By Paul B. Farrell
Wall Street's drunk driving is running over the U.S. economy calling for a new solutions. Farrell proposes an intervention. He'll lay out some suggested solutions for Wall Street's chaotic distortions of conservative principles backfiring, creating a new American socialist economy.
In Step 12, add your solutions:
Step 1. Grow up, be a smart fifth grader, no cognitive dissonance!
In the political arena "cognitive dissonance" means "partisanship," a fancy term for being myopic, inflexible, blind to new ideas. You're a conservative Republican or liberal Democrat. Period. Solution: The new president better set the tone, blunt the childish bickering. However, if Wall Street stays drunk on "greed" cocktails, the chaos will continue. Why? Because like a drunken Joker, Wall Street loves chaos. Yes, Wall Street actually thrives on partisanship, chaos and gridlock. Solution: Greater transparency with any new "fancy financial instruments."
Step 2. Don't vote for a president, vote for his likely cabinet picks
Yes, conservative economics requires leaders of moral character. Too often Washington's 537 elected officials are puppets for 42,000 special interest lobbyists. Solution: Don't vote for the next president, vote for his team. Presidents pick 20 cabinet secretaries. Plus thousands of other officers, judges, ambassadors, SEC members, etc. Who he puts in key policy positions is far more important to America's future than who will get us out of Iraq. Will your new president pick myopic ideologues or real leaders?
Step 3. Fed and Treasury must stop Enron-style accounting gimmicks
A trillion here, a trillion there, and we've gone from a surplus of $5 trillion to almost $10 trillion in debt, in eight short years. Solution: The Fed, Treasury and Congress need to stop using Enron-style accounting gimmicks to hide our debt disaster. America needs to improve its credit, balance the budget, pay down war debts, reduce trade deficits and stop rewarding Wall Street's greed while piling more and more debt onto future generations.
Step 4. Deregulation created socialist housing, time to reregulate
Back in 1999 Congress killed the Glass-Steagall act, dismantling a 75-year-old wall between commercial and investment banking: That opened the door to all the "fancy financial instruments" that got Wall Street into a mess. Now add the new housing act. Solution: Restore Glass-Steagall. If we do not, expect a new binge, mergers of brokers and banks setting up the next meltdown because greed will drive drunks to start gaming American capitalism again, to pump earnings and stock prices, justify big bonuses and salaries, in an effort to regain their status as the global financial superpower.
Step 5. Balance budget, eliminate trade deficits, stop outsourcing
The father of free-market conservatism, Nobel economist Milton Friedman was right: Congressional spending is the big cause of inflation. Solution: No more deficit spending. Balance the budget, cool deficits, stop transferring America's wealth (and power) to Asia and nations with energy and natural resource reserves. All Americans better expect a major lifestyle change: Living within our means, something real drunks hate.
Step 6. Cycles happen, in economies, markets, politics. Accept it!
Conservative and liberal economic ideals run in cycles. Right now free-market ideologues drank too much, the bartender's cutting them off before they do another Joker imitation. Years of excesses pushed America onto the down side of the cycle, hurting economics, markets, policies. Solution: Tell the Fed to stop pandering to right-wing pre-election politics and get serious about inflation, like former Fed chief Paul Volker did back in the early 1980s.
Step 7. Reward savings, stop pushing consumer debt and spending
America has no savings policy. We are encouraged to spend, live the high life on debt, inviting disaster. Drunks love wasting money. Americans are now deep in debt. In one generation our savings rate dropped from 11% to below zero. Solution, new legislation: Increase tax benefits on savings, reign in credit-card-issuer excesses and limit card interest.
Step 8. Warning, Wall Street's been losing your money since 2000
Seriously, if you put $10,000 in the market in March, 2000 when the Dow peaked at 11,722, you've lost half your nest egg, adjusted for inflation. Wall Street's greed and drunken binge has distorted basic conservative principles, costing America hundreds of billions the past eight years. Solution: Forget the stock market. Read "The Millionaire Next Door." Build your own business. Buy real estate. Anything to avoid Wall Street.
Step 9. Stop degrading America's currency by printing money
Our blind free market obsession with "growth" isn't working, it's throwing jet fuel on inflation. Our dollar's lost value because myopic leaders are pushing short-term growth via a debt-funded trade policy that's killing America's long-term value. Solution: Stop funding the economy by increasing our debt to China and oil producers. Accept the fact that infinite growth is a quixotic fantasy in a world of limited resources.
Step 10. Free market health care fails 47,000,000 Americans
Big Pharma is gouging taxpayers with no-bid Medicare drug contracts. Solution: Open competitive bidding. The VA does it. With over $50 trillion unfunded liabilities for Social Security and Medicare benefits, we must reform this dangerous mess before it kills us. Besides, if conservative ideologues love the "free market" so much, why not compete for drugs contracts too? Unfortunately, self-interested drunks will steal for a fix.
Step 11. Conservative free-market policies inflated oil 300%!
Oil's inflated 300% in eight years. Solution: Stop digging supply-side holes. Focus on demand. Supply-side policies, like so many other distortions created by Wall Street's drunken binge, are killing American capitalism. Example: GM, the ultimate symbol of American capitalism, is near bankruptcy, turning America into a socialist economy.
Step 12. You tell us. Add a comment. What new policies do you want to work?
No whining and no attacking the other guy's ideas. Just comment on actions and policies you believe will work. Focus on solutions.