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                                        The Bailout Blues and Gut Check Soul Revue

                                                                    An Earth Manifesto publication by Dr. Tiffany B. Twain

                                                                                         October 16, 2008

Preamble:  Music Plays in the Background

Lead Vocalist, harmonizing:  “Hey, Jude, don’t let me down, let’s take a sad song and make it better.  All together now:  Imagine!”

Tenor Saxophone, with fanfare:  “I have a particular worldview I’d like to articulate.  You know what I mean?”

Bass, strumming:  “Ah, idealism!  Ah, philosophy!  Sing the Blues, Baby!”

Drummer, after a drum roll:  “The first thing is, if we want peaceful societies, we need to make them fairer, and more just.  Oh say, do you see the Golden Rule by the dawn’s early light?”

Trumpet, trumpeting:  “Holy cow -- that’s practically biblical!  Give me a break!! 

Alto Sax, soliloquizing:  “We’re sure leading a cartoon existence.”

Cymbals, clashing (what hell kind of Blues Band is this?):  “Que pasa, silver-tongued siren?”

Piano, after a virtuoso instrumental riff:  “Sister Tiffany comes to me, speaking words of wisdom, let it be.  She tells us to change what we must, and not just let it be … let it be … let it be.”

Blues Keyboard, trilling: “One pill makes you larger, and one pill makes you small, and the one that mother gives you, doesn’t have enough logic and proportion to address the causes of your symptoms in any desirable way at all.  Don’t just feed your head!”

Lead Guitar, wailing:  “I can’t get no satisfaction, my guitar weeps for thee and me.”

   music_note Every form of refuge has its price. music_note

Harmonica, soulfully epiphanizing:  “Here comes the sun!”

The Bailout Blues

As this odd song plays in the background, historic developments envelop us.  Ideological beliefs, fervently held, are crashing up against reality, and splintering asunder.  Government interventions in the marketplace are coming to the rescue of a shaky global financial system in a desperate attempt to ease a severe credit crunch, and to save global stock markets from plummeting too far, and to rescue the economy from a deepening recession.  The federal government has nationalized mortgage giants Freddie Mac and Fannie Mae and bailed out the enormous insurance guarantor AIG.  It has let Lehman Brothers go bankrupt, and helped facilitate ‘fire sales’ of giant banks and investment institutions including Bear Stearns, Merrill Lynch, Wachovia and Washington Mutual.  Whoo Hoo!

But the rough ride is only just beginning.  Boldly well-considered action is required.  Our representatives have hurried to enact an emergency rescue plan put forth by the Bush administration’s Treasury Department that has already been extensively amended by Congressional leaders.  It comes in the form of an unprecedented $700 billion Bailout Plan that initially blew up in the House of Representatives on September 29 at the hands of a curious coalition of free market conservatives and fairness-minded liberals.  Numerous issues were in play.  Many people are extremely concerned about government bailouts because they place the burden of costs and risks on taxpayers, not on those who were responsible for getting us into this tricky state of affairs -- and not on those who were the main beneficiaries of the inflation of the bubble.  This action veritably exemplifies what Naomi Klein calls “the Shock Doctrine”. 

The Bailout plan revolves around the idea that risky mortgage-backed securities and other ‘troubled assets’ will be bought by the government from banks.  The hope is that this will have the effect of ‘recapitalizing’ banks, and allow them to begin making more loans and thereby mitigate the terrible risks to the economy associated with hard-to-get credit and a sudden widespread aversion to risk.  This crisis-engendered legislation has proved flexible enough, and the emergency so severe, that the Treasury Department has decided to use the first $250 billion to inject capital directly into banks, taking a government equity position in them, and gaining a better multiplier effect on credit availability than would be effected by merely buying up a bunch of toxic debt.

The public was rightly suspicious and did not trust the original plan because it put taxpayers on the hook for the huge cost.  They seem to intuitively understand that the devil is in the details, and that there will be far too little accountability of the insider ‘deciders’ who will do the buying of bad assets.  There are obvious conflicts of interest that will arise in determining what price should be paid for the ‘toxic debt’.  The higher the price paid, the better for the banking system and the worse the deal for taxpayers.

Many people have “fooled around and fell in love”.  At first, such people generally love a person for who they are.  Then pretty soon they find themselves trying to change the one they love!  This Bailout Plan was certainly not love at first sight for anyone, but the politicians did their usual job of tweaking it with enough bells and whistles, and a minimal amount of sensible controls, plus $150 billion in pet projects, and everyone figured that we are in a desperate panic situation, so both houses of Congress finally passed the bill.  All of a sudden we’ve been taken advantage of, we’ve been forced into a shotgun marriage, and we have little chance to be able to abort this desperate plan. 

The old Chinese blessing and curse says:  “May you live in interesting times.”  Lucky us:  these are downright and doggone fascinating times.  I have a wild theory that, in this democracy of ours, it is possible to positively promote the public good, and not just the good of the few.  We have taken a costly step to reassure markets, and greased the wheels to prevent a credit collapse from destroying the global economy.  We have seen the Federal Reserve cut interest rates, and gone a bit further down the road to where the economic situation will correct itself and turn-around, so now is the time to assess how we can CHANGE our system to be consistent with better plans and ideas, and make it more sensible and fair and GREEN and stable and sustainable.  A crisis provides us with a good opportunity to make bold changes, and it would be best to make favorable changes rather than boldly anti-populist ones!

Better Plans

The economic crisis is spreading its contagion from financial markets to the real Main Street economy.  Financier George Soros succinctly summarized the real problem:  credit is frozen and banks suddenly have gone from being too eager to make risky loans to being highly risk-averse.  Soros opposed having the government buy troubled assets.  He pointed out, weeks before the Treasury Department came around to the same conclusion, that it is much more effective to recapitalize the banking system by injected funds “at the equity level” rather than “at the balance sheet level”.  Such actions, says Soros, provide more than twelve times the lending impact, so an investment of $700 billion by the government would yield $8.4 trillion to re-ignite the flow of credit.  “In practice, the effect would be even greater because the injection of government funds would also attract private capital.  The result would be more economic recovery and the chance for taxpayers to profit from the recovery.”  This is a better idea!

The current bailout plan is seriously flawed because it fails to comprehensively address underlying causes.  It does not focus on the most effective ways of recapitalizing banks, and it does not help people who face foreclosure on their homes.  It does not include adequate regulation or oversight.  It does not restore good banking protections that were contained in the well-designed 1933 Glass-Steagall Act, which was repealed in 1999.  Nor does it modify the most disastrous provisions of the Commodity Futures Modernization Act of 2000, which served to get us into this sad state of affairs in the first place.

Franklin D. Roosevelt, struggling to handle the challenges of the Great Depression, said this:  “It is common sense to take a method and try it.  If it fails, admit it frankly and try another.  But above all, try something.  He also said, “In our seeking for economic and political progress, we all go up -- or else we all go down.”  In these two twin sentiments lie the essence of a better plan.

A crisis like this helps to stimulate discussions and clarify problems, and thus to reveal potential solutions that are better designed.  The Bailout Blowup had a silver lining because it gave us a short window of opportunity to focus our attention on improving the emergency plan.  A clear alternative remedy now presents itself, one that was politically infeasible a month ago, but will be provocatively possible in the near future.  We should tap into the giant pool of wealth that our national policies have been so constantly focused on creating in the past eight years.  The cost of the Bailout Plan could be almost financed in full by levying a wealth surcharge of 5% on those who have a net worth of more than $10 million.  Or we could create a new higher tax bracket, retroactive to January 1, 2008, on all individual earnings above $500,000 per year and on capital gains in excess of $5 million.  If a change in taxation like this were made, a great amount of money would become available to finance the unfreezing of credit and to increase liquidity in our financial system and to bail out banks or other corporations that would otherwise fail.  Some innovative deal could be formulated to appease the rich for this appropriation, even possibly making it a sound investment for them.

Those invested in the stock market have lost 5% in a single day on a number of occasions due to the spreading fear that neither business nor government leaders are able to adequately solve the challenges facing us.  The funds raised by a levy on the wealthy could be used to create an enterprise like FDR’s Reconstruction Finance Corporation that would take a real equity stake in failed corporations.  Investors might even be willing to buy into it, which would provide more capital.  A small tax on every financial trade should also be implemented to contribute to covering the cost of recapitalizing Wall Street and supporting the Finance Corporation. 

We should implement a bottom-up plan to help homeowners who face foreclosure by empowering bankruptcy court judges to force renegotiations of mortgage terms.  The outcome of such an initiative could be very positive for the overall economy.  We should not overlook the need to boldly reassure municipal bond markets and find ways to make credit available to them at lower rates so that states and counties and cities and towns are able to finance crucially important voter-approved bond measures that address vital local needs.

Such plans would be fair to Main Street as well as Wall Street, and they would not involve rewards to those who took ‘moral hazard’ risks and bet badly.  The declines in global stock markets in the past month alone would have been plenty to finance a robust curative solution (the U.S. stock market hit multi-year lows on October 10, 2008).  Equity values will likely strongly and sustainably recover once a smart plan is instituted.  Investor confidence will increase when it appears that we actually have leaders at the helm who are creative, intelligent, far-sighted, fair-minded and courageous.

Overarching Principles

While we are taking steps to solve this crisis, it would be wise to adopt a progressive set of overarching principles that recognize the necessity for us to implement a revolutionary ‘green recovery’.  The underlying goals should be:  (1) to wean ourselves from our dangerous dependence on oil;  (2) to reward energy-savings in homes and fuel-efficiency in vehicles; (3) to create attractive incentives that reverse trends toward suburban sprawl and the construction of giant McMansions; (4) to invest in public schools and our national infrastructure; (5) to protect the Earth’s ecological health and its ability to provide us with vital ecosystem services;  (6) to reduce greenhouse gas emissions that are altering global weather patterns and the climate; and (7) to cut back on our military spending and wars and occupations of other countries.

Let the Big Picture Inform Our Actions:  “The Bet Situation”

We are in this harmful and dangerous economic crisis because we have collectively bet badly.  Our nation bet that the best way for us to prosper is by accepting unfettered competition and exploitive imperialism enforced by domineering militarism.  A better bet would have been to create a sound economy based on fairness, sensibly regulated markets and an overarching commitment to peaceful coexistence.  We have chosen leaders who bet perversely that a society that panders to wealthy people and big corporations is the best way to organize our economy. 

A better bet would have been to adhere to more egalitarian ideas that invest in the well-being of the middle class and do not abandon the poor.  We have bet that short-term expediencies are acceptable, allowing the government to become wasteful, bureaucratic and domineering, and allowing Big Business to promote a hyper-stimulus of materialistic consumerism, deficit spending, a huge national debt, the creation of unsustainable asset bubbles, and profligacy like that of a drunken sailor.  A better bet would have been to respect precautionary economic principles and to honor progressive understandings and initiatives like those listed in the One Dozen Big Initiatives to Positively Transform Our Societies (see Part Four of the Earth Manifesto online).

A seventeenth Century French scientist named Blaise Pascal formulated ideas that came to be known as the “Bet Situation”.  The Bet Situation is concerned with philosophical debates that have profound practical implications regarding probabilities and the future.  We are all confronted with the Bet Situation in our lives because (1) there are uncertainties, and (2) we are inextricably involved in the game.  We essentially gamble every time we choose one course of action over another.  Both actions and inactions are choices.  We make choices whether or not we are consciously aware of them.  It is crucial for us, as well as for our descendants, that we make better-informed decisions about the best courses of action. 

Common sense tells us that we should put our wagers on the best outcomes and bet with the best probabilities.  A summary of the 14 principal gambles that we are collectively making is explored in Chapter #38 of Comprehensive Global Perspective – An Illuminating Worldview.  Six of these gambles are highly relevant to this rambling Blues Introspection discussion:

(1)  We can gamble that laissez-faire capitalism and stimulated growth and an endless increase in consumption are the best for the robustness and health of the economy and our societies.  Or we can bet that to achieve a fair and sustainable future, we must redesign our economies and use smart policies and sensible regulations that safeguard our economy and reduce speculative excesses as well as waste and profligate consumption. 

(2)  We can continue to gamble that the distorted market doctrine of sink-or-swim Crony Capitalism is the best economic system, and defend and protect it, allowing Big Business to prosper at the expense of small businesses and the environment and society as a whole.  Or we can bet that a wise transformation to Green Capitalism must be facilitated, and begin to enact bold and intelligent initiatives that channel our collective activities into more wholesome directions that help create better societies and a more secure world for ourselves and our children. 

(3)  We can gamble that inegalitarian injustices and domestic policies that facilitate the concentration of wealth in the hands of a few are not a threat to social stability and the general well-being.  Or we can bet that the safest and wisest investments of all are in social justice, affordable universal education, equality of opportunity, resource conservation and peaceful coexistence -- and act accordingly. 

(4)  We can gamble that enabling the rich to become richer, while the middle class slowly falls behind and the poor become poorer, will not result in more intense social tensions, heightened insecurity, more powerful frustrations, worse crime, terrorist impulses, or an increased impetus for revolution.  Or we can bet that encouraging more pronounced inequalities and bigger disparities of wealth might have such consequences, and thus strive to enact fairer and more farsighted and more humanitarian policies. 

(5)  We can continue to gamble that aggressive militarism is the best way to achieve our economic goals and national security.  Or we can bet that aggression and preemptive war policies are prohibitively costly and that it is wiser to recognize that justice and peace are vitally important in the world, and therefore dedicate more of our resources to improving our own society and achieving greater mutual security through diplomatic conflict resolution and the commitment to broader social justice. 

(6)  We can gamble that the “Strict Father” constellation of beliefs are best, and defend the status quo by following the regressive and power-abusing doctrines of Neoconservatism and patriarchal dominion.  Or we can bet that a renewed respect for the constellation of “Nurturing Mother” values would create better balanced public policies, and therefore choose to elect leaders whose philosophies and policies honor these more progressive principles.

As alert readers may easily surmise, my perspective is that the best bet we can make is to support far-sighted progressive ideas that take into account the whole comprehensive breadth and depth of human knowledge, expert understandings, scientific insights and spiritually enlightened ‘truths’.  To ensure that we make smarter gambles that are fairer, more reasonable and more likely sustainable, we need to undertake adaptive and broad-minded initiatives.

Insights into the Treacherous Nature of Fraudulent Activities

Throughout history it can be seen that stimulated speculation and inadequate regulation lead to volatile markets, economic bubbles, and harmful collapses, and that they are generally accompanied by fraud and corruption.  Jonathan Swift, in his popular classic satire Gulliver’s Travels, provided a compelling perspective of fraud:

"The Lilliputians look upon fraud as a greater crime than theft, and therefore seldom fail to punish it with death (yikes!);  for they allege that care and vigilance, with a very common understanding, may preserve a man's goods from thieves;  but honesty has no fence against superior cunning: and since it is necessary that there should be a perpetual intercourse of buying and selling, and dealing upon credit, where fraud is permitted or connived at, or hath no Law to punish it, the honest dealer is always undone and the knave gets the advantage." 

It should be an overarching goal of our national economic policies to prevent fraud and opportunities for wide-scale corruption.  We should seek to achieve the greater good by adhering to precautionary legislative principles that prevent insiders from devising ever-more clever ways of facilitating overly-risky speculation and fraud.

Commentary on Phil Gramm, Deregulation, Derivatives and Infamy

It is high time that we find sound and fair economic solutions to the credit crunch and the de-leveraging that is taking place in international markets.  In addition to finding ways to stabilize the housing market and to unfreeze credit, we also need to save the titanic market in “derivatives” from implosion.  Derivatives are basically  financial instruments that help facilitate trade and business activities by spreading risk, so they are critical to the smooth functioning of capital flows and other economic activities.

Former Senator “nation of whiners” Phil Gramm and his anti-regulation laissez-faire market fundamentalist friends are responsible for having helped enact laws to deregulate the banking system and “modernize” the market in derivatives and futures contracts and commodities trading.  In doing so, they violated lessons learned in the Depression of the 1930s by eliminating sensible regulations and oversight of financial activities and banking conglomerates and. 

Financial derivatives include “credit default swaps”, which are used as a form of insurance against bad loans.  The market for these arcane instruments reportedly exceeds $50 trillion, or 5 times as much as our entire annual gross domestic product.  In 2003, Warren Buffett famously called such derivatives "financial weapons of mass destruction."  We cannot ignore these risks, and should not let them go unregulated any longer, for they may pose an even greater risk to the stability of the economy than the mortgage-backed securities that have plummeted in value as the housing bubble burst. 

The dominant laissez-faire capitalist worldview proclaims that it would be anathema to force people who could easily afford to help pay for the bailout to actually be the ones required to do so.  This is why the Bailout Plan uses debt financed by American taxpayers to put the cost and risk on Main Street rather than on rich people and Wall Street investors.  Powerful wealthy people dislike having to pay taxes, and this is why they have used the power of their money to get politicians elected who espouse principled-sounding but deceitful ideas like the Trickle Down theory and the Supply Side theory that effectively cause wealth to gush up to those who are already wealthy. 

The Bailout Blowup came at a critical moment in this severe global credit crisis.  Our leaders played a fascinating and invigorating game of Russian roulette with fragile financial markets.  The House blowup gave us an opportunity to debate options for a few more days, and our representatives could have chosen to solve the credit crisis in a more responsible and fairer way.  Still, our political system is set up so that it always does the expedient thing, and not necessarily the smart thing, so we squandered the opportunity and just added more pork and tax cuts and perks instead of smart changes to the Bailout.

Dire urgency was used to get this bill passed, and no doubt SOMETHING needed to be done, and soon.  The rejection of the bailout plan came as a nasty surprise that resulted in a record 778 point drop in the Dow Jones average, the largest point drop in history.  The House legislative action came as an almost incidental rebuff to one of the favorite scams of the illicit and incestuous marriage between corporations and government by temporarily rejecting one of the most blatant of profiteering gimmicks of them all:  the tactic of socializing costs and risks while allowing profits and benefits to remain privatized. 

The Bailout Blowup was a result not only of ideological opposition but also of intensely partisan political posturing during this election season.  The Bailout Bill is the effort of bought-and-paid-for politicians and ‘smartest guys in the room’ insiders and market manipulators and economic shock-doctrine opportunists.  The proposal ran into two primary buzz saws:  (1) an emotional hijacking of sharp partisanship, with Republicans angry at a speech by House Speaker Nancy Pelosi about the culpability of the Bush Administration in helping cause this crisis, and (2) deep skepticism of the bailout plan because of strong public opposition to its sketchy and costly provisions.  The plan was seen as giving the Treasury Department far too much unaccountable power, and of helping Wall Street too much without really helping people on Main Street. 

Of Causes and Consequences

Understanding the cause of the current economic dilemma is valuable.  Rash gambles were encouraged by ‘bubble economic’ policies and the shredding of government regulations.  This deregulatory enthusiasm was led by “mental recession” Republican Phil Gramm and was aided by Fed Chairman Alan Greenspan and Bob Rubin, the Treasury Secretary under President Bill Clinton.  Deregulation stimulated financial industry speculation.  This industry is always hungry for bigger profits to reward investors and to increase CEO bonuses.  This stimulation of risk-taking unfortunately led to foolish bets and an inevitable deflation of the housing bubble.  As a result, the entire global financial system has been destabilized, posing a serious threat to the foundations of the rest of the real Main Street economy. 

According to the wise columnist and author Robert Kuttner, “The cycle of ignoring lessons of history is speeding up.  It took more than four decades for American capitalism to forget the lessons of the great crash of 1929 and begin repeating the same abuses.  It took less than four years to forget the lessons of the crash of 2000.”  This observation is made in a compelling book whose title reveals the bottom-line problem of many of the challenges we face: The Squandering of America: How the Failure of Our Politics Undermines Our Prosperity.

Mark Twain once wrote, “It is not worthwhile to try to keep history from repeating itself, for man's character will always make the preventing of the repetitions impossible.”  Sure, basic human nature does not change.  But this is an even more compelling reason for us to structure our rules and regulations well, and not to abandon them in times of zeal for the unleashing of opportunists and gamblers, in good times or in bad.  I recommend that readers check out Naomi Klein’s The Shock Doctrine: The Rise of Disaster Capitalism, and think about the current situation in light of the historical perspectives and valuable insights that this book contains.

A Time of Dangerous Opportunity

We are immersed in a severe economic crisis, so uncertainty and fear abound.  Suspicion and distrust and a sudden heightened aversion to risk are like gravel thrown into the gears of economic dealings, inhibiting trade, interfering with rational financing, and disrupting the usual mechanisms for spreading risk and recycling international trade dollars and facilitating normal commerce. 

This is a time of dangerous opportunity.  Things could be made radically better, or radically worse.  We could ensure that they become better by adhering to intelligent policies and honoring fair-minded principles and uniting in the common cause of creating a more sound economy and a better world that is characterized by greater justice, more sustainable activities, and a more committed solidarity of purpose in helping neighbors and living together in peaceful coexistence.

On the other hand, it is well known that despotism flourishes during times of crisis, uncertainty and insecurity.  We must be vigilant to safeguard against threats posed by the “right wing” and its authoritarian, any-means-are-justified-to-accomplish-the-end tactics.  Threats to our liberties, our democracy and system of justice are heightened by this crisis, dashing hopes for fairer opportunities and general prosperity.

We must heed the words of Thomas Jefferson, the third President of the United States and principal author of the Declaration of Independence:

 “… should we wander from these principles in moments of error or of alarm, let us hasten to retrace

    our steps and to regain the road which alone leads to peace, liberty and safety.”      

These observations about the right wing are not random conspiracy theories.  They are a reflection of an incisive knowledge of history and of an awareness of human nature as manifested in the character of human societies.  The crisis in which we suddenly find ourselves has been engineered by laissez-faire economic fundamentalists who oppose government regulations and oversight.  These shrewd ideologues know that opportunities for profit are significantly increased when economic activities are inflated through stimulative easy credit and encouraged debt leveraging and obscured financial dealings and lax oversight and minimized government supervision and generally hyped-up opportunities for speculation.  Inadvertently or intentionally, shrewd operative have created a state of affairs that threatens the entire global economy.  Give us a break!

Milton Friedman once said: “Only a crisis -- actual or perceived -- produces real change.  When that crisis occurs, the actions that are taken depend on the ideas that are lying around.  That, I believe, is our basic function:  to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.”  Naomi Klein compellingly points out that crises tend to provide Machiavellian opportunities for domination and harm to be inflicted “all at once”.  I strongly encourage people to read her book The Shock Doctrine for more extensive insights into the nefarious ambitions of the people who pull the strings behind the curtain of economic and political intrigue.  The circumstances that surround the banking bailout in September 2008 are frightening for the lack of oversight proposed and for the ‘fox in the henhouse’ nature of letting the financial industry set the terms of this, the biggest government bailout in history.

One goal of the Earth Manifesto is to provide a different and more progressive set of ideas “lying around”.  These are socially more advantageous ideas that will help guide us to choices that radically improve our societies for the vast majority, rather than making them better only for a small group of insiders and manipulators and authoritarian control freaks and wealthy people, who are the ones who usually benefit from economic fundamentalist machinations like those advocated by Milton Friedman.

Good Governance Means Good Management

Ironically, the financial crisis was created in the first place by ideologues who opposed taxes and regulation, and who zealously promoted the unleashing of unfettered capitalism and uncontrolled financial speculation and reduced supervision of the banking industry.  The odd thing about this type of “casino capitalism” and the bailout plan is that they do not institute far-sighted good rules.  Gambling in casinos, in contrast, is governed by strict government regulations.  Gamblers in a casino would certainly prefer to ‘game’ in an establishment where there are strict and fairly-understood rules and proper controls and protections against cheating, casino dishonesty and pronounced conflicts of interest.

Our leaders have been mismanaging the economy for years.  They have planned poorly and designed rules foolishly, and supported fiscally irresponsible expediencies.  They have done this to promote a failing ideology that has at its core two basic quests that date to the beginning of the Industrial Revolution:  (1) the attempt for capital to vanquish and disempower labor, and (2) the ruse of creating opportunities for the upper class to exploit and disenfranchise the middle class and the poor. 

The U.S. has been driving a hard bargain for the poor for decades by scolding them for lacking personal responsibility.  Spending has been slashed in our welfare system, taxation has been made more regressive, ever-harsher punishments have been imposed for victimless crimes and small-time criminals, the collective bargaining power of working people has been reduced, jobs have been moved overseas, slum dwellers have been forsaken, and corporate prerogatives and profits have been encouraged that contribute to rapid inflation in the costs of food, gasoline, electricity, rent, mortgages and medical care.  In contrast, no such hard bargain for the rich has been tried.  Give us a break -- this is a democracy, folks!  We’ve got ‘em outnumbered!

The rich have declared war on the rest of us, but we can choose to even the playing field a bit by voting intelligently.  Left-leaning pundits say that “lap dogs of the corporatocracy” have helped engineer this critical state of affairs.  They say that shills for industry are in some ways a million times worse than the common thief who desperately robs a bank.  These “lap dogs”, after all, have almost destroyed the banks themselves in the name of speculative profit and laissez-faire economic theories and anti-government righteousness.  And in the name of these ideologies, they have created a situation where re-regulation is required and Really Big Government is being required to step in to the rescue.  Ironic!

Perhaps it’s only one point of view that today’s financial turmoil is caused by adherence to the radical ‘conservative’ ideology of deregulation.  One of the more intriguing narratives that is propounded by conservatives holds that our current economic woes actually stem from problems caused by a law passed during Jimmy Carter’s Administration:  the Community Reinvestment Act.  The purpose of this law was to create affordable housing for people of modest means, and to ensure that people who lived in inner city areas and distressed rural communities have fair access to credit.  Some conservatives say it was not speculators, greedy bankers, deregulators and politicians who caused the financial meltdown, but poor people!  Liberals respond that this is a curious form of a Big Lie story, one “that blames a despised, outcast social group for problems they had nothing to do with, in order to aggrandize the ability of the dominant group to hate and oppress.”  Yikes! … Conservatives ignore the fact that homes in foreclosure are fewer among people who got loans through this Act.  In this issue, the points of view of liberals deserve more credence.

Anyone who objectively looks at the record of the last eight years will see how irresponsible our national fiscal policies have been.  The Bush Administration has: (1) caused large budget deficits and radically ramped up the national debt, almost doubling it; (2) hyper-stimulated government spending; (3) encouraged speculative leveraging, even though this significantly increased the risk of bankruptcies and the destabilization of the entire global economy; (4) devoted themselves wholeheartedly to tax cutting to primarily benefit the wealthy; (5) weakened collective bargaining influence and taken other actions designed to reduce the power of workers and erode middle class prosperity;  and (6) indulged in an on-going effort to allow big corporations to unsustainably exploit the planet’s natural resources, damage the environment and externalize costs onto society.  “Nice going, guys!”

An Odd Blue Ode

Oh Irony, you are a clever and alluring she-devil

And Cynicism, you are a skulking trickster semi-friend

Must you visit us so insidiously and cruelly together

And crash our party, sending us around an ominous bend?

It comes to this once again, as many times before

A crisis of confidence gives us our collective comeuppance

And passion and certitude reveal themselves to be lousy guides

Betrayed by reality that interrupts our fervent and drunken dance.

“Nothing in excess” declared the Oracle at Delphi

Yet “conservatives” bizarrely champion extremist ideologies

Encouraging consumption, exploitation, gambling and oppression without repent

Until a tipping point ambushes us and destroys our cherished mythologies.

The True Nature of Our Political Process

Ideological dogmas, swindles, greed and hubris have led us to the brink of another serious economic depression.  In the midst of an historic Presidential election, the deceptions and hypocrisy of ringing slogans that declare “Country First” are exposed like the proverbial emperor with no clothes.  We see politicians grandstanding and trying to hide naked facts and deny their prominent roles in this economic debacle.  They try to obfuscate what’s really happening, and why. 

These gambits make the failings of our political system dramatically clearer.  Ruthless competition for political ascendancy has created a system in which politicians demonstrate a hyper-partisan unwillingness to cooperate and compromise.  The inability to achieve consensus is caused by a cynical exploitation of hot-button social issues, dysfunctional relationships, obstinate dealings, ‘gotcha’ politics, dishonest rationalizations in ‘blame game’ rhetoric, dirty-tricks campaigning, crony capitalist corruption, a societal predilection for shallow sound-bite communications and sloganeering, and ‘take-no-prisoners’ efforts to attain political supremacy.  Franklin Roosevelt once said, “I am neither bitter nor cynical, but I do wish there was less immaturity in political thinking.” 

Our political process has failed us for a variety of provocative reasons that are analyzed extensively in Earth Manifesto essays.  Politics should be about much more than power, money, and winning at any cost.  As the late Senator Paul Wellstone of Minnesota once said, “Politics is about the improvement of people’s lives.  It’s about advancing the cause of peace and justice in our country and in the world.”  Well, it should be, anyway!

The serious dysfunctionality of our political process was highlighted by the dramatic failure of the first Bailout Bill.  Congress tends to use practical but perverse methods to craft almost every piece of legislation.  Every bill evolves in a similar way:  a disparate set of plans devised by vested interest groups is thrown together with enough bells and whistles to please conservatives and enough crumbs to bribe progressive-minded representatives into signing on to give the legislation enough support to pass.  New legislation is almost always fiscally irresponsible, because the expediency of debt financing is too easy, and the alternatives of finding ways to pay for new laws are too difficult and unpopular.  This is poor management, and posterity will judge it harshly!

Our public policies are often designed to sell the public on a narrow agenda, no matter how ill-advised it may be, and no matter how shortsighted, unfair and un-American this agenda may prove to be.  The Bush White House in particular has used permanent campaign tactics to promote its plans and its pet ideological initiatives.  The American people would be much better served with honest communications, good governance, honorable efforts to build consensus, fairness in planning, and bipartisan compromise.  Alan Greenspan’s words in The Age of Turbulence reverberate with resonant validity: 

“Compromise on public issues is the price of civilization, not an abrogation of principle.” 

Greater Good Goals

To achieve goals that are consistent with the greater good, let’s use our understandings of human nature to establish adaptive protections against abuses of power, cronyism, corrupt or incompetent management, fraud and overly risky speculative excesses.  We must work with human nature to propitiously guide people by structuring our economic system so that strongly motivating incentives are provided to motivate people to act in socially desirable ways, and effective disincentives are used to discourage people from acting in undesirable ways.

Every person has both virtues and vices like generosity and greed, kindness and meanness, prudence and recklessness, honesty and deceitfulness.  Knowing this, we can create a structure of governance in which greater good goals can be achieved -- and NOT merely the narrow agendas of powerful people.  Knowing this, we can focus on electing representatives who are good managers, and who have good ideas and plans.  Knowing how dysfunctional our political process is, and why, we will be in a better position to reform it.  Knowing how dangerous it is to have our federal government run by ideological extremists, we should be able to strengthen our laws and institutions to successfully keep those factions, which perennially strive to control our societies, from having negative and domineering political influence over us.  The three factions that we must guard against are:  (1) hawkish war-enthusiast yahoos;  (2) zealous profit-at-any-cost speculators, and (3) retrogressive fanatics of the religious right.

Tax Cutting As Religion, and Insights into Government

Deregulation may be one of the favorite Republican doctrines, but the most cherished strategy in the Republican Party playbook is to cut taxes.  The chickens are figuratively coming home to roost for our stubborn adherence to this strategy, and the foxes, as always, are guarding the henhouse.  Cutting taxes is actually the only real Republican claim to populism;  no one likes to pay taxes.  Republican operatives figure that tax cuts are always a winning strategy, even though circumstances are proving it to be hurting our economy and undermining our national infrastructure and local and state governments and the social safety net.  Think about this carefully:  there are five principal reasons that cutting taxes is a shrewd but shortsighted strategy.

(1) The Republican Party gains popularity by cutting taxes.  This seems to be the case no matter how regressive and tilted to the rich the tax cuts are, and regardless of how fiscally and socially irresponsible this strategy may be.

(2) The action of reducing taxes allows today’s wanton bubble of consumerism to be pumped up, and everyone seems willing to deny the obvious fact that the inflation of this bubble is almost certain to be coming at the expense of a ‘depletionary’ deflation of economic growth for those in the future, with all the attendant woes and hardships that such an outcome of squandered resources implies.

(3) Tax-cutting tactics invariably lead to increased debt rather than balanced budgets.  Our representatives just seem constitutionally incapable of making difficult decisions required to reduce government spending.  Cutting taxes and increasing debt are shrewd means for benefiting the financially most privileged people alive today at the expense of all people in future generations.  And spending continues on its merry way, even for stupidly targeted earmarks and misguided subsidies and wasteful programs and bureaucratic inefficiencies and wars.

(4) Deficit spending has an inflationary effect, and this tends to devaluate our currency.  Inflation is a way to make debt repayable in cheaper dollars, but the unintended consequences of this expediency have detrimental impacts on millions of people.

(5) Budget deficits and increases in national debt that result from tax cuts make our government less financially secure, so in a backhanded way they will eventually thwart pesky bleeding-heart Big Government liberals and force deep cuts in social spending.  And voila! -- this tactic will undermine social programs, which just happen to be the most cherished populist strategy in the Democratic Party playbook!  Holy cow, Batman!  Holy crap, Robin!  Holy cynicism, Dark Knight! 

The Proper Role of Government in Our Lives

To figure our where we go from here, it helps to have a clear Big Picture understanding of our society and the role that the government plays in our lives.  The proper role of the federal government can best be understood by viewing it from the perspective of the three principal arenas in which government has influence:  namely, in the areas of freedom, opportunity, and security.  Ideally, government should be minimally involved in interfering with people’s freedoms;  it should be actively engaged in ensuring fairness of opportunity and legal justice;  and it should be strongly and properly involved in making people secure and safe from internal and external threats. 

In other words, the government should act steadfastly to help assure liberties and human rights;  it should NOT be an agent that unduly infringes upon them.  The government should involve itself in fairly adjudicating between competing interests.  It should act as an impartial referee, and NOT abandon the playing field to socially irresponsible and unscrupulous and exploitive and short-term-oriented interest groups and gamblers.  And government should honestly strive to make its citizens safer and more secure, NOT to intimidate them, oppress them, deceive them, or erode the underpinnings of general prosperity.  It should also avoid making war on people in other countries for unjust, unethical and wrongheaded purposes.

What characterizes our government today?  It’s “backasswards”!  Big Brother meddles with our freedoms and interferes with our civil liberties, and it too often strives to socially engineer society into narrow, antiquated and puritanical visions of propriety.  It spies on citizens.  It disengages from important duties like properly regulating banks, extractive industries and big businesses.  It allows lobbyists to write the provisions of most proposed laws to the detriment of the greater good.  It bureaucratically and gullibly bumbles by allowing vested interests to abuse power and exploit people in order to profit at the expense of workers and taxpayers.  It prosecutes those involved in victimless crimes.  It indulges in lies of omission and selective distortions of information, as if equivocation, prevarication and tergiversation were healthy modes of communication.  And it blatantly acts as a military aggressor that mismanages international affairs, uses fear and ideologically specious arguments to advance foreign policies that cause mutual insecurity and terrible collateral damage.  These courses of action basically make the American people and our allies and ‘enemies’ less safe, so they are dangerous policies.

We’ve been sold this bill of goods by shrewd bait-and-switch opportunists who have manipulatively exploited people’s fears and used divisive hot-button wedge issues to gain power.  The subsequent abuse of power is like a crusade to suppress precautionary voices and eliminate sensible regulation, oversight, supervision, accountability, intelligent pragmatism and hopes for peaceful coexistence.  What chicanery! 

Some wily feminists and others say that this is a quest for Strict Father dominion and Almighty profit that gives fawning obeisance to Mammon, the false god of avarice and wealth and materialistic consumerism.  Let’s NOT let it be!

Cheer Up, Things Could Be Worse

Let us not feel ‘blue’ about our current dilemma.  Let us instead act to make a positive difference in the world.  Change can be good or bad, for better or for worse.  Progressive change is much more desirable than regressive change.  I highly recommend that readers check out the Progressive Agenda for a More Sane Humanity in Part Four of the Earth Manifesto.  Many dozens of good ideas are provided there that could help make our world fairer, safer and more sustainable. 

I think again of a T-shirt that I saw at a soulful blues festival that proclaimed, “Rebel against something, because everything ain’t right.”  We all can make a difference, and it would be good for our well-being and our souls if we all took a single step in the right direction.  It just happens to be that the right direction is NOT the far-right direction!

Lyrics from The Eve of Destruction  (Barry McGuire, 1965):

music_noteWhen human respect is disintegratin’

  This whole crazy world is just too frustratin’ …

   The poundin’ of the drums, the pride and disgrace …

Hate your next-door neighbor, but don’t forget to say grace

 And you tell me over and over and over and over again, my friend

  You don’t believe we’re on the eve of destruction.

Lyrics from The Dawn of Correction (The Spokesman, 1965):

music_noteThere are buttons to push in too many nations,

      but who’s crazy enough to risk annihilation?

       The buttons are there to insure negotiation,

         so don’t be afraid, boy, it’s our only salvation …

  Be thankful our country allows demonstrations

   Instead of condemnin’, make some recommendations

    Negotiation is our only salvation …

     So over and over again, you keep sayin’ it’s the end

      But I say you’re wrong, we’re just on the dawn of correction.


California Leads the Way?

The Republican legislative minority in California recently delayed the annual state budget for the longest period in history.  And presto! -- when everyone finally agreed to a budget, it contained yet another ill-conceived kick-the-problem-down-the-road solution, a provision to borrow more money instead of enacting any new taxes or cutting spending.  And the absurd catch is that the planned borrowing is from future hoped-for profits from the state lottery.  This strategy basically saddles those who buy lottery tickets, who are mainly those with lower incomes, with the costs of closing large deficits. 

In other words, the solution did NOT involve borrowing it from, or assessing it to, the people who can actually afford it!  This solution is once again a short-term-oriented, greed-driven, stubbornly special-interest-pandering and therefore dumb approach to deal with fiscal shortfalls.  I’ll bet we could devise a much better plan with a Civil Grand Jury of citizens who would be assigned the responsibility of studying economic problems and historical causes and effects, and then making recommendations, or an independent panel of renowned non-partisan economists who have studied different systems around the world.  Politics!

Ideologies Have Met Reality, and What Should We Believe In Now?

Franklin Roosevelt said the following, which has created waves and reactionary resistance ever since:  Here is my principle:  taxes shall be levied according to ability to pay.  That is the only American principle.”  Hmmm … seems more like a European principle, and a socially wise one.  Then again, conservatives have construed progressive tax plans to be a socialistic danger to civilization.  They equate such tax plans with communism, and our national Cold War brainwashing still gives most folks a potent charge against ideas like this.  In the epic struggle between capital and labor, capital has temporarily gained ascendant sway, but this is proving to be so harmful to society that the pendulum must begin to swing back toward the middle, and it almost certainly will -- in the next presidency.  We cannot continue to undermine tens of millions of Americans in the middle class merely for the purpose of giving bigger benefits to the upper class. 

Republicans have made “taxes” one of the repugnant words in the English language.  The outcome of this shrewdly ideological stubbornness is tantamount to tragedy when it is coupled with irresponsible borrow-to-spend tactics and hyper-partisan politicking that characterizes Washington D.C.

The upshot of the above observations about the purposes of government is this:  it costs money to run the government.  Since there are valid and important reasons to have government, it is imperative for us to assess enough money to finance it.  We should pay as we go.  Such an idea would radically alter our spending and taxation strategies, and force our elected representatives to make more courageous decisions that are required of good governance.  We urgently need good managers to run the government who clearly recognize the need to create fair and sensible ground rules in our society. 

There are both good and bad aspects of government.  Everyone knows its undesirable characteristics:  it tends to become bureaucratic, red-tape-bound, wasteful, autocratic, and intrusive on individual rights and freedoms.  Can we change it?  Yes, we can!

Let’s Elect New Leaders, and Throw Out the Bums Who Have Betrayed Us!

The change we need involves common sense, intelligence, courage, interpersonal skills, good communication and honesty to effectively navigate the battlefield of conflicting interests.  I feel strongly that Barack Obama offers the best probability of being able to lead our nation in the right direction.  My reasons for believing this are summarized in the Twelve Compelling Reasons to Elect Barack Obama, NOT John McCain.

In these turbulent times, we should make no mistake about it:  our economy is resilient, and this unsettling episode too shall pass.  Fear and exuberance ebb and flow with the expansions and contractions in markets that are such distinct features of capitalist market economies.  We should not forget Franklin D. Roosevelt’s wise observation:  “Let me assert my firm belief that the only thing we have to fear is fear itself.”  One day these times will seem like a long time ago, and paralyzing fears will have given way to confidence in a better modus operandi.

Immersed in the on-rush of change, clarity is clearly difficult to achieve.  But change is the only certainty, so let’s choose positive, progressive change!  And say, don’t we live in interesting times?!

Thanks for giving these ideas your consideration!


            Dr. Tiffany B. Twain       

                  Hannibal, Missouri     

                       October 16, 2008     


Postscript:   Michael Moore’s Ten Point Plan   (October 1, 2008)

The ever-inventive Michael Moore polled a number of economists and came up with a compelling Ten Point Plan to save the economy.  It contains some provocative ideas and interesting observations.  I have appended this plan below for readers’ reference and entertainment.  In summary, his plan is this:

(1)  Have the rich pay for bailouts.  He provides a good variety of proposals.

(2)  Bail out the people who are losing their homes to foreclosure.

(3)  Give the government, in its capacity as the representative of taxpayers, an equity stake in all banks and insurance companies that it bails out.

(4)  Restore sensible regulations relating to banks, and ensure strong oversight and enforcement in all bailouts.

(5)  Enforce monopoly and anti-trust laws to keep companies from getting “too big to fail”.

(6)  Limit the compensation of top executives of all big corporations.

(7)  Increase the bank deposit guarantees of the FDIC, and find ways to protect people’s retirement funds.

(8)  Don’t let fear rule the day.  The economy is resilient, and the sky is not falling.

(9) Create a National People’s Bank that will allow profits to be shared with customers rather than just corporate CEOs and Wall Street investors.

(10)  And lastly, the first item on Michael Moore’s in-your-face list:  criminally prosecute everyone who knowingly contributed to the economic crisis.  Ha!  Fat chance!

Michael Moore’s Ten Point Plan 


The richest 400 Americans -- that's right, just four hundred people -- own MORE than the bottom 150 million Americans combined.  So 400 rich Americans have got more stashed away than half the entire country!  Their combined net worth is $1.6 trillion.  During the eight years of the Bush Administration, their wealth has increased by nearly $700 billion -- the same amount that they are now demanding we give to them for the "bailout."  Why don't they just spend the money they made under Bush to bail themselves out?  They'd still have nearly a trillion dollars left over to spread among themselves!

Of course, they are not going to do that -- at least not voluntarily.  George W. Bush was handed a $127 billion surplus when Bill Clinton left office.  Because that money was OUR money and not his, he did what the rich prefer to do -- spend it and never look back.  Now we have a $9.5 trillion debt.  Why on earth would we even think of giving these robber barons any more of our money?

I would like to propose my own bailout plan.  My suggestions, listed below, are predicated on the singular and simple belief that the rich must pull themselves up by their own platinum bootstraps.  Sorry, fellows, but you drilled it into our heads one too many times:  There... is... no... free... lunch.  Thanks for encouraging us to hate people on welfare!  So, there will be no handouts from us to you … 

It is clear that we cannot simply keep protesting without proposing exactly what it is we think Congress should do.  So, after consulting with a number of people smarter than Phil Gramm, here is my proposal, now known as "Mike's Rescue Plan."  It has 10 simple, straight-forward points. They are:

1. APPOINT A SPECIAL PROSECUTOR TO CRIMINALLY INDICT ANYONE ON WALL STREET WHO KNOWINGLY CONTRIBUTED TO THIS COLLAPSE.  Before any new money is expended, Congress must commit, by resolution, to criminally prosecute anyone who had anything to do with the attempted sacking of our economy.  This means that anyone who committed insider trading, securities fraud or any action that helped bring about this collapse must go to jail.  This Congress must call for a Special Prosecutor who will vigorously go after everyone who created the mess, and anyone else who attempts to scam the public in the future.

2. THE RICH MUST PAY FOR THEIR OWN BAILOUT.  They may have to live in 5 houses instead of 7.  They may have to drive 9 cars instead of 13.  The chef for their mini-terriers may have to be reassigned.  But there is no way in hell, after forcing family incomes to go down more than $2,000 dollars during the Bush years, that working people and the middle class are going to fork over one dime to underwrite the next yacht purchase.

If they truly need the $700 billion they say they need, well, here is an easy way they can raise it:

a) Every couple who makes over a million dollars a year and every single taxpayer who makes over $500,000 a year will pay a 10% surcharge tax for five years.  (It's the Senator Sanders plan.  He's like Colonel Sanders, only he's out to fry the right chickens.)  That means the rich will still be paying less income tax than when Carter was president. This will raise a total of $300 billion.

b) Like nearly every other democracy, charge a 0.25% tax on every stock transaction. This will raise more than $200 billion in a year.

c) Because every stockholder is a patriotic American, stockholders will forgo receiving a dividend check for one quarter and instead this money will go the Treasury to help pay for the bailout.

d) 25% of major U.S. corporations currently pay NO federal income tax.  Federal corporate tax revenues currently amount to 1.7% of the GDP compared to 5% in the 1950s.  If we raise the corporate income tax back to the level of the 1950s, that gives us an extra $500 billion.

All of this combined should be enough to end the calamity.  The rich will get to keep their mansions and their servants, and our United States government ("COUNTRY FIRST!") will have a little leftover to repair some roads, bridges and schools.

3. BAIL OUT THE PEOPLE LOSING THEIR HOMES, NOT THE PEOPLE WHO WILL BUILD AN EIGHTH HOME.  There are 1.3 million homes in foreclosure right now.  That is what is at the heart of this problem.  So instead of giving the money to the banks as a gift, pay down each of these mortgages by $100,000.  Force the banks to renegotiate the mortgage so the homeowner can pay on its current value.  To insure that this help does no go to speculators and those who have tried to make money by flipping houses, this bailout is only for people's primary residence.  And in return for the $100K paydown on the existing mortgage, the government gets to share in the holding of the mortgage so that it can get some of its money back.  Thus, the total initial cost of fixing the mortgage crisis at its roots (instead of with the greedy lenders) is $150 billion, not $700 billion.

And let's set the record straight.  People who have defaulted on their mortgages are not "bad risks."  They are our fellow Americans, and all they wanted was what we all want and most of us still get: a home to call their own.  But during the Bush years, millions of them lost the decent paying jobs they had.  Six million fell into poverty.  Seven million lost their health insurance.  And every one of them saw their real wages go down by $2,000.  Those who dare to look down on these Americans who got hit with one bad break after another should be ashamed.  We are a better, stronger, safer and happier society when all of our citizens can afford to live in a home that they own.

4. IF YOUR BANK OR COMPANY GETS ANY OF OUR MONEY IN A "BAILOUT," THEN WE OWN YOU.  Sorry, that's how it's done.  If the bank gives me money so I can buy a house, the bank "owns" that house until I pay it all back -- with interest.  Same deal for Wall Street.  Whatever money you need to stay afloat, if our government considers you a safe risk -- and necessary for the good of the country -- then you can get a loan, but we will own you.  If you default, we will sell you.  This is how the Swedish government did it and it worked.

5. ALL REGULATIONS MUST BE RESTORED.  THE REAGAN REVOLUTION IS DEAD.  This catastrophe happened because we let the fox have the keys to the henhouse.  In 1999, Phil Gramm authored a bill to remove all the regulations that governed Wall Street and our banking system.  The bill passed and Clinton signed it.  Here's what Sen. Phil Gramm, McCain's chief economic advisor, said at the bill signing:

"In the 1930s ... it was believed that government was the answer.  It was believed that stability and growth came from government overriding the functioning of free markets. We are here today to repeal [that] because we have learned that government is not the answer.  We have learned that freedom and competition are the answers.  We have learned that we promote economic growth and we promote stability by having competition and freedom.  I am proud to be here because this is an important bill; it is a deregulatory bill.  I believe that that is the wave of the future, and I am awfully proud to have been a part of making it a reality.

This bill must be repealed.  Bill Clinton can help by leading the effort for the repeal of the Gramm bill and the reinstating of even tougher regulations regarding our financial institutions.  And when they're done with that, they can restore the regulations for the airlines, the inspection of our food, the oil industry, OSHA, and every other entity that affects our daily lives.  All oversight provisions for any "bailout" must have enforcement monies attached to them and criminal penalties for all offenders.

6. IF IT'S TOO BIG TO FAIL, THEN THAT MEANS IT'S TOO BIG TO EXIST.  Allowing the creation of these mega-mergers and not enforcing the monopoly and anti-trust laws has allowed a number of financial institutions and corporations to become so large, the very thought of their collapse means an even bigger collapse across the entire economy.  No one or two companies should have this kind of power.  The so-called "economic Pearl Harbor" can't happen when you have hundreds -- thousands -- of institutions where people have their money.  When you have a dozen auto companies, if one goes belly-up, we don't face a national disaster.  If you have three separately-owned daily newspapers in your town, then one media company can't call all the shots (I know... What am I thinking?!  Who reads a paper anymore?  Sure glad all those mergers and buyouts left us with a strong and free press!).  Laws must be enacted to prevent companies from being so large and dominant that with one slingshot to the eye, the giant falls and dies.  And no institution should be allowed to set up money schemes that no one can understand.  If you can't explain it in two sentences, you shouldn't be taking anyone's money.

7. NO EXECUTIVE SHOULD BE PAID MORE THAN 40 TIMES THEIR AVERAGE EMPLOYEE, AND NO EXECUTIVE SHOULD RECEIVE ANY KIND OF "PARACHUTE" OTHER THAN THE VERY GENEROUS SALARY HE OR SHE MADE WHILE WORKING FOR THE COMPANY.  In 1980, the average American CEO made 45 times what their employees made.  By 2003, they were making 254 times what their workers made.  After 8 years of Bush, they now make over 400 times what their average employee makes.  How this can happen at publicly held companies is beyond reason.  In Britain, the average CEO makes 28 times what their average employee makes.  In Japan, it's only 17 times!  The last I heard, the CEO of Toyota was living the high life in Tokyo.  How does he do it on so little money?  Seriously, this is an outrage.  We have created the mess we're in by letting the people at the top become bloated beyond belief with millions of dollars.  This has to stop.  Not only should no executive who receives help out of this mess profit from it, but any executive who was in charge of running his company into the ground should be fired before the company receives any help.

8. STRENGTHEN THE FDIC AND MAKE IT A MODEL FOR PROTECTING NOT ONLY PEOPLE'S SAVINGS, BUT ALSO THEIR PENSIONS AND THEIR HOMES.  Barack Obama was correct yesterday to propose expanding FDIC protection of people's savings in their banks to $250,000.  But this same sort of government insurance must be given to our nation's pension funds.  People should never have to worry about whether or not the money they've put away for their old age will be there.  This will mean strict government oversight of companies who manage their employees' funds -- or perhaps it means that the companies will have to turn over those funds and their management to the government.  People's private retirement funds must also be protected, but perhaps it's time to consider not having one's retirement invested in the casino known as the stock market.  Our government should have a solemn duty to guarantee that no one who grows old in this country has to worry about ending up destitute.

9. EVERYBODY NEEDS TO TAKE A DEEP BREATH, CALM DOWN, AND NOT LET FEAR RULE THE DAY.  Turn off the TV!  We are not in the Second Great Depression.  The sky is not falling.  Pundits and politicians are lying to us so fast and furious it's hard not to be affected by all the fear mongering.  Even I, yesterday, wrote to you and repeated what I heard on the news, that the Dow had the biggest one day drop in its  history.  Well, that's true in terms of points, but its 7% drop came nowhere close to Black Monday in 1987 when the stock market in one day lost 23% of its value.  In the '80s, 3,000 banks closed, but America didn't go out of business.  These institutions have always had their ups and downs and eventually it works out.  It has to, because the rich do not like their wealth being disrupted!  They have a vested interest in calming things down and getting back into the Jacuzzi.

As crazy as things are right now, tens of thousands of people got a car loan this week.  Thousands went to the bank and got a mortgage to buy a home.  Students just back to college found banks more than happy to put them into hock for the next 15 years with a student loan.  Life has gone on.  Not a single person has lost any of their money if it's in a bank or a treasury note or a CD.  And the most amazing thing is that the American public hasn't bought the scare campaign.  The citizens didn't blink, and instead told Congress to take that bailout and shove it.  THAT was impressive.  Why didn't the population succumb to the fright-filled warnings from their president and his cronies?  Well, you can only say 'Saddam has da bomb' so many times before the people realize you're a lying sack of shite.  After eight long years, the nation is worn out and simply can't take it any longer.

10. CREATE A NATIONAL BANK, A "PEOPLE'S BANK."  If we really are itching to print up a trillion dollars, instead of giving it to a few rich people, why don't we give it to ourselves?  Now that we own Freddie and Fannie, why not set up a people's bank?  One that can provide low-interest loans for all sorts of people who want to own a home, start a small business, go to school, come up with the cure for cancer or create the next great invention.  And now that we own AIG, the country's largest insurance company, let's take the next step and provide health insurance for everyone.  Medicare for all.  It will save us so much money in the long run.  And we won't be 12th on the life expectancy list.  We'll be able to have a longer life, enjoying our government-protected pension, and living to see the day when the corporate criminals who caused so much misery are let out of prison so that we can help re-acclimate them to civilian life -- a life with one nice home and a gas-free car that was invented with help from the People's Bank.

        Michael Moore