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Public Anger and Policy Re-set

2010/02/12

An earlier version of this post appeared as a comment to the NYTimes story on February 7, 2010 that Wall Street now backs Republicans.  Wow – it looks like the business of daring with derivatives using other people’s money connects with the political plasticity of financial affection.

[Edit note: The final edit to this post refined the paragraph beginning “How true” and items 1, 2, and 3 including additional links in item 2 regarding bank influences to restrict the SEC.]

Well, let’s not blame the political Janes for the ways of financial Johns.  Why not root out fundamental drivers that enable the organized control of courts and government in the interest of businesses?  (Politely discussed on Moyers/Journal — the technical political science term is fascism.)  One needed key is a law to undo the 1978 Supreme Court bankrate ruling that lets banks apply nationwide the laws of a state of domicile.  You say, so what?

Well, here’s something… this ruling means laws in, for example, California, Delaware, South Dakota, and Tennessee, which have almost no rate limits, apply US-wide.  It’s no surprise that these are favored states for incorporating bank credit card units.  Aha.  Anybody for 20% rates?  30% with fees?  Is there more?  Let’s see…

Hmm, there’s the bipartisan work in the 1999 Gramm-Leach-Bliley Act to undo the provision in the Glass-Steagall Act of 1933 that separated commercial banking (making loans) from investment banking (putting money into securities markets).  Fees — and also risks — are much higher in securities markets.  Today, John Reed, former Citibank chairman, now a citizen, says in Business Week that he’s come to see the 1999 undoing as a mistake.

How true.  With rates unleashed and banks able to link commercial and investment resources, banks left no stone unturned to bend government to benefit business – for example, banks put $40 million and eight years into lobbying for tougher bankruptcy law to protect their gains.  Business Week later reported tougher bankruptcy now makes foreclosure look better for borrowers in trouble.  That’s not so good for the system.  And yet, banking energy remains in force to make support wane for new US legislation to limit card rates to 15%, which is a major step to regulate systemically unhealthy bank behavior.

Then there’s the bit about the Commodity Futures Trading Commission (CFTC) being made toothless by being forbidden by Congress to require over the counter derivative instruments to be listed and reported.  And aha!  The hilarious part where investment banks no longer play with their own partnership funds but instead leverage investor cash… well jeepers, what’s a fella to do, except fleece the public at will, buy legislators and regulators of convenience, and then complain about nasty government interference?

The upshot?  The stupendous personal payouts to bankers stem from the gambling mindset engendered by the banker-built environment.  So rebuild bread-and-butter bank lending.

Cue all Tea Party Baggers – why not connect your grievances with government to the mind as well as to the heart?  Give life to a more powerful vision — drive both major US political parties into the light.

Despite the New Order of corporate personhood where corporations as creatures of law now occupy the same space held by people born of woman, organize voter drives and marches on the Mall so 61% of politicians can see that their real survival depends on using the cover you represent to take action to put our house in order for the people.  Here’re some ideas, possibly not yet typical of current Tea Bag thought, but they’re possible if one puts one’s mind to the task…

1.  Health Care?  There’s the proposed Health Care Act, called Medicare for All, so we all can see and afford our doctors of choice for better care, but it needs to do several things like…

  • Replace the Fee-for-Service built into the HMO Act of 1973 with tort reform and experience-based episode payments (see massmed.org);
  • Fund consults and coaching with patients for preventive, wellness, and dental care;
  • Reduce acute care demand and net health cost, and enable real patient responsibility, with regular risk assessments, healthy behavior credits, and ongoing preventive care benefits as pioneered by the Asheville Project, applied by employers like Hannaford Foods, and evaluated by top benefit strategists such as Dr. Mahoney of Pitney Bowes;
  • Require web-based transparency and comparability for prices and results by hospitals, community health centers (HRSA), practitioners and specialists, and drug companies;
  • Use interoperability technology from the US-wide VistA medical system built by the Veterans Administration (VA), linked with action alerts (SemantxLS) and collaborative primary and specialist teams to achieve less costly, more effective care aimed at each patient across regions, facilities, and incomes as in the Medical Village now emerging in New Hampshire’s KeeneVision2020, augmented by collaborative and consultative pharmacy oversight of patient-centric provider network medication; and
  • Monitor regional and US economic results for better jobs, wages, and job-driving competitiveness, due to increased productivity from reduced absenteeism and presenteeism as boosted by more work team cohesion, reliability, and training effectiveness, all being enabled by a healthier public, a healthier work force, and lower US-wide labor and social overhead burdens (see Health Productivity Strategy and DiseaseMgmtResources).

2.  Market oversight?  There’s restoring the spirit of Stanley Sporkin to the Enforcement  Division of the Securities and Exchange Commission (SEC), and applying modern technology to implement the SEC’s Market Oversight and Surveillance System killed by securities exchanges and brokerage firms back in the early 1980s under SEC Chairman John S. R. Shad, former vice chairman of E F Hutton and Co (sold to Citigroup bank, now Morgan Stanley Smith Barney).

3.  Energy-climate-transportation?  There’s applying simple, comprehensive carbon-based fees that then rebate to human people but not to firms so that rebalanced commodity prices will shape realistic new demands and supplies for energy and transportation.  Good policy reasons to apply carbon taxes are stated in EXXON CEO Tillersons argument for a carbon tax.

4.  Food-water-land?  There’s disconnecting corporate farming advocacy from the Department of Agriculture (USDA), and focusing on practices, standards, land and water use, food stamps (FNS), and quality oversight for nutrition, food, and reduced pollution.

Enough examples.  People of Tea, acting on practical steps like this list is the real stuff of revolution.  If you want to make a lasting difference in our lives, help us all cut the Gordian Knot of obscurity in a smart way to better align affordable government with real people.

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