Should American Progressives Be Calling for a “Public Option” in Banking?

November 30, 2011  |   Economics & Trade Politics and Policy Progressive Political Commentary

Should American Progressives Be Calling for a “Public Option” in Banking?

Proposals for a public banking option are almost unheard of in the U.S., where free-market orthodoxy has, throughout most of our history, held sway over collective approaches to the provision of public and private goods and services. Nonetheless, the concept deserves serious consideration based on the evidence in at least a couple of areas. First, there is the striking success of this model in other advanced and advancing economies for providing and directing lower-cost, long-term capital essential for growth. And second, while better financial sector regulation, oversight, and enforcement might mitigate the worst excesses of an opaque multinational private banking system, it remains doubtful that the resources of regulators can ever match those of the private banking system to circumvent regulations and evade the consequences of wrongdoing. It is now widely understood that the private global banking and financial system has failed to serve the “real” economy, or what we often call, “Main Street.” This is not just the case in the U.S. Europe’s problems, while largely due to an ill-designed monetary union and the high sovereign debt of certain member countries, has been exacerbated by the same short-term-profit-driven, casino approach that has characterized the U.S. financial sector. Perhaps the time has come to consider another model, one that treats banking and finance more like a public utility. A public bank would not have to be beholden to shareholders demanding a 20% annual return. It could circumvent incentives that induce management to take extraordinary risks (cognizant that in the worst-case

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The U.S. Postal System Crisis: Product of Conservative “Reform”

September 27, 2011  |   Politics and Policy

The U.S. Postal System Crisis: Product of Conservative “Reform”

Today, the postal unions representing America's postal workers is organizing a nationwide "Day of Action" to save the US Postal Service (USPS). National news media have reported extensively on the budget crisis facing the USPS, but has done a typically abysmal job of explaining why the crisis exists. These are the facts... Republicans, with the support of the Postmaster, are demanding service cuts and layoffs due to the U.S. Postal Service’s (USPS) inability to fund $5.5 billion due on September 30 to its federal retiree health fund. The expected 100,000 layoffs, in addition to exacerbating an already grim unemployment picture in the U.S., will hit African-Americans and veterans particularly hard – two groups that already have much higher unemployment rates than the national average. But apart from the employment issue, we need to be asking why the USPS is in such dire straits in the first place. The biggest budget problem by far facing the USPS is the mandate placed on it by an outgoing Republican congress in 2006, requiring USPS to pre-fund, over a decade, its employee pensions for 75 years. The USPS is among a handful of employers still offering a defined benefit pension plan that provides real security to retirees after a lifetime of work. The pre-funding requirement, never asked for by the postal unions, was and remains a poison pill for a federally run postal delivery service. No other pension plan, either public or private, is required to pre-fund pension obligations for 75 years into the

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Economic Discontent and Conservatives’ Secret Weapon to Win the Class War

September 25, 2010  |   Economics & Trade Politics and Policy

Paul Crist August 13, 2010 Framing the Issue: Class War The white-hot anger on the “Tea Party” political right and the frustration on the political left largely spring from the same fundamental problem: A generation of increasing economic inequality, job insecurity, loss of privilege, and a once optimistic middle class that is under attack and demoralized. Political and mainstream corporate news media leaders avoid the term, but what we are confronting is class warfare in America.  The conflict is essentially between the owners of capital, and the owners of labor.  The battle lines are less clear than in the past, but this is not the first time in our national history that we’ve been here.  In the late 19th and early 20th century, there was only a small middle class relative to the population.  The period from 1940 to the 1960’s saw a tremendous growth of a middle class that, while their principal asset remains labor, also holds some capital assets (home equity, stock ownership, and retirement funds) that they fiercely desire to protect.  That has helped society’s true economic elites to enlist a substantial subset of the middle class to espouse a capitalist ideology that is largely in opposition to their real economic interests.  Asset price bubbles during the past several decades helped to strengthen the ideology of wealth acquisition through capital ownership among middle and working classes, but the bursting of the housing price bubble and consequent financial crisis has been a major blow to the middle class

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U.S. Trade Policy and Declining Manufacturing: Where do we go from here?

September 25, 2010  |   Economics & Trade Politics and Policy

The U.S. economy and the manufacturing sector in particular, face both short-term and long-term challenges.  There is debate about whether government can or should play a role in addressing those challenges, and if so, what are the fiscal, industrial, regulatory, and trade policies that would benefit the stakeholders, which essentially include all U.S. citizens in one way or another. I should acknowledge at the outset a bias toward thoughtfully considered government interventions to guide the economy and trade in ways that benefit American workers and allow them to participate in the gains that accrue from their labor.  There are economic reasons for my bias that have nothing to do with either socialist or altruistic impulse.  That bias in no way means that I favor protectionism or a retreat from global trade, or that government intervention in the economy is always desirable, but there are, I believe, issues and stakeholders that get too little consideration and solutions to structural economic problems that are given short shrift in the name of conservative ideological orthodoxy. There is ample evidence that without adequate and well-designed regulatory intervention in domestic and global markets, capital and political power tends to migrate upward and become concentrated at the top of the economic ladder. We see that phenomenon in country after country, most recently in the U.S.  Concentrated wealth becomes problematic when it undermines social cohesion and a sense of shared purpose.  The wealth/income gap is at the core of social and political stress and instability in most

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America’s System Failure: Only a Wave of Democratic Participation Can Save This Country

August 8, 2010  |   Paul Crist Politics and Policy

 I didn't write this... but posted it because it is well worth reading! America's System Failure: Only a Wave of Democratic Participation Can Save This Country As welcome as it was, the removal of George W. Bush was not enough to cure what ails us. It goes to the root of our political system. by Christopher Hayes  February 3, 2010 There is a widespread consensus that the decade we've just brought to a close was singularly disastrous for the country: the list of scandals, crises and crimes is so long that events that in another context would stand out as genuine lowlights -- Enron and Arthur Andersen's collapse, the 2003 Northeast blackout, the unsolved(!) anthrax attacks -- are mere afterthoughts. We still don't have a definitive name for this era, though Paul Krugman's 2003 book The Great Unraveling captures well the sense of slow, inexorable dissolution; and the final crisis of the era, what we call the Great Recession, similarly expresses the sense that even our disasters aren't quite epic enough to be cataclysmic. But as a character in Tracy Letts's 2007 Pulitzer Prize-winning play, August: Osage County, says, "Dissipation is actually much worse than cataclysm." American progressives were the first to identify that something was deeply wrong with the direction the country was heading in and the first to provide a working hypothesis for the cause: George W. Bush. During the initial wave of antiwar mobilization, in 2002, much of the ire focused on Bush himself. But as the

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