The current financial crisis facing our country has been caused by the extreme right-wing economic policies pursued by the Bush administration. These policies, which include huge tax breaks for the rich, unfettered free trade and the wholesale deregulation of commerce, have resulted in a massive redistribution of wealth from the middle class to the very wealthy.
The middle class has really been under assault. Since President Bush has been in office, nearly 6 million Americans have slipped into poverty, median family income for working Americans has declined by more than $2,000, more than 7 million Americans have lost their health insurance, over 4 million have lost their pensions, foreclosures are at an all time high, total consumer debt has more than doubled, and we have a national debt of over $9.7 trillion dollars.
While the middle class collapses, the richest people in this country have made out like bandits and have not had it so good since the 1920s. The top 0.1 percent now earn more money than the bottom 50 percent of Americans, and the top 1 percent own more wealth than the bottom 90 percent. The wealthiest 400 people in our country saw their wealth increase by $670 billion while Bush has been president. In the midst of all of this, Bush lowered taxes on the very rich so that they are paying lower income tax rates than teachers, police officers or nurses.
Now, having mismanaged the economy for eight years as well as having lied about our situation by continually insisting, “The fundamentals of our economy are strong,” the Bush administration, six weeks before an election, wants the middle class of this country to spend many hundreds of billions on a bailout. The wealthiest people, who have benefited from Bush’s policies and are in the best position to pay, are being asked for no sacrifice at all. This is absurd. This is the most extreme example that I can recall of socialism for the rich and free enterprise for the poor.
In my view, we need to go forward in addressing this financial crisis by insisting on four basic principles:
(1) The people who can best afford to pay and the people who have benefited most from Bush’s economic policies are the people who should provide the funds for the bailout. It would be immoral to ask the middle class, the people whose standard of living has declined under Bush, to pay for this bailout while the rich, once again, avoid their responsibilities. Further, if the government is going to save companies from bankruptcy, the taxpayers of this country should be rewarded for assuming the risk by sharing in the gains that result from this government bailout.
Specifically, to pay for the bailout, which is estimated to cost up to $1 trillion, the government should:
a) Impose a five-year, 10 percent surtax on income over $1 million a year for couples and over $500,000 for single taxpayers. That would raise more than $300 billion in revenue;
b) Ensure that assets purchased from banks are realistically discounted so companies are not rewarded for their risky behavior and taxpayers can recover the amount they paid for them; and
c) Require that taxpayers receive equity stakes in the bailed-out companies so that the assumption of risk is rewarded when companies’ stock goes up.
(2) There must be a major economic recovery package which puts Americans to work at decent wages. Among many other areas, we can create millions of jobs rebuilding our crumbling infrastructure and moving our country from fossil fuels to energy efficiency and sustainable energy. Further, we must protect working families from the difficult times they are experiencing. We must ensure that every child has health insurance and that every American has access to quality health and dental care, that families can send their children to college, that seniors are not allowed to go without heat in the winter, and that no American goes to bed hungry.
(3) Legislation must be passed which undoes the damage caused by excessive de-regulation. That means reinstalling the regulatory firewalls that were ripped down in 1999. That means re-regulating the energy markets so that we never again see the rampant speculation in oil that helped drive up prices. That means regulating or abolishing various financial instruments that have created the enormous shadow banking system that is at the heart of the collapse of AIG and the financial services meltdown.
(4) We must end the danger posed by companies that are “too big too fail,” that is, companies whose failure would cause systemic harm to the U.S. economy. If a company is too big to fail, it is too big to exist. We need to determine which companies fall in this category and then break them up. Right now, for example, the Bank of America, the nation’s largest depository institution, has absorbed Countrywide, the nation’s largest mortgage lender, and Merrill Lynch, the nation’s largest brokerage house. We should not be trying to solve the current financial crisis by creating even larger, more powerful institutions. Their failure could cause even more harm to the entire economy.
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sricabla See Profile I’m a Fan of sricabla permalink
As usual….wealth is privatized and debt is socialized. We should have an even higher tax penalty for those people that were involved in this whole economic mess we’re into.
Reply Favorite Flag as abusive Posted 10:23 AM on 09/20/2008
- rr52 See Profile I’m a Fan of rr52 permalink
Thanks so much for one of the best detailed solutions I’ve heard yet. It’s a Robin Hood program that is right and just for our times. I don’t think announcing to the wealthy that they have to give back will sit well though. While some are generous, others would have to be forced for sure.
I agree wholeheartedly and have been chanting the same thing in my blog for two years that we are being held back by the fossil fuel industry as far as going green. A green economy will unleash a whole new generation of inventions and ingenuity and create a plethora of jobs! People have been so blinded by lies about global warming and fail to see the opportunity this new industry will bring including brand new wealth, and a great looking future to look forward to instead of the same ole, bunch monopolizing the wealth, and literally cutting off anything new and promising for our future.
Reply Favorite Flag as abusive Posted 10:21 AM on 09/20/2008
- notanidiot See Profile I’m a Fan of notanidiot permalink
American”s for John McCain getting a Brain Scan (AJMBS) has stepped up its efforts this week after hearing of the Senator”s desire not to bail out Wall Street. That Senator McCain would support cutting off the head to save the arm only increases the urgency of our cause.
Reply Favorite Flag as abusive Posted 10:06 AM on 09/20/2008
- escobar See Profile I’m a Fan of escobar permalink
It just proves the fact that deep in their hearts, even the most die hard neo-con understands there is nothing so wrong with capitalism that a giant tablespoon of socialism can’t fix.
Reply Favorite Flag as abusive Posted 10:02 AM on 09/20/2008
- temptxan See Profile I’m a Fan of temptxan permalink
Thank you Senator Sanders. You have clearly laid out the situation with the middle class. I have to agree with Senator Biden and call for the wealthiest of Americans to step up to the plate, do their patriotic duty, and pay their fair share of taxes.
Reply Favorite Flag as abusive Posted 10:02 AM on 09/20/2008
- Kassandra See Profile I’m a Fan of Kassandra permalink
As usual, everyone forgets the poor, the halt and the lame……and the old, who’ve been taking it on the chin much worse than the middle class for years under Bush. Being disabled, I’ve watched my social services cut by 75% under this “administration”.
They stole from us first and nobody cared a bit.
Now, suddenly wealthy liberals, seeinga bit of impact on THEM, are all in favor of legalizing millions of people who will ( and are) taking what’s left of the programs. And now that they can’t find jobs, are running drugs up here. I live in a community that’s pretty much been taken over by “illegals” and,sometimes, I fear for my physical safety. Oh, but that’s “racist”. I’ll be quiet now.
Reply Favorite Flag as abusive Posted 10:00 AM on 09/20/2008
- poisonpen2u See Profile I’m a Fan of poisonpen2u permalink
Thank you! At last a voice of reason. Whatever happened to debtors prison…Let’s reinstate it. They can bring their own silk sheets of course.
Reply Favorite Flag as abusive Posted 09:53 AM on 09/20/2008
- vooter See Profile I’m a Fan of vooter permalink
Bernie, I love ya, I really do, but come on–you simply can’t bring up the word “morality” when speaking about either the Bush administration or Wall Street bankers. Because there is no morality there. NONE. Stop kidding yourself. We live in a totalitarian state that doesn’t care a WHIT about the poor or the middle class, or even really about 99% of the people who live here. STOP KIDDING YOURSELVES. Americans need to a) wake up and understand just what kinds of monsters are running this country; and b) decide how they’re going to destroy those monsters (if, of course, they’re interested in NOT living in a totalitarian state, something that most probably couldn’t care less about). We’re running out of options, folks–and quickly. You have a choice: submit, or act. Directly. What’s it going to be?
Reply Favorite Flag as abusive Posted 09:52 AM on 09/20/2008
- terramartom See Profile I’m a Fan of terramartom permalink
How many politicians are actually working for the good of the public?
Not many!
Otherwise this could never happen.
I still have not heard one word about criminal charges against CEOs and politicians that were rewarded as ROME BURNED!
Reply Favorite Flag as abusive Posted 09:42 AM on 09/20/2008
- batguano See Profile I’m a Fan of batguano permalink
Thanks Senator! Keep up your good works for us all. As usual the rich get richer and the rest don’t even get a reach-around! Up until recently McCain and Bush have been pushing for making the Bush “tax cuts” permanent…….will they change their tune…..or continue to represent only the rich at the expense of 90% of us? This is why our local property taxes and other increased local “fees” have gone through the roof, and threatened the lives of so many.
Several good reads on the subject of greed and the abuse of Corporations and the rich, are Arianna Huffingtons “Pigs at the Trough”, David Cay Johnstons “Free Lunch” and “Perfectly Legal”.
Reply Favorite Flag as abusive Posted 09:41 AM on 09/20/2008
If I have to own a piece of these entities, then I believe I am
1. a shareholder, with a vote
2. I get dividends
3. I get tax breaks
4. I get to write off losses
right?
Agree 100% - if they’re too big to fail, they’re too big to exist.
Reply Favorite Flag as abusive Posted 09:38 AM on 09/20/2008
Yes but Bernie, what about the complete failure of government to do anything about the problems that have already occurred? We have scores of regulators in Washington overseeing the financial system. People have been warning about this for years. Why didn’t we rein in Fannie Mae and Freddie Mac as the Bush Administration proposed back in 2003? The Dems in Washington that opposed that effort and it never happened. These were government created institutions…where was the government when it came to these two monster disasters which were huge factors in fueling the mortgage mess.
People are questioning whether the free market system works. They should also be questioning whether government/regulation works because apparently it doesn’t. How is a government already trillions in debt going to do these bailouts and pay for all the handouts you’re proposing without taxing us to death? I am supposed to have new found confidence in a government that itself is $9 trillion in debt and can’t keep its own house in order? Please!! I am a Republican, but I’ve lost all faith in the Republican Party. I have absolutely no faith in the Dems, who would rather score political points than address the true complexities of the problem. And I am disappointed in myself and my people — we have let this happen, and we have allowed ourselves to be led by a bunch of boobs who crank out a lot of hot air while problems fester into Katrina-sized disasters.
Reply Favorite Flag as abusive Posted 09:16 AM on 09/20/2008
Welcome to the United Socialist States of America!
Well, who would have thunk that George W. Bush would turn out to be a Bolshevik and lead the U.S. to the promised land of socialism! American exceptionalism and market capitalism have exited stage left, not with a bang but a whimper. We have entered the realm of corporate socialism and there is no return. The financial sector of the American economy has been nationalized and the U.S. government now has control of the majority of our mortgages. Soon it will carry the commanding height of the industrial sector, the automotive industry, in its debt portfolio. After the oil bubble bursts the energy sector will be next in line. The aerospace industry, the spawn of the military-industrial complex, is already for all intents and purposes socialized. So in order to survive in the globalized economy the U.S. corporate monopoly capitalists have given up the ghost. Corporate socialism is the order of the day. It is now the task of the American people to wrest control of the socialized economy from the corporate elites and democratize it. Economic democracy, long the bogey-man of the bourgeoisie, is now on the national agenda. Rather than allow the elites to control the life-blood of our economy we need to transition from corporate socialism to democratic socialism
Reply Favorite Flag as abusive Posted 09:07 AM on 09/20/2008
I agree that the credit default swaps are at the core of the rotten apple. Everything else started to tumble when this shadow prism market broke. Getting this market on to an open level playing field would be a good thing, in my opinion. It seems that this market is around $40-60 trillion compared to a paltry $7 trillion mortage market.
Among other things, if the fed is going to buy toxic mortgages at a discount why can’t I, the tax payer, get that discount (I would be glad to buy my own mortgage at a discount or negotiate the principal and or interest down). Beyond that, I would be glad to sell my bank a credit default swap too. After all, it is only myself that can default. Obviously, I am assuming that I have worked hard all these years and not over extended myself. So, my mortgage is probably not toxic. Which means I get spanked for being a good boy. Maybe, I need to pretend that I am a bad boy and get a piece of this magical pie.
Finally, we do need to decouple the investment and commercial banks (oh yes, those insurance companies need some federal level regulation since the state insurance commissioners really can’t cross interstate lines other than having NAIC meetings in exotic places).
Reply Favorite Flag as abusive Posted 08:46 AM on 09/20/2008
Honorable Senator Sanders:
Beautifully written. I was especially struck by 1c…if these companies are to receive taxpayer support, then the taxpayer should be rewarded if the companies show a profit. Thank you for your expertise in words and view.
Reply Favorite Flag as abusive Posted 08:33 AM on 09/20/2008
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