Puget Sound Liberals Weekly Newsletter #218

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.

 

          3500 members                             March 19, 2010                   formerly Lake Hills Liberals                

 

 

 

 

                                                     

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              Table of Contents     * Featured Articles

 

Opportunities

Petitions

 

Communication to Our Members

Is There Enough Time to Pass Health Care Reform?**

 

Commentaries from Our Members

Ray McBain: Can Reconciliation Improve the Senate Bill?

Cindi Laws: Remove Marijuana Penalties

 

Liberals and Democrats Links to the Beef

Health Care Reform

Job Creation

Regulating Wall Street

Fiscal Responsibility

The Coffee Party Movement**

Paul Loeb: Democrats Must Stimulate Youth Vote*

 

State and Local Links to the Beef

Featured Advocacy Group: InspireSeattle

Barbara Boxer Supports Corrupt Patty Murray

 

Nation and World Links to the Beef

Value of Dollar and Cost of Oil

Human Development Approach to Afghan Village Dev’t

Helping Israel In Spite of Itself

 

Our Liberal Spirit

When the Going Gets Tough, What Then?**

 

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 5 Major Needs

·       Federal Funding for Health and Education

·       Public Campaign Financing

·       Substituting a Progressive Income Tax

·       Replacing Conservative Legislators

·       Stopping Corporate Abuse

 

Quote of the Week

When the Going Gets Tough, the Tough Get Going.  Attributed to various people and given various meanings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Calendar of Events

March 20 at 6 PM (reception) and 7 PM (Dinner and Program) at Seattle Center Fisher Pavilion - 20th Annual Futurewise Reunion.  $50.  For more information.

Saturday, March 20 at 6:30 PM at Betsy Bell’s home (4455 - 51st Avenue SW, West Seattle) - InspireSeattle Potluck and Discussion of debt relief for impoverished nations.  For more.Saturday,

Friday April 9 at 6 PM at 338 - 10th Avenue, Kirkland - Making Democracy Work Fundraiser supporting the Greater Seattle League of Women Voters.

 

 

Saturday, April 30 - May 2 at Seattle Pacific University in Seattle - Wellstone Action Campaign Management Fundamentals, including:

·       Activist track:  For people interested in citizen lobbying, issue advocacy, and community organizing, this track provides skills in how to win on issues.

·       Campaign track: This track focuses on how to be an effective staff or volunteer member of a winning progressive campaign.

·       Candidate track: This is for people who have made the decision to run for office.

Varying cost.  To register.

 

Calendars 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 

Conversation Cafe      Drinking Liberally          Seattle NOW          

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Opportunities

About Puget Sound Liberals

Basic Training

Commentaries that have addressed major issues

Helpful websites

 

Obtain a free ‘Corporations Are Not People’ bumper sticker.

 

Petitions

Tell your congress members to support a reconciliation measure.

Tell House Speaker Pelosi to include a public option in the reconciliation measure.

Tell the Department of Energy to maintain the moratorium on shipping nuclear waste to Hanford.

Tell President Obama to refuse to recognize Sudan’s election as free and fair.

 

Communication to Our Members

 

Is There Enough Time to Pass Health Care Reform?

 

The Congressional Budget Office evaluation of the fiscal effects of health care reform was expected on Monday, but wasn’t reported until Thursday morning.  Fortunately it was favorable.  For more.  But the delay in reporting may not leave enough time to pass a reconciliation measure before the Congressional recess is scheduled to begin the week after next.  President Obama could ask for delaying the recess or call for a special session.  But there is apparently no attempt to do either of these.

 

I don’t understand why President Obama wants to go to Indonesia at this time, when his influence on congressional members who may vote against a reconciliation measure is so important.

 

Commentaries From Our Members

 

Ray McBain: Can Reconciliation Improve the Senate Bill?

 

OK, so here's the question: What are the chances the reconciliation process will succeed in amending the senate bill to something more agreeable? (And what changes can be made?) Ray McBain

 

Cindi Laws: Remove Marijuana Penalties

 

Hi Dave, I am working on I-1068, the initiative to take away the civil and criminal penalties on marijuana.  It would be wonderful if you could endorse this. We picked up several LD endorsements yesterday at the caucuses, but the most important thing is to get endorsements so that orgs with newsletters and email blasts can notify folks that this initiative is out on the streets and worthy of signing.
 
As you know, there were a plethora of great legislators who sponsored bills to legalize, decriminalize, and/or fix our 12-year old (and weak) medical marijuana situation.
 
Read I-1068

Ballot Title Statement of Subject: Initiative Measure No. 1068 concerns marijuana.

 

Concise Description: This measure would remove state civil and criminal penalties for persons eighteen years or older who cultivate, possess, transport, sell, or use marijuana. Restrictions and penalties for persons under eighteen would be retained. Should this measure be enacted into law? Yes [ ] No [ ]

 

Ballot Measure Summary This measure would remove state civil and criminal penalties for persons eighteen years or older who cultivate, possess, transport, sell, or use marijuana. Marijuana would no longer be defined as a “controlled substance.” Civil and criminal penalties relating to drug paraphernalia and provisions authorizing seizure or forfeiture of property would not apply to marijuana-related offenses committed by persons eighteen years or older. The measure would retain current restrictions and penalties applicable to persons under eighteen.  Cindi Laws 

 

I endorse Initiative 1068.  Dave Thomas

 

Liberals and Democrats

 

Health Care Reform

 

Contrary to Republican claims, most people support health care reform, as a moral imperitive.  Many groups also support health care reform.  Michael Moore disparages the health care reform bills, but says we must support them.  Contrary to Republican claims, Senator Harry Byrd has endorsed using reconciliation procedures. House Speaker Nancy Pelosi is using various arguments to persuade Democratic representatives to support a reconciliation measure, including some who opposed it based upon the abortion issue.  For more.  For more. 

 

MoveOn is raising money to support primary challengers to house members who vote against a reconciliation measure.  SEIU is also promising to support primary challengers.  For more.  This is a role that Organizing for America would have played if it had been kept independent of the Democratic Party.  Like to vote for the house health care reform measure, we won’t be sure whether the house will support the reconciliation measure until it happens or doesn’t.

 

Reconciliation votes await Congressional Budget Office report, still not available on Tuesday.  For more.

 

Adam Green of the Progressive Change Campaign Committee lists 51 senators who will vote for a reconciliation measure which includes a public option.  Charles Chamberlain of Democracy for America sent an email that on Friday, Senate Majority Whip Dick Durbin announced that “the Senate will support and pass whatever the House includes in a reconciliation bill -- even if it includes the choice of a public health insurance option.

 

This gives Speaker Nancy Pelosi a historic opportunity to take the reins back on behalf of the House of Representatives and the majority of Americans who want a public option. It's up to us to make sure Speaker Pelosi doesn't kill the public option because she's afraid to act. She needs to know that we'll be there to have her back. We'll whip Congress to pass the bill and help every step of the way to get the majority votes we'll need to win. Sign the petition right now and we'll deliver each signature to her office at the end of the day on Monday. And then again on Tuesday. And again on Wednesday. We'll deliver the new signatures every day until she gets the job done.

The fate of the public option is in Speaker Nancy Pelosi's hands. It's up to us to make sure she doesn't kill the most popular piece of reform.”

President Obama has included money in his budget for community health care centers that offer primary care, dental care, mental health care and low cost prescription drugs and for training of primary care providers.  These community health care centers replace expensive emergency room visits without funding private health care insurers.

 

Rising private health care insurer costs passed on to workers reduce their wages.

 

Job Creation

 

Democrats continue to consider job creating measures that Republicans will have difficulty opposing without appearing to be against job creation.  For more.

 

Regulating Wall Street

 

After health care reform is passed, the Obama Administration will belatedly focus upon regulating large financial corporations and upon campaign finance reform. 

 

Democratic Senator Bernie Sanders has asked President Obama to recruit Federal Reserve members who will represent Main Street instead of Wall Street Interests.  They should support:

1.      Prohibiting usurious interest rates and fees. Right now, the Federal Reserve has the authority to ban unfair and deceptive financial products. This can and should include a prohibition on usurious credit card interest rates and fees. Millions of American consumers and small businesses are paying interest rates as high as 35 percent on their credit cards. At the same time, financial institutions are able to borrow money from the Federal Reserve with virtually no interest at all. This is extremely unfair. We hope that you will pick nominees for these positions who will do everything within their authority to end the outrageously high interest rates that Americans are currently forced to pay.

2.      Increasing lending to small businesses to create jobs. The Federal Reserve has the responsibility to conduct monetary policy in a manner that leads to full employment. The Federal Reserve can and should use this authority to provide direct loans to credit worthy small businesses at affordable interest rates and to provide community banks with the financing they need to offer affordable small business loans. We hope that your nominees to the Federal Reserve are committed to fulfilling the Fed's full employment mandate.

3.      Reducing the size and risk-taking of large financial institutions so that they are no longer too-big-to-fail. The Federal Reserve has the authority and the responsibility to protect the safety and soundness of financial institutions and to guard against systemic risk in financial markets. We hope the nominees you choose for the Federal Reserve share the views of Paul Volker and other experts who believe that we need to "keep [banks] small, so that any failure won't have systematic importance."

4.      Increasing transparency at the Federal Reserve. It is important that whoever is nominated to the Federal Reserve is committed to making the central bank more transparent. Since the start of the financial crisis, the Federal Reserve has provided over $2 trillion in virtually zero interest loans to the financial sector and large corporations, but has not disclosed the names of the recipients or the exact terms of this assistance. That is unacceptable. We need people at the central bank who understand that this money does not belong to the Federal Reserve. It belongs to the American people, and the American people have the right to know how that money is being spent.

5.      Lowering the foreclosure rate. The foreclosure rate is still the highest on record, turning the American dream of homeownership into the nightmare of foreclosure for too many American families. The Federal Reserve has the ability to reduce the foreclosure rate and keep people in their homes. We hope your nominees will be committed to supporting policies at the central bank that will significantly reduce the number of foreclosures in this country.

6.      Prohibiting excessive compensation packages at financial institutions. Last year, big banks and Wall Street firms that are now regulated by the Federal Reserve provided tens of billions in bonuses to CEOs and other executives. This is an insult to the American people who bailed them out and who continue to suffer economically as a result of their greed and recklessness. We need a Federal Reserve committed to ending the "heads banks win; tails taxpayers lose" compensation system. Rather, we should be moving toward a system that discourages compensation practices that reward excessive risk taking.

 

Senator Christopher Dodd is introducing a financial regulation bill that empowers the Federal Reserve, but also places limits on its ability to avoid financial regulation.

 

Fiscal Responsibility

 

Our United Steel Workers notes that our super wealthy are thriving, the wealth of the top 400 having doubled since President Bush’s 2005 tax cuts, such that they have more wealth than 155 million Main Street Americans.  Our super wealthy should be taxed to raise revenue to lower our deficits and fund job stimulation.  Unfortunately, there is no indication that the Obama Administration will do this, leaving them open to charges of fiscal irresponsibility.

 

The Coffee Party Movement

 

The newly created Coffee Party Movement is a Liberal counterpart to the Tea Party Movement.  Like the latter, its participants want our government to represent Main Street America and be fiscally responsible.  The Coffee Party movement is organizing to represent citizens who believe in government solutions for national problems, but aren't necessarily enthralled with Democratic leadership.  More from a Coffee Party website.  Members are not against the government.  They are for Democracy and opposed to Corporatocracy.  For more.  For more.

 

The Coffee Party may become what Organizing for America could have become if it had remained independent of the Democratic Party.  It may attempt to persuade Democrats to support Main Street jobs and fiscal responsibility instead of Wall Street interests and large deficits.  It may attempt to persuade President Obama to attempt ‘change we can believe in’ instead of forsaking such change in attempts to compromise with Wall Street interests.

 

Paul Loeb: Democrats Must Stimulate Youth Vote

 

If the Democrats don't get the youth vote, they're toast. That happened in Virginia, New Jersey, and Massachusetts, where young Obama voters stayed home in droves. It's an ugly conceivable future portended by a new Harvard poll that shows forty-one percent of young Republicans planning on voting in November, compared to 35 percent of young Democrats and 13 percent of independents. A recent Pew poll showed a similarly disturbing pattern: Young voters still prefer the Democrats, but their margin is slipping and their enthusiasm level is worse.

 

Some reasons and some solutions:

·       The Democrats need to tackle youth joblessness. They've passed important changes in student financial aid, like income-contingent loan repayment. Most students and recent students don't know about them, and they need to. But with youth unemployment at near-record levels, it's understandable that young men and women would feel angry and frustrated. If the Democrats want to keep this generation, they need to pass major jobs bills, probably through reconciliation, since the Republicans seem to be only too eager to leave young voters demoralized and unemployed. It would be nice if the Obama administration were leading on this more strongly, but since they aren't pressing strongly enough, the push to make jobs the top priority has to come from the grassroots. This happened in the 1930s under Roosevelt. Seventy-five years later, I can visit a Works Progress Administration-created library or go for a run on a Works Progress Administration-created boardwalk, and reap the benefits of programs that also gave millions of people desperately needed jobs. We need to make equivalent investments now, targeted at those who need jobs the most.

 

·       Dashed hopes also matter. Politics may be the art of compromise, but from health care to Guantanamo to Afghanistan and the bank bailouts, the compromises of the Obama administration have added up to belie the image of a candidacy of change. To reverse this trend, the administration needs to stand up more strongly on all the issues that matter, and with less apology and deference toward those who have no interest in solutions.

 

·       But we need more than specific programs or even Presidential initiatives. We need to give people a renewed sense of why involvement matters. Absent a sense of how social change has occurred in the past and can again, it's tempting to give up when you've barely begun, all the more in an instant attention and instant gratification culture. Given that few of us know the stories of how previous citizen activists persisted and prevailed, it's understandable that many who were acting so passionately just over a year ago feel adrift and unable to make an impact. That's true of more experienced activists, but it's particularly true of those for whom the Obama campaign was first step into trying to create a more humane common future. Those of us who've been involved longer (including veteran youth activists) need to offer this perspective, to help those more recently involved avoid cynical resignation and withdrawal.

 

·       We need these lapsed activists and particularly lapsed youth activists, because they're the ones who will reach out to their peers. During the 2008 election, you could go anywhere in battleground states and find efforts to engage young voters. In the Virginia, New Jersey and Massachusetts elections, the campaigns largely ignored them and the parallel independent efforts that might have filled the gap didn't exist. Without being reached by these more personal approaches, young voters were left more isolated, more readily manipulated by 30-second ads, and more likely to simply stay home. As I explore in my Soul of a Citizen book, change works best when people approach those they already know, within familiar contexts. And when campaigns, movements, and their supporters reach out in ways that offer a chance for genuine dialogue. Some of this can be through social media--we need the texting, Facebooking, and other networking that helped the Obama campaign bloom. But these approaches work best when complemented by more visible public actions and more direct personal dialogue. If we're going to enlist those who once acted and speak to their legitimate discontents, we're going to need to recreate this one-on-one reach, and begin to recreate it now, not just in the last two weeks of the campaigns.

 

As the recent surveys imply, the stakes in this are huge--not just for now or for November, but for the ongoing allegiance and participation levels of a generation. Whether citizen activists can help the Obama administration and the Democrats reengage those who carried them to victory in 08 will shape American politics not just in the coming year, but for decades to come. The Obama administration can play a critical role in demanding action on issues that affect young voters' lives. The Congress can use all available options, including Reconciliation, to pass them. But it's up to the rest of us to offer the examples of connection, context, and continued commitment.  Paul Loeb

 

Here’s the Beef

Hispanic voters are pressuring President Obama to act on immigration reform.

Federal judge allows torture suit against former Bush Defense Secretary Donald Rumsfeld.

 

State and Local

 

Featured Advocacy Group

------------------------------------ InspireSeattle ------------------------------------

 

InspireSeattle’s Vision is to create connection throughout our community and better community through activism.

 

InspireSeattle's Mission is to provide a fun, supportive gathering for people who care deeply about our community, our country and our planet. We embrace progressive policies that improve our society and protect our environment.

 

InspireSeattle's Primary Objectives are:

·       Building community

·       Providing education

·       Inspiring activism

·       And having fun!

 

InspireSeattle social events are informal potlucks held at member's homes.  These events are fun educational forums featuring local experts speaking on key issues of our times.  InspireSeattle's goal is to provide a lively, fun as well as informative discussion on current issues. We are not trying to obtain total agreement on topics discussed in our meetings, but rather to educate members as to different viewpoints. In building our local Progressive community through grassroots efforts like ours, we believe it is important to provide people with educational opportunities to understand different aspects of current issues as well as a fun, friendly environment in which to discuss these. Our guest speakers are encouraged to share their insights and thus to lobby for the support of InspireSeattle members towards their goals.

-------------------------------------------------------------------------------------------------------------------

 

Barbara Boxer Supports Corrupt Patty Murray

 

Democratic Senator Barbara Boxer (referring to Patty Murray) says, “With America just beginning to recover from economic turmoil and critical health care reforms on the line, it's critical that we keep leaders in the Senate who are committed to making the changes we need -- no matter how many special interests stand up over and over again for the status quo and no matter how vicious the attacks.” 

 

Barbara Boxer ignores Patty Murray’s vote against cancelling the unneeded F-22, an act of fiscal irresponsibility geared solely to Patty Murray’s re-election.  In addition, Patty Murray has frequently used earmarks to benefit her campaign contributors.

 

Here’s the Beef

Adam Smith and Brian Baird have not decided whether to support health care reform.  Brian Baird voted against it before.  Adam Smith voted for it.  For more.

 

Nation and World  

 

Value of Dollar and Cost of Oil

 

Greece has large deficits and to a lesser extent, so do Spain, Portugal and Italy.  Reacting to this, the value of the euro has fallen relative to the dollar.  In spite of the increased value of the dollar, the price of oil is now about $8 $70 a barrel.  Now that other European countries may assist Greece and other countries to reduce their deficits, the value of the dollar may fall again.  If so, we can expect oil prices to increase. 

 

A fall in the value of the dollar assists our trade balance and job creation by increasing exports and decreasing imports.  The associated increase in the cost of oil has the benefit of discouraging its use and the negative effect of giving money to foreign oil providers which would otherwise create American demand for jobs.  For more.

 

Human Development Approach to Afghan Village Development

 

Beginning in the 1970s, the Institute of Cultural Affairs conducted hundreds of human development projects in Indian, Kenya, the Philippines and dozens of other countries.  I participated in some of these including 22 that I managed in the Philippines.  The ones that I managed consisted of 6 meetings in three days in rural villages or urban neighborhoods.  The six meetings were prefaced with noting that while humans are like other animals in many ways, we differ in having more imagination, including the ability to have visions of a better life and better community.  So we would be acting in a very human way.

 

During the first four meetings, the villagers:

·       Shared their vision for their community (if they left for three years and came back to find it perfect, what would they want to continue and what changed?)

·       Identified obstacles to this vision (for example, lack of constructive leadership and cooperation, knowledge, and capital)

·       Created strategies for overcoming the obstacles

·       As tactics, created teams to plan and implement small projects to gain experience in realizing their vision through using the strategies to overcome the obstacles.  Many of these projects were livelihood projects, such as raising livestock, beginning a sewing business, starting a restaurant).  Others were creation of such public services as a health clinic, school or sanitation system.  Still others oriented to maintaining their cultural identity as a unified community.

 

During these first four meetings, the mood began with excitement about the vision, gloom about the obstacles and then increasing optimism about the strategies and tactics.  The fifth meeting provided training in leadership and cooperation and in planning and implementing of livelihood projects, including market analysis, finding expertise and creating capital.  The sixth meeting provided participants a graduation certificate, reflection on their work and celebration of it. 

 

I can imagine a similar approach being used in Afghan villages to enable the villagers to begin developing their villages.  Although we could assist the villagers with expertise and capital, we should avoid making them dependent upon us.  If the desire to make projects successful leads to taking responsibility for their success, the Afghans will reduce their efforts and ability to conduct their own projects.  When the outsiders leave, the projects will collapse.  The goal is make them self sufficiently able to continue their development with little outside assistance, which requires that outsiders limit their assistance.

 

Helping Israel In Spite of Itself

 

Israeli’s democracy gives great power to religious extremists who promote increasing numbers of Jewish settlements in Palestine, in spite of their illegality under international law and in spite of their being the largest obstacle for peaceful resolution of the Israeli - Palestinian conflict.  Our U.S. should eliminate all aid to Israel until it abandons the settlement.  We should seek U.N. peacekeepers to guard both sides of the 1967 border to prevent attacks across the border.  We should also demand that international nuclear non-proliferation inspectors search for Israeli nuclear arms and destroy any that are found.  With these steps, we can guarantee that both Israel and Palestine can continue as states at peace with each other.

 

Perhaps Palestine should declare itself a state and seek backing from other countries.

 

Here’s the Beef

China is assembling an Asian equivalent of the IMF.

Paul Krugman calls for a tariff upon imports from China in response to its undervaluation of its currency.

 

Our Liberal Spirit

 

When the Going Gets Tough, What Then?

 

At one of several social gatherings that John Burbank (Executive Director of the Economic Opportunity Council) held for Dean Baker to describe his views concerning our economic collapse and needed responses, Alan Durning (Executive Director of Sightline) asked Dean Baker whether the collapse motivates people to give up and do nothing beyond complaining.  Dean Baker didn’t respond, perhaps because it is more a political science question than an economics one.  I responded that while some people do nothing beyond complaining, others work actively for reform.  

 

We can see this in our present situation.  The Tea Party Conservatives primarily complain about the way Wall Street is favored over Main Street and about fiscal irresponsibility.  But others, who may be creating the Liberal Coffee Party, intend to work actively for reform which favors Main Street and fiscal responsibility.

 

Those who supported Barack Obama during his election campaign and have been formed into Organizing for America placed under the control of the Democratic Party might realize that they have been neutralized.  They have not and can not pressure Inconsistently Liberal Democrats to support change we can believe in.  To become a force for reform, they should consider joining the Coffee Party.

 

The Coffee Party might well adopt the same Netroots strategy that was encouraged by the Barack Obama election campaign.  This enabled his supporters to organize horizontally and from the bottom up instead of being rigidly controlled from the top down.  Such organizing should have occurred earlier, but it should occur now on the assumption that perhaps it is not too late.  Only such action can lead to increased reforms to provide us more freedoms and opportunities.

 

Recommended Books – See our list of books for liberals

 

Joseph E. Stiglitz, 2010, Freefall. America, Free Markets, and the Sinking of the World Economy

 

Joe Stiglitz, James Galbraith, Robert Kuttner and Dean Baker largely agree about how our housing and credit bubbles have occurred and collapsed and about what our response should be to alleviate the collapse and prevent future bubbles.  My recommendations agree with theirs because I have made them based upon theirs.  However they focus upon preventing Wall Street caused bubbles and helping create Main Street jobs.  They do not give much attention to raising revenue and eliminating waste to reduce deficits.  I believe such fiscally responsible measures must also be implemented.

 

Joe Stiglitz notes that many contributors to our bubbles, including both Republicans and Democrats can be blamed:

·       Fraudulent housing mortgages resulting from loan originators, appraisers, bank lending officers

·       Securitization

·       Naïveté of those buying securities

·       Rating agencies

·       Deregulation and the free market assumptions supporting deregulation

·       Lack of preventive action by our Federal Reserve

·       Low interest rates

·       Bailouts of ‘too big to fail’ financial corporations

·       Political clout of Wall Street speculators.

 

Joe Stiglitz suggests different responses our economic collapse should have been made to prevent Wall Street interest from continuing their speculation:

·       ‘Too big to fail’ financial corporations should have been treated differently.  Instead of simply bailing them out, they should have been treated as other bankrupt companies are, their shareholders wiped out and their bondholders assuming ownership with no guarantee that they would be bailed out and thus no moral hazard of again being allowed to engage in speculative activities with out risk to them. 

·       To discourage Wall Street speculation by large financial companies, financial transaction taxes should have been levied, margin requirements increased, retained ownership of securities required, and hedging restricted to circumstances where a loss would occur without the hedging.

·       Money that was directed to bailing out ‘too large to fail’ financial companies should have been directed to existing or newly created smaller banks and credit unions which make appropriate loans to businesses and consumers.

·       Financial companies which threaten to foreclose mortgages that are larger than the value of mortgaged houses should have been forced to readjust these mortgages such that the house owners could afford to stay in the houses as owners or at least as renters.

 

All of these measures and restricting the lobbying activities of Wall Street speculators would have been easier if done immediately after the housing-credit bubble collapse, while the collapse and the role of Wall Street speculators occupied our attention.  Joe Stiglitz notes that due to a lack of vision concerning the economy we need, our Obama Administration did not implement these measures.  We must change from a Borrow, Consume and Speculate mindset and practices to an Earn, Conserve and Invest mindset and practices.  By not taking a clear stand in favor of Main Street instead of Wall Street, our Obama Administration opened itself to criticism by both Tea Party Conservatives and Liberals. 

 

Joe Stiglitz and the others noted above focused upon assisting the recovery of Main Street jobs through Keynesian provision of money to state governments, infrastructure investments and individuals who would spend it to create demand for jobs, even if this causes increased deficits, at least temporarily.  In proposing a financial transaction tax, the goal is to reduce speculation.  Raising money to lower the deficit is not mentioned.

 

Perhaps Joe Stiglitz considers increasing revenue and reducing wasteful spending to lower deficits as primarily political instead of economic.  For whatever reason, his and Barack Obama’s failure to address reducing the federal deficit, leaves them open to charges of fiscal irresponsibility.  Unless Wall Street speculators and other high income people are taxed in produce revenue to lower deficits, both Tea Party Conservatives and Liberals will rightfully criticize the Obama Administration for fiscal irresponsibility.

 

It is more difficult to implement these proposals now, but maybe not impossible to implement at least some of them.  Unfortunately, our Obama Administration still seems to have no clear vision of a needed future economy and is not clearly adopting these proposals.