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August 24, 2017


One of the many problems in attempting to tame the financial sector is that this sector is unlike pollution control, for instance, where community support can be easily garnered. You can see the effects of a busted oil line on community creeks, lakes and rivers, and you can also see the effects of worn out lead pipes on drinking water that is rendered undrinkable. (See Flint.) What the financial sector is doing to the American people is much less visible and shrouded in the mysteries of esoteric instruments and complicated bookkeeping, but it is nonetheless a clear and present danger to the economic health of America and Americans and, as such, is deserving of public regulation and control. We rightly regulate the transportation of highly inflammatory and caustic materials on our barges, ships, highways, railways and other forms of transport, and as we have seen during The Great Depression and Bush’s Great Recession, the financial sector can be caustic to our economy unless publicly regulated.

We have had attempts to rein in the financial sector before, and with mixed results. It seems that both political parties have backed off any such clearly needed reforms as demonstrated with Clinton’s repeal of the Glass-Steagall Act and Bush’s first-ever wartime massive tax cut to the rich and corporate class and their financier bedfellows. In other words, we decided to make the rich richer and the poor poorer, even during war, and since the poor and middle class were stuck with the bill in the form of higher deficits they must pay (since the rich and corporate class and their financiers pay less), a double whammy, I think such a decision by any party or parties is an insult to democracy and nothing more than corporate welfare, as was Bush’s signature on a bill forbidding Medicare from bargaining with Big Pharma, another immense giveaway that costs you and me billions each year. Thanks, George, and though we couldn’t afford it, so what? Just put it on the bill, as you did with your credit card war, and then blame the increased national debt occasioned by such perfidies on Democrats. What!

In 1978, Professor James Tobin delivered an address in which he proposed a tax on the sale of stock, a tax that has come to be known as the Tobin Tax. It went nowhere, and those who buy and sell stock still have no tax on such exchange, though it seems to work well in other countries. I thought the tax was justified, especially if we started at a low rate of say, two-tenths of a percent. It was not only a matter of providing revenue to the government but also a means of stabilizing the market by bringing “day traders” and other “in and out of the market” traders to heel, traders who make frequent transactions at the push of a computer key to take advantage of minute changes in stock values per the Dow.

After all, I reasoned, you and I are required to pay a state sales tax in virtually all state jurisdictions on items we buy, and at rates far in excess of two-tenths of one percent, so why are these buyers and sellers in such sales and exchanges of equities exempted from the sort of regressive taxes the rest of us must pay? Oh, campaign contributions? Nah, who would stoop so low, and why would politicians who constantly complain about the debt and current account deficit vote against a program that would reduce both? Let’s get real. How long will we tolerate this legalized predation the rich and corporate class and their financiers collect from the public till due to bought congressional action or inaction? Are we, the 99 percent, mere ATM machines for the superrich in this rigged system?  Is the pope a Catholic?

I thought we were “all in this together,” and I suppose we are as a practical matter, but we are not all being treated equally since the rich and corporate class and their financiers are not paying full fare for their ride in this economy but are rather paying the piper via the euphemistic phrase “campaign contributions” to keep it that way. Solution? Public financing of all campaigns for federal office. We don’t interfere with the businesses of the Kochs and Mercers and their ilk to any substantial degree, and they should be prevented from interfering with ours. Who elected them?

Too costly? Wrong. Such a system would be far cheaper and more democratic than the present system where money and not the will of the people is the deciding factor in elections, helped immensely by the decision in Citizens United, which opened the floodgates for unlimited corporate “campaign contributions” to selected candidates (those who will keep the good times rolling). Citizens United will not be reversed soon due to the composition of the Supreme Court, but a public financing act would reverse some of the harsh results of such a finding and give meaning to our claim to be a democracy, that is, a government of, by and for the people as envisioned by Lincoln rather than a government of, by and for the Kochs, Mercers and others who have little concern for government and a lot for profit.

Where in the Constitution does it say that special interests shall be in charge of elections and government and, to reiterate, what about Lincoln’s Gettysburg Address citing “that government of the people, by the people and for the people?” How can “the people” be effectively excluded from elections and governing in what is pretended to be a “democracy” where the right to rule is ostensibly based on the will of the people and not that of a selected few? Can you spell illusion?

It seems to me that such libertarian instincts are antithetical to the idea of democracy and that We the People must put an end to such invasions of the public commons by private interests through legislation and vigorous resistance to those who for the sake of profit in their operations would destroy American democracy. History tells us that with the repeal of Glass-Steagall and various other measures adopted since that we have largely eliminated the protections and safeguards imposed by legislation dating back to the New Deal and the Bretton Woods Conference and have given Wall Street and its financiers license to roam the globe not to further American neoliberal reforms but to make money, funded in part by FDIC-insured funds and the implicit promise of another bailout should such investments go sour (as they did about ten years ago with a hair-raising Bush recession that left our economy in shambles).

I agree with Hahnel that those of us who are working for reform should judge how such proposals for reform will affect efficiency and stability in the real economy where goods and services are provided and not just their effect on the financial sector, whose interests now enjoy priority. We should ask if such proposals will increase wealth and wage inequality, whether such proposals will give ordinary people more or less control over their economic and political destinies, and whether such proposals are generally in accord with expansion rather than contraction of our democratic institutions.

Can’t be done? That’s what the pro-English Tories told revolutionary Americans in their ultimately successful attempt to overthrow the yoke of King George. King George is long since dead, but with Putin working on our democracy from the outside and the likes of the Kochs and Mercers working on our democracy from the inside, we have our work cut out for us. As Supreme Court Justice Louis J. Brandeis noted in 1927, “We can have great concentrations of wealth in the hands of the few or we can have democracy, but we cannot have both.”

We will need to test that idea against today’s realities. I for one come down on the side of democracy and against those who would destroy it since, as I often note, democracy is our most important asset held in common and is one of the last few things left worth dying for.        GERALD        E

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