Skip to main content

I haven't been able to write a diary for a few days.  The local Obama campaign has been stepping up its activities so that means that we have many more results from the phone bank and the canvassing to key in during the wee hours of the morning.  I have really been wanting to talk to you about this speech from Bernie Sanders.  Bernie, as I hope you are aware, is our lone Socialist Senator,  He is special for many reasons beyond that.  His recent speech about the economic crisis is linked above.  Look below the break for some highlights and comments.

Here is how he starts:

Mr. President, let me begin by concurring with Senator Brown. He raised a very important issue, and that is: In the midst of a major economic crisis, when people today--especially senior citizens on fixed incomes--are wondering about how they are going to heat their homes, how they are going to purchase the food they need--I wonder about 3 years ago, had we listened to President Bush, if we had listened to John McCain, if we had listened to the Republican leadership and we had privatized Social Security--can one begin to imagine the anxiety that would be existing all over this country in terms of senior citizens wondering what kind of retirement they would have, what kind of funding would be there for their remaining years? So thank goodness we did not follow the advice of President Bush and John McCain and the Republican leadership; thank goodness we kept Social Security strong.

 It is sobering to think about how narrowly we escaped this one very drastic revision of American Democracy while other parts were being systematically dismantled.  He has consistently spoken out about them too.  If anyone in the Senate has been consistent as a spokesperson for the people it has been Bernie.  He goes on to explain our plight a little more honestly than most who are merely doing spin or cheerleading:

 Now in order to give the American people a full understanding of the risks posed by these unregulated credit default swaps--unregulated credit default swaps--I wish to read a short September 15 article by Professor Peter Cohen, a graduate of the Wharton School, that deals with the full scope of the problem we face and the role that Senator Gramm had in its creation. I apologize to anybody who is listening. What is following is technical, it is a bit boring, but when we are dealing with trillions of dollars, I think it is important that we try to understand this. This is what Professor Cohen writes:

  Lurking in the background of this weekend's collapse of two of Wall Street's biggest names is a $62 trillion segment of the $450 trillion market for derivatives that grew huge thanks to John McCain's chief economic advisor, Phil ``Americans are Whiners'' Gramm.

  Let me just go through these numbers again, because these numbers are so huge. When the Presiding Officer and I represent our State, we fight for a few million dollars here and a few million dollars there, and that makes a lot of difference to the people of Colorado or the people of Vermont. What we are dealing with is so incomprehensible: It is a $62 trillion segment of the $450 trillion market for derivatives. Who can even understand what that means? A $450 trillion market, what does that mean?

  Now, all of this occurred, all of this deregulated activity, of which the Government plays no role, took place because in December of 2000, Senator Gramm snuck in--snuck in--a 262-page amendment. That is what goes on around here. We can sneak in 262-page amendments to a government reauthorization bill that created what is now the $62 trillion market for credit default swaps, or CDS's.

 He goes on to quote Cohen further and you can read that.  The essence is the trap that was set by these maneuvers and the role that NcCain/Gramm played in it.  It is really overpowering when you take it all in.  Then he punctuates the magnitude of the problem:

Professor Cohen continues:

  It will become as familiar as the phrase subprime mortgage--

  Which, unfortunately, many of us now are familiar with--

  was in the year 2007. Unfortunately--

  Get this, this is quite amazing--

  there were ``only'' $1.3 trillion worth of subprime mortgages and the CDS market is 48 times bigger than that.

  Forty-eight times bigger than the subprime market--

  and more than four times bigger than the U.S. GDP. And since nobody has ever had to deal with this volume of CDS unwindings, it is impossible to calculate how much they will cost.

  In other words, what has happened as a result of Senator Gramm's legislation is, unbelievable amounts of money have been traded, accumulated without anybody really knowing what is going on. Now we are left trying to pick up the remains of those problems.

  Professor Cohen's article is compelling because it tells us how huge this crisis is and why we have every reason to fear that AIG may well be just the first of many companies involved in risky investments that the American people will have to bail out.

 I don't know about you, but this is really mind boggling to me.  How we could have let this happen is just another statement about how government has totally failed us and made it possible for a lot of people to get even richer at the expense of the people.  It is one thing, and an important thing, to spell this out in all its ugly detail.  It is even more important to see where we must go to rebuild the government and the economy.  In that spirit he says this:

The time for hand wringing is over. This Congress needs to put an end to the radical deregulation that was pushed by Senator Phil Gramm and many other Republicans, and there were Democrats who went along with that as well. We need to put the safety walls back up in the financial services sector. We need to regulate the electronic energy markets. We need to end the use of unregulated credit default swaps. In other words, what we need to do once again is have the U.S. Government play an important role in protecting the people of this country against the greed of large corporate interests.

  Unfortunately, the response from the administration and Wall Street is not to do that but to push for further consolidation in the financial services sector. Here is just an amazing thing. The argument we are hearing over and over again is that AIG was too big to fail, and what we are now creating are institutions that are even larger than AIG. And 10 years from now, when these institutions are threatened with collapse, there will be people coming up saying: Oh my goodness, we can't allow those to fail; we have to bail those out as well.

  This country can no longer afford companies that are too big to fail. If a company is so large that its failure would cause systemic harm to our economy, if it is too big to fail, then it is too big to exist. If it is too big to fail, it is too big to exist. We need, as a Congress, to assess which companies fall in this category. Bank of America is certainly one of them. Those companies need to be broken apart. We cannot have companies so huge that if they go under they take the world economy with them.

  Then once we break them up, if a company wants to act in a risky manner, if they want to take risks in order to make some quick bucks, that is OK. If they want to take the risk and they want to lose money, that is OK. The American people should not have to, and would not be under those circumstances, be left to pick up the pieces.

  Finally, in terms of dealing with this unfolding disaster, we need to make sure working Americans, the middle class, do not foot the bill. If the economic calamity requires a Federal bailout, it should be paid for by those people who actually benefited from the reckless behavior of people empowered by the extreme economic views of Senator Gramm, President Bush, Senator McCain, and many others.

  In other words, the point I am making is that in the last 10 years, many of these people have made billions and billions of dollars. It is unfair to simply ask the middle-class working families who are trying to figure out how they are going to pay their fuel bills, how they are going to send their kids to college, to bail out these large institutions from which many people made huge amounts of profits.

  We don't talk about this too often, but today the wealthiest one-tenth of 1 percent earns more income than the bottom 50 percent. The top 1 percent owns more wealth than the bottom 90 percent. And the wealthiest 400 Americans in this country have not only seen their incomes double, their net worth has increased by $640 billion since George W. Bush has been in office.

  Can you believe that? Four hundred families, four hundred people, less than the Congress, have seen a $640 billion increase in their wealth since President Bush has been in office. And, amazingly, these 400 families are now worth over $1.5 trillion--400 families. On average, they earn over $214 million a year.

  As a result of President Bush's policies, amazingly enough, their tax rates have been cut almost in half to only 18 percent on average. Amazingly, the wealthiest 400 Americans pay a lower tax rate than most police officers, teachers, firefighters, and nurses. So if you are one of the very wealthiest people in this country, if you are earning $214 million a year on average, you pay a lower tax rate than somebody who is a police officer, a teacher, a firefighter, or a nurse.

  That may make sense to somebody; it does not make sense to me. What does it say about us as a nation when the middle class pays a greater percentage of their income in taxes than the wealthiest 400 Americans?

  It is this very small segment of our population that has made out like bandits--frankly, some of them are bandits--during the Bush administration. We have to recognize that when we talk about who is going to pay for the bailouts.

  In my view, we need an emergency surtax on those at the very top in order to pay for any losses the Federal Government suffers as a result of efforts to shore up the economy. It should not be hard-working people who are trying to figure out how they are going to keep their families economically above water, people who are working longer hours for lower wages, people who have lost their health care, people who cannot afford to pay their fuel bills this winter. Those are not the people who should be asked to pay for this bailout. If there is a bailout that has to be paid for, it should be the people, the segment of society that has benefited from Bush's economic and tax policies over the last 8 years.

 It is time to act and act fast.  I think his idea is echoing throughout Obama's speeches and those of others but it needs action and strong action at that.  This would be a good time to get others to read Sander's speech and to get other members of the Senate to join him in his efforts.  The time for action is now.  We can do it!

Originally posted to don mikulecky on Sun Sep 21, 2008 at 01:55 PM PDT.

Poll

Senator Sander's speech

16%9 votes
0%0 votes
3%2 votes
76%43 votes
3%2 votes
0%0 votes

| 56 votes | Vote | Results

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site