent it out.  If the house is rented out, the defaulting owner may be given a preference to rent it.

 

This approach accomplishes several worthwhile objectives.  The lender is able to avoid the expense of foreclosure.  The house is not foreclosed, perhaps to be vacant to the detriment of the house and neighborhood.  The house becomes an affordable house.  The new owner or tenant pays less for their house.  For more.  For more.

 

Here’s the Beef

Management by crisis.  How about some proactive management?

A brief history of our financial bubble and collapse.

State regulators tried to stop the bubble, but were thwarted by federal officials.

A whistle blower about unregulated speculation in derivatives was ignored.

A former congressman says financial company lobbyists influenced congress against regulation.

What five economists think about our financial collapse.

Making more credit available may support our environmentally unsustainable consumption.

Are we losing more natural capital each year that we have lost in our current financial collapse?

Environmental organizations oppose support for dirty fuels.

We can afford the costs of restoring good jobs with fair earnings.

Most people never had large amounts in the speculative 401(k).  Now they have less.

A variety of electric cars are being developed and beginning to be sold.

Our credit crisis goes global.

Our U.S. has lost the right to appoint the president of the World Bank

 

Our Liberal Spirit

 

Small Is Beautiful

 

I strongly recommend that you read E.F. Schumacher’s book, Small Is Beautiful.  Imagine that our economy is oriented to satisfying our basic values instead of our greed for more stuff.  We would be spending less time working for earnings and less time commuting.  Less of our work would be manufacturing, construction, transportation and financial and other managerial services.  More work would be delivering services which care for others.

 

We would buy, consume and store less stuff.  And spend less time securing and maintaining our stuff.  Some of us might spend more of our time in social activities.  Others might spend more time alone, pursuing various interests.  Being freed from our present time constraints, we could avail ourselves of many opportunities. 

 

Spending less time doing things which are not satisfying in themselves,  we would have more flexibility to achieve a balance among our family, work, civic and leisure activities.  We would be less exhausted at the end of days.  Less likely to sedate ourselves with trivial television and other means. 

 

Does this seem too idyllic?  Europeans now work less and enjoy more leisure than we do.  What would we lose if we acted more like they act?  Think about what you would do with your time.

 

Recommended Books – See our list of books for liberals

 

Barack Obama said we should not just leave Iraq.  We should change our mindset that got us in there.  Similarly, we should not just quit our excessive and unsustainable borrowing and consuming and speculating.  We should question and change the mindset that allowed us to create our borrow and spend and speculate society.

 

These books all question whether an economy should be oriented to increasing production and consumption of stuff, instead of being primarily focused upon helping us realize our values.  They were responses to the realization of environmental limits, but went beyond concerns with conserving resources to concerns with realizing other values.

 

Edmund S. Phelps, 1962, The Goal of Economic Growth

E. F. Schumacher, 1973, Small Is Beautiful, Economics as if People Mattered

Mancur Olson and Hans H. Landsberg (eds.), 1973, The No-Growth Society

Willis W. Harman, 1976, An Incomplete Guide to the Future

E. J. Mishan, 1977, The Economic Growth Debate, An Assessment

Hazel Henderson, 1980, Creating Alternative Futures, The End of Economics

Hazel Henderson, 1981, The Politics of the Solar Age: Alternatives to Economics

Daniel Bell and Irving Kristol (eds.), 1981, The Crisis in Economic Theory

Robert Kuttner, 1984, The Economic Illusion, False Choices Between Prosperity and Social Justice

Robert N. Bellah, Richard Madsen, William M. Sullivan, Ann Swidler and Steven M. Tipton, 1985, Habits of the Heart

Thomas Michael Power, 1988, The Economic Pursuit of Quality

Herman E. Daly and John B. Cobb, Jr., 1989, For the Common Good, Redirecting the Economy Toward Community, the Environment and a Sustainable Future

Frances Moore Lappe, 1989, Rediscovering America’s Values, A Provocative Dialogue for Exploring Our Fundamental Beliefs and How They Offer Hope for America’s Future

1989, Redefining Wealth and Progress, New Ways to Measure Economic, Social and Environmental Change

Robert N. Bellah, Richard Madsen, William M. Sullivan, Ann Swidler and Steven M. Tipton, 1991, The Good Society

George P. Brockway, 1991, The End of Economic Man, Principles of Any Future Economics

George P. Brockway, 1995, Economists Can Be Bad for Your Health

Frank Ackerman, David Kiron, Neva R. Goodwin, Jonathan M. Harris and Kevin Gallagher (eds.), 1997, Human Well-Being and Economic Goals

 

 

 

 

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