Les Leopold posted a
great piece on Alternet.org on Friday afternoon, entitled: "
Where's the Progressive Agenda for the Great Recession?"
Where's the Progressive Agenda for the Great Recession?
Posted by Les Leopold,
AlterNet on September 25, 2009 at 1:48 PM.
One major difference between the Great Depression and the Great Recession is the death of a visionary progressive movement. Yes, the Republicans and the media like to call liberal Democrats "Left," but that just means they are slightly more moderate than Attila the Hun.
Les Leopold continued...
Many in the 1930s believed that capitalism needed a major overhaul. From there it got vague and contentious...
--SNIP--
In general, the consensus view was that capitalism had run amok. Wall Street and the failing banking system were under fire. Serious change was in the air and progressives provided the agenda: unionization, public enterprises like the Tennessee Valley Authority, social security, minimum wage and overtime laws, public housing, controls on banking, public employment projects like the Works Progress Administration and the Civilian Conservation Corps. In addition there were experiments in alleviating debilitating competition, controlling prices and overproduction, soil conservation and a host of others, many of which failed.
--SNIP--
...After all, 29 million are unemployed or underemployed and we have poured about $13 trillion in cash and asset guarantees into Wall Street. Only a few months ago, we were all aghast at the incredible casino that was Wall Street. We couldn't believe that billions poured into junk fantasy finance instruments that got AAA ratings. We were really going to do something about those astronomical compensation packages. Our outrage knew no bounds but had no focus, no organization. We were, and maybe still are deeply angered, but we do so in private.
At this point in Leopold's tome, I'd like to add a little bit about what actually happened. You see, unlike the 1930's, and as we've been told by others--outright by Senators Durbin and Sanders, and Congressman Collin Peterson--the status quo (a/k/a Wall Street) basically owns the legislative branch of our government. I wrote about this last night in: "Sanders Echoes Durbin, Peterson 'Big $ Controls Agenda.'"
It's a matter of fact, at least in four major instances over the past few months through today, big business has stepped in and either actually written the very legislation which is now the subject of debate on Capitol Hill, or they've preempted (or attempted to preempt) significant regulatory change by their actions on a unilateral basis (i.e.: lobbying congress to adapt the status quo's ready-made "solution" to the problem) as I also mentioned it in my diary last night and on at least two other occasions:
1.) Bernie Madoff case: unethical lawyering vis-a-vis blatant use of the revolving door, bringing white shoe lawyers into the mix that had previously held critical positions at the Securities and Exchange Commission;
2.) Max Baucus' draft of current healthcare reform legislation: Wellpoint basically wrote the draft;
3.) AIG bailout: Lloyd Blankfein, CEO of Goldman Sachs, with no business even being in the rooom, participating in the decision-making in Washington D.C., with regard to the bailout of AIG;
...and now the latest travesty...
4.) Economic regulatory reform: with our government opting to default to a trade organization's "solution" (efforts already underway by "The CDS Dealers Consortium," a group of leading Wall Street credit default swaps-trading firms, including Citigroup, JP Morgan Chase, Goldman Sachs and others), which accomplishes practically nothing, in terms of improving matters with regard to enabling transparency and resultant improvements in monitoring of the derivatives marketplace, the very sector that got this country into the economic mess it's in now.
Leopold continues...
The banks that were too big to fail have actually gotten bigger. No one is even talking about regulating specialty derivatives that were so instrumental in the crash. The consumer financial protection agency is getting watered down by bank lobbyists funded indirectly by our bailout.
--SNIP--
Still no progressive movement. Still no national agenda for reforms. Still no compelling vision for what needs to be changed. Still no collective action to build our sense of empowerment.
Leopold tells us of two fundamental changes that must be at the forefront, guiding the Progressive agenda now:
1. We must move money from the top of the income ladder to the middle and the bottom. This crisis was the result of near-sighted, selfish tax "reforms" that encouraged money to accumulate in the hands of the top fraction of one percent. Those folks literally ran out of real world investment opportunities that satisfied their demands for high returns, so they poured their excess capital into the fantasy finance casino. We have the worst income distribution since 1929 - no coincidence, I would argue. When money is more fairly distributed we will dry up much of the demand for fantasy finance.
2. We must also move money from the financial sector into the real economy. Wall Street is too large, too bloated with excess and therefore much too eager to play croupier with other peoples' money. Before the crash it accounted for more than 20 percent of corporate profits. Wall Street's cheerleaders said we could have a prosperous economy that moved money around rather than produced tangible goods and services. We can't.
You move money away from the super rich and away from Wall Street and you will put an enormous damper on fantasy finance. All the proposed rules and regs, and new agencies, and modified pay schemes have little meaning if we fail to move money away from the casino and the super-rich who play there.
And, it is here where I'd like to break-in to Leopold's thinking to add another concept: we must ignore the calls of those who attempt to compare our current financial/economic crisis to crisis' past. Apart from what occurred in the Great Depression, we've really never had to deal with anything like what we're dealing with now.
By definition, if one reacts in response to those that attempt to explain away our current situation as compared to recessions in 2000-2001, 1990-1992, 1981 and every other recession going back to the the 1940's, we are--by definition--saying that what's happening now is not unusual.
We are then, effectively, saying that the fact that we're earning less than we were in 1999 is not an exceptionally dire situation. Folks, we have just been through "A Decade With No Income Gain."
We are then, effectively, saying that the fact that there are fewer jobs now than there were in 1999, is nothing to take note of, today. (See: "Lost Decade for Job Growth.")
We are then, effectively, saying that the recessions of 1991-1992 and 2000-2001 were not bubbles bursting but merely just other, run-of-the-mill recessions, when nothing could be farther from the truth!
We are--STILL, AND VERY MUCH--in the biggest economic downturn this country's witnessed since the Great Depression. Trivializing this, by downplaying extremely harsh statistics that are indicative of the suffering of scores of millions of Americans, today, is, IMHO, one of the most anti-Progressive practices of all!
Yes, it is a "A Recovery In Name Only."
When it comes to unemployment, housing, commercial real estate, foreclosures, the manufacturing sector, consumer spending, and a myriad of other measures of our economy, some in this community sit here, day after day, REC'ING diaries of those that make hay of trivial and/or inconsequential moves in indicators that are STILL far lower (after their noted "improvements" within this or that diary) than anything recorded in many generations and/or decades!
Just take a look at the JOBS NUMBERS from our own government, for goodness' sake. We're told how much better "new claims for unemployment" are than they were a few months ago, and as of the beginning of this month, we're still at a mark that's 50%-100% worse than we were at the height of the past two recessions/bubble-bursts.
1.5 million people will lose their unemployment benefits between now and year-end, alone, if Congress doesn't pass legislation to extend benefits over the next few days. But, even with the extension of benefits for at least some of this group, those that have used up their unemployment insurance "are breaking records, in terms of sheer numbers, too."
(NOTE: Readers may manipulate the charts provided in the link, in the second paragraph above this sentence to make year-over-year comparisons that verify that we've never witnessed this many folks losing their unemployment benefits than we are right now. And, that number's growing, not getting smaller.)
HOUSING and FORECLOSURES are nowhere near done as far as tanking's concerned. How is that? There are 7,000,000 homes that are set to go into foreclosure that are in our financial sector's "shadow inventory." The banks are withholding them from actual foreclosure, because our absurdly depressed housing market couldn't withstand the havoc that much downward-price pressure, created by that much additional inventory, would have on the housing market. (See: "Housing Crash to Resume on 7 Million Foreclosures, Amherst Says.") Even with the current administration's $8,000, first-time-homebuyer credit, we're seeing headlines such as this: "U.S. Economy: Sales of Existing Homes Unexpectedly Decline." So, what's going to happen as demand diminishes, which is already happening before our very eyes?
As far as MANUFACTURING'S concerned--what's left of it in this country, which isn't much--that's quite problematic, too. (See: "U.S. Aug. durable-goods orders tumble 2.4%." We're told, on the one hand, that trucking traffic is up, very modestly, over the past month. But, what's not being publicized is that freight train traffic is dropping, and getting progressively worse, not better: "Railroad Traffic Decline Accelerates (Withering Green Shoot Watch)."
I could continue on, at length, about other negative statistics and stories that I'm reading that tell us that COMMERCIAL REAL ESTATE is a tempest in a teapot. And, that it may very well, still, cause THE DEMISE OF ANOTHER MAJOR PLAYER IN OUR BANKING SECTOR, but, I won't.
I could talk about how it's now becoming clearer, by the day, that our government has been propping up our STOCK MARKETS, and perhaps even the price of GOLD, but, I won't.
Job creation, housing and manufacturing--with projected unemployment rates being at or over eight percent for up to three or four years, and with over 7,000,000 properties set to go into foreclosure in coming months comprising the "shadow inventories" currently being withheld by the banking sector, today, and with manufacturing also being many years away from resuscitation as I write this--were the traditional means by which we've rebounded from downturns in our economy over the past. Today, there is no "quick fix" to getting us back to normal. So, the powers that be talk of the "new normal," which is double-speak for the reality that things are going to be bad for a very, very long time.
So, here's what Les Leopold tells us we should do, via a new Progressive Agenda:
A Tobin tax on speculative financial transactions
Wage caps on financial salaries
A real progressive income tax like we had during the Eisenhower years where those with adjustable gross incomes over1 million would see their top dollars taxed at 90 percent
A significant rise in the minimum wage which must be indexed to inflation
Enhanced unionization to place more upward pressure on wages
Border adjustment taxes to level the global playing field on trade involving goods produced by child labor and under poor environmental conditions
Direct investment in alternative energy development
A new WPA for the unemployed
A new Glass-Steagall Act plus anti-trust measures to break up large institutions so that they are small enough to fail
And, I'll leave you with Leopold's last thoughts as we enter into a new week...and, I really hope you'll think twice next time you hear all of those encouraging words about how things are "returning to normal," when the last thing we want to do is go back "there..."
Maybe the Great Recession isn't bad enough to generate a focused agenda and a new progressive movement. Maybe I'm completely off base and the stock market will go ever upward and, mirabile dictu, what's good for Wall Street will turn out to be good for Main Street with true full employment. But if the fundamental causes of our mess really are the mal-distribution of income combined with a bloated financial sector, then you can take it to the bank that we'll be bailing out the super-rich again in the near future, while millions go without work.
Peace!