|
Or perhaps that should be "A Supramodest" proposal. In that what I'm suggesting is not small in any way, except insofar as it doesn't involve saving the bloated assets of the greedheads whose bacchanalian raid on the economy got us here.
My proposal is based on the following non-negotiable assumptions:
1. We do need a financial and credit infrastructure. Devolving back to a gold-based currency and/or a cash/barter basis economy is not a viable solution. There are billions of dollars in assets, including thousands of ordinary workers doing ordinary jobs, tied up in the existing troubled system. It will, in the long run, be cheaper to salvage those assets and base the new system on the existing system than it will be to let the current system fail altogether and attempt to re-invent it from the ground up.
2. John McCain is one hundred percent correct when he states (but ONLY when he states this) that the fundamental engine of our economy is our workers (read: LABOR) and that our workers are the world's most productive. In fact, I would say that socialistic pronouncement by the GOP candidate for President is correct, but incomplete. Capital, the inventory of resources such as cash and equipment and raw materials and operating space, etc., that enable the economy to function, is also a fundamental engine, and we need both. But the sheer size of the workforce and the families supported by American workers is the bulk of our GDP and thus, merits primary consideration in devising a solution to the current crisis.
Are we clear on those? Good. That said, here's the plan:
A. A massive infusion of cash into the FDIC's deposit insurance fund to protect public confidence in the safety of their checking accounts, savings accounts, CDs, etc., up to an increased amount of $250,000 per account. This will also keep our neighborhood banks solvent, at least to the extent of their deposits. Neighborhood banks will be at the nub of the crisis for many of us-- we need to know that the money we have in there will be available when we write our next mortgage check or rent check.
B. A rolling "bank holiday" that will close down every financial institution in the country for 24-72 hours (though not all at once) while their books are audited by agents of the new "Financial Institution Supervisory Agency (FISA-- how do you like that?) Their assets and status will be confirmed as "sound" (in which case they reopen and do business as usual, no change,) "threatened," (in which case they are placed under the direct supervision of FISA monitors who authorize remedies and require changes until the institution qualifies as "sound") or "unsound" (in which case their assets devolve to FISA which handles them based on #C, below.)
C. Unsound financial institutions have their remaining assets distributed FIRST to holders in these categories in this order: small depositors (under $250K,) institutional pension funds, government deposits, common stock holders, preferred stock holders, bond holders, and finally large depositors and everyone else. Their debts and liabilities devolve to FISA which holds them as taxpayer equity, publicly-owned property (nationalized) and either resecures them and manages them, or realizes them at the loss. Ultimately, they can be re-sold to private parties if a profit can be made.
D. A new code of financial regulations is developed that mandates accountability, transparency, federal oversight, and separation of transaction types to preclude conflicts of interest for all financial institutions.
E. The minimum wage rises on a graduated basis and becomes indexed to a new regionalized cost-of-living rate that is calculated based on real expenses for a family of three with one wage earner (that is, food, energy, etc., are included in the rate.) The existence of "exempt" employees is phased out and wage and hour rules apply to everyone and are rigidly enforced. Benefits are mandated to ALL workers on a pro-rata basis. No more exploiting white collar and pink collar grunts for fifty-hour weeks at base pay, or hiring legions of part-timers with no benefits. Companies will have to actually hire enough real workers to actually do the work, creating millions of new jobs.
F. A new category of business is created: "Infrastructure business." The category includes energy, health care, transportation, and other key functions in key sectors and qualifying companies will receive preferential subsidies, government contracts, and capital investment in return for taxpayer (nationalized) equity.
G. Incentives to the "infrastructure business" sector will be used to create new jobs, not unlike the old New Deal programs, targeted to areas and sectors hardest-hit by unemployment.
H. Bankruptcy laws and rules are restored to their 1979 status.
As you will notice, there is no place in this plan for the funding of current CEO and board member and executive compensation packages, buyout agreements, stock option or equity redemptions, etc.
I think this will bail out the economy nicely. It certainly needs lots of tinkering and fine-tuning by economists and experts, but the outline should remain substantially the same.
I'm off to tilt at some windmills and scream into a howling gale now.
cynically,
Bright
|
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
