Why "We're on the Right Track" Isn't Enough, and What Obama's Plan Should Be for Boosting the Economy 19APR12

ROBERT Reich is spot on in this piece. mitt romney isn't offering anything but criticism but Pres Obama must do more to show the American electorate he, and a Democratic Congress can lead us out of the recession. I hope someone at the WH and the campaign HQ in Chicago is paying attention....
President Obama's electoral strategy can best be summed up as: "We're on the right track, my economic policies are working, we still have a long way to go but stick with me and you'll be fine."
That's not good enough. This recovery is too anemic, and the chance of an economic stall between now and Election Day far too high.
Even now, Mitt Romney's empty "I'll do it better" refrain is attracting as many voters as Obama's "we're on the right track." Each man is gathering 46 percent of voter support, according to the latest New York Times/CBS poll. Only 33 percent of the public thinks the economy is improving while 40 percent say they're still falling behind financially -- an 11 point increase from 2008. Nearly two-thirds are concerned about paying for housing, and one in five with mortgages say they're underwater.
If the economy stalls, Romney's empty promise will look even better. And I'd put the odds of a stall at 50-50. That puts the odds of a Romney presidency far too high for comfort. Need I remind you that Romney enthusiastically supports Paul Ryan's wildly regressive budget, and as president would be able to make at least one or possibly two Supreme Court appointments, and control the EPA and every other federal agency and department?
The Obama White House should face it: "We're on the right track" isn't sufficient. The president has to offer the nation a clear, bold strategy for boosting the economy. It should be the economic mandate for his second term.
It should consist of four points:
First, Obama should demand that the nation's banks modify mortgages of homeowners still struggling in the wake of Wall Street's housing bubble -- threatening that if the banks fail to do so he'll fight to resurrect the Glass-Steagall Act and break up Wall Street's biggest banks (as the Dallas Fed recently recommended).
Second, he should condemn oil speculators for keeping gas prices high -- demanding that the oil companies allow the Commodity Futures Trading Corporation to set limits on such speculation and instructing the Justice Department to investigate and prosecute oil price manipulation.
Third, he should stand ready to make further job-creating investments in the nation's crumbling infrastructure, and renew his call for an infrastructure bank. And while he understands the need to reduce the nation's long-term budget deficit, he won't allow austerity economics to take precedence over job creation. He'll veto budget cuts until unemployment is down to 5 percent.
Finally, he should make clear the underlying problem is widening inequality. With so much of the nation's disposable income and wealth going to the top, the vast middle class doesn't have the purchasing power it needs to fire up the economy. That's why the Buffett rule, setting a minimum tax rate for millionaires, is just a first step for ensuring that the gains from growth are widely shared.
The president can still say we're on the right track. But he should also say he's not content with the pace of the recovery and will do everything in his power to quicken it. And he should ask the American people for a mandate in his second term to make the economy work for everyone, not just those at the top.
Such a mandate can be put into effect only with a Congress that's committed to better jobs and wages for all Americans. He should remind voters that Congressional Republicans prevented him from doing all that was needed in the first term, and they must not be allowed to do so again.
Robert Reich, Chancellor's Professor of Public Policy at Berkeley and former
Secretary of Labor, is the author of "Beyond Outrage." His widely-read blog can be found at www.robertreich.org.
 http://www.huffingtonpost.com/robert-reich/obama-romney-economy_b_1438652.html?utm_source=Alert-blogger&utm_medium=email&utm_campaign=Email%2BNotifications

An Offer to the President 14DEZ11

I wish the gop and tea-baggers were offering a credible slate of candidates and had a serious front runner to challenge Pres Obama for the presidency. Unfortunately their primary choices are creeps or clowns, some both, and so Obama may not feel enough pressure to listen to the majority of Americans who want the rich to pay more in taxes on their income and capital gains, who want corporate tax loopholes closed, who want the government to be more involved in reviving the American economy and ending this recession. Yet the opposition's candidates may be more of a threat than Obama's campaign wants to admit because if the President doesn't heed the advise of people like Robert Reich in this article then enough good people may not vote to reelect him next November, or may cast protest votes for third party candidates or for the gop/teabagger candidate. The American people don't just need the President to commit to the principles and policies offered in this article if he is elected for a second term, we need concrete action on them starting now to prove he represents the entire nation and not just the 1%.

Mr. President, we heard what you said last week in Kansas -- about the dangers to our economy and democracy of the increasing concentration of income and wealth at the top.
We agree. And many of us are prepared to work our hearts out to get you reelected -- as long as you commit to doing what needs to be done in your second term:
-- Raise the tax rate on the rich to what it was before 1981. The top 1 percent has an almost unprecedented share of the nation's wealth and income yet the lowest tax rate in 30 years. Meanwhile, America faces colossal budget deficits that have already meant devastating cuts in education, infrastructure, and the safety nets we depend on. The rich must pay their fair share. Income in excess of $1 million should be taxed at 70 percent -- the same rate as before 1981.
-- Raise capital gains taxes to the same level. It's absurd that the 400 richest Americans -- whose wealth exceeds the wealth of the bottom 150 million Americans put together -- should pay an average 17 percent tax on their incomes, the rate day laborers and child-care workers pay. That's because so much of the income of the super-rich is considered capital gains, now taxed at only 15 percent. Close this loophole.
-- Tax financial transactions. A tiny tax on every financial deal would yield billions of dollars more. It would also slow speculators and reduce the wild gyrations of financial markets.
-- Use the bulk of this money to create good schools, give our kids access to a college education, and build a world-class infrastructure, so all our children have a chance to get ahead.
-- Resurrect the Glass-Steagall Act, that used to separate commercial from investment banking. It was put in place after the Great Crash of 1929 to prevent financiers from gambling with peoples' bank deposits. But it was repealed in 1999 -- and its repeal contributed to the Crash of 2008. Wall Street lobbyists have made sure the new Dodd-Frank law has enough loopholes to allow financiers to continue to gamble with other peoples' money. The only way to stop this is to bring Glass-Steagall back.
-- Cap the size of Wall Street's biggest banks and break up the biggest. They were too big to fail before the bailout. They're even bigger now. And because of their huge size they get preferential treatment from the Fed, giving them an even greater competitive advantage over smaller banks. Cap their size and break them up before we have to bail them out again.
-- Require the big banks that got bailed out to modify the mortgages of millions of Americans now under water, who owe more than their homes are worth. It's not their fault the banks created a housing bubble that burst, causing home values to plummet.
Mr. President, we know nothing good happens in Washington unless good people outside Washington are organized and mobilized to make it happen.
So here's the deal: We'll reelect you. We'll stand behind you. We'll give you a mandate to do all this -- and more -- in your second term.
As long as you stand behind us.
Deal?
Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.

Wall Street Is Still Out of Control -- Obama Should Call for Glass-Steagall and a Breakup of Big Banks 26OCT11

WELL written piece advocating bringing back Glass-Steagall and breaking up the big banks before they really destroy our economy and nation.
Next week President Obama travels to Wall Street where he'll demand -- in light of the Street's continuing antics since the bailout, as well as its role in watering-down the Volcker rule -- that the Glass-Steagall Act be resurrected and big banks be broken up.
I'm kidding. But it would be a smart move -- politically and economically.
Politically smart because Mitt Romney is almost sure to be the Republican nominee, and Romney is the poster child for the pump-and-dump mentality that's infected the financial industry and continues to jeopardize the American economy.
Romney was CEO of Bain & Company -- a private-equity fund that bought up companies, fired employees to save money and boost performance, and then resold the firms at a nice markups.
Romney also epitomizes the pump-and-dump culture of America's super rich. To take one example, he recently purchased a $3 million mansion in La Jolla, California (in addition to his other homes) that he's razing in order build a brand new one.
What better way for Obama to distinguish himself from Romney than to condemn Wall Street's antics since the bailout, and call for real reform?
Economically it would be smart for Obama to go after the Street right now because the Street's lobbying muscle has reduced the Dodd-Frank financial reform law to a pale reflection of its former self. Dodd-Frank is rife with so many loopholes and exemptions that the largest Wall Street banks -- larger by far then they were before the bailout -- are back to many of their old tricks.
It's impossible to know, for example, the exposure of the Street to European banks in danger of going under. To stay afloat, Europe's banks will be forced to sell mountains of assets - among them, derivatives originating on the Street -- and may have to renege on or delay some repayments on loans from Wall Street banks.
The Street says it's not worried because these assets are insured. But remember AIG? The fact Morgan Stanley and other big U.S. banks are taking a beating in the market suggests investors don't believe the Street. This itself proves financial reform hasn't gone far enough.
If you want more evidence, consider the fancy footwork by Bank of America in recent days. Hit by a credit downgrade last month, BofA just moved its riskiest derivatives from its Merrill Lynch unit to a retail subsidiary flush with insured deposits. That unit has a higher credit rating because the Federal Deposit Insurance Corporation (that is, you and me and other taxpayers) are backing the deposits. Result: BofA improves its bottom line at the expense of American taxpayers.
Wasn't this supposed to be illegal? Keeping risky assets away from insured deposits had been a key principle of U.S. regulation for decades before the repeal of Glass-Steagall.
The so-called "Volcker rule" was supposed to remedy that. But under pressure of Wall Street's lobbyists, the rule -- as officially proposed last week -- has morphed into almost 300 pages of regulatory mumbo-jumbo, riddled with exemptions and loopholes.
It would have been far simpler simply to ban proprietary trading from the jump. Why should banks ever be permitted to use peoples' bank deposits - insured by the federal government - to place risky bets on the banks' own behalf? Bring back Glass-Steagall.
True, Glass-Steagall wouldn't have prevented the fall of Lehman Brothers or the squeeze on other investment banks in 2007 and 2008. That's why it's also necessary to break up the big banks.
In the wake of the bailout, the biggest banks are bigger than ever. Twenty years ago the ten largest banks on the Street held 10 percent of America's total bank assets. Now they hold over 70 percent. And the biggest four have a larger market share than ever -- so large, in fact, they've almost surely been colluding. How else to explain their apparent coordination on charging debit card fees?
The banks aren't even fulfilling their fiduciary duties to investors. Last summer, after Groupon selected Goldman Sachs, Morgan Stanley, and Credit Suisse to underwrite its initial public offering, the trio valued it at a generous $30 billion. Subsequent accounting and disclosure problems showed this estimate to be absurdly high. Did the banks care? Not a wit. The higher the valuation, the fatter their fees.
Just last week Citigroup settled charges (without admitting or denying guilt) that it defrauded investors by selling them a package of mortgage-backed securities rife with mortgages it knew were likely to default, but didn't disclose the hazard. It then bet against the package for its own benefit -- earning fees of $34 million and net profits of at least $126 million. So what's Citi paying to settle this outrage? A mere $285 million. Its CEO at time (Charles Prince) doesn't pay a dime.
I doubt the president will be condemning the Street's antics, or calling for a resurrection of Glass-Steagall and a breakup of the biggest banks. Democrats are still too dependent on the Street's campaign money.
That's too bad. You don't have to be an occupier of Wall Street to conclude the Street is still out of control. And that's dangerous for all of us.

This Powerful Clip Is Exactly Why Everyone Should Support #OccupyWallStreet

A great video explaining how we got where we are today, and why we should support the Occupy Wall Street movement across the country.

ELIZABETH WARREN AND GOLIATH from SOJO 11FEB10

I had a most instructive conversation this week with Elizabeth Warren, the Harvard economist who is also the Chair of the TARP Congressional Oversight Panel. Warren has a way of cutting through the jargon and confusion of many economists and of this economic crisis -- right to the moral core of the issues at stake. I knew her for her keen insights, but I didn’t know she was from, as she puts it, a “mixed marriage from Oklahoma” -- Baptist and Methodist -- and that she is a former Methodist Sunday school teacher. In the interview I did with her for Sojourners, her moral and even theological comments were as impressive as her economic analysis of our present crisis. She said the battle for financial regulatory reform is like the battle between David and Goliath. (You can read the interview in the April issue of Sojourners magazine, which comes out in early March.)
Warren’s narrative of the U.S. economy, and the banking industry in particular, was very clarifying. For most of U.S. history, our country went through repeated periods of boom and bust, with all the consequences of those cycles. But after the Great Depression, a number of new financial regulations -- rules for the road -- were put into place that were designed to protect average Americans in particular from the continued abuses of the big banks and the often terrible results in bad times for ordinary people. Two important examples were the FDIC (Federal Deposit Insurance Corporation) to protect people’s savings and the Glass Steagall Act of 1933 to prevent banks from speculating with depositors' money. And the new rules worked for several decades, creating both prosperity and security for many American families and an emerging middle class. But starting in 1980, the rules were first watered down and gradually removed, and banks were free again to engage in both the abusive and very risky speculative behavior that helped to bring on the Great Depression, and resulted again in the current Great Recession.
She explained how credit card and mortgage application forms used to be only a page or two and were both clear and understandable to the average person -- even allowing people to easily compare and contrast the deals offered. But now, as all of us know, these forms have expanded to 30 pages or more with lots of complications, hard to comprehend provisions, and “fine print” that cleverly hides a long list or traps, tricks, and a myriad of both exploitive arrangements and outright abuses that greatly benefit banks at the expense of borrowers and card holders. In clear moral terms, Warren described the current behavior of our biggest banks as deliberately deceiving, entrapping, and cheating unsuspecting customers into very precarious and ultimately disastrous financial positions. And with no more rules of the road, the banks were leading their customers into the financial ditch. An economic crisis has been the result with massive suffering and pain for millions of Americans.
We are now living in a “lawless” economic environment, according to Warren, where our biggest banks have become our most dangerous predators -- and with no protections for the rest of us against the “law of the jungle,” as she puts it. The consequences for our economy, our culture, our families, and even our souls have been disastrous. This is not the way we should want to live, Warren says, and it is creating a world which we should not want our children to grow up in. She makes the urgent case for reform with the compelling analysis of a top economist, the family values of a grandmother, and the moral arguments of a person of faith. The sins of the financial world have become both a moral, and even religious, issue from the perspective of the Methodist tradition “which still shapes me.”
Warren is the “mother” of the idea for a new Consumer Financial Protection Agency (CFPA),which is in the current financial reform bill recently passed by the House of Representatives, and is now slowly making its way through the U.S. Senate. But the big banks are aggressively fighting back, trying to prevent their own regulation only one year after the financial meltdown for which they were in large part responsible. There seems to be no remorse, let alone repentance, from the big banks -- only record new profits enabled by their taxpayer-funded bailouts, and enormous bonuses to the executives who made the very decisions that brought the economic system down on the heads and hearts of so many Americans. The biggest banks in America are giving shame a bad name.
Why are new rules, regulations, and protections necessary? Because of the human condition, the realities of human nature, and a biblically orthodox understanding of human sinfulness. Yes, the reasons we need the protections offered by a Consumer Financial Protection Agency are as theological as economic. And it is amazing to me how many of those who oppose any regulation of Wall Street also claim to be religious conservatives. They subscribe to what I label in my new book, Rediscovering Values: On Wall Street, Main Street, and Your Street — A Moral Compass for the New Economy, “the myth of the sinless market.” I am a conservative Christian too, conservative enough to have a healthy appreciation for human sins, human failings, and fallen-ness, and after witnessing the behavior of America’s biggest banks during this economic crisis, an old theological term called human depravity. It is simply bad theology to trust large corporations not to pollute our waters, poison our air, or cheat their unsuspecting customers. They have to be prevented from doing so for the sake of the common good. Good financial and economic rules reflect, not only good economics, but also good theology. And the free market fundamentalism of Wall Street’s defenders is, among other things, bad theology.
But as Elizabeth Warren, a good Methodist, warns, the banks are trying everything they can think of to kill financial reform. And we must not let them do that. In the name of a fairer economy, of family values, of moral values, and of sound biblical theology, the faith community must now make itself heard on the urgent issue of financial regulatory reform. We must hold our biggest banks accountable to the common good. So let our Senators not just hear from the bankers, but now also from pastors who see what such abusive banking behavior has done to their families and parishioners, to devastated communities with shuttered houses, to the prison of debt that more Americans find themselves in. People of faith across the land must now tell their elected representatives that we will be “watching and praying” to see what they will do about necessary financial reform. We don’t have the money in our financial coffers that the banks do to finance their political campaigns, but we do have our voice and our votes which will be turned against them if they vote against the best interests of our people and for the greed of the bankers. Jesus said it well -- choose this day who you will serve, God or Mammon (Money). Let’s now put that choice to our Senators, who need to hear from us this next week while they are in their district offices during the Presidents' Day recess. Critical decisions are being made for or against critical financial reform right now.
Jim Wallis' interview with Elizabeth Warren will be featured in the April issue of Sojourners magazine