They Lost Their Way

Common Sense

"On the road from Glass-Steagall to Gramm-Leach-Billey, they lost their way, turning their backs on civilization, family values, and ethics; all those things they tell us are their core values."

"The Greatest Generation" is a term coined by journalist Tom Brockaw describing the generation who grew up in the United States during WW I, suffered in the Great Depresion, and and many of whom fought in WW II, while others supported the effort by working in factories, and paying taxes. Once the war was over, they supported the construction of highways, bridges, airports and port material handling systems that helped this nation sell goods to rebuild much of the world. At the same time, they paid taxes that enlarged universities that educated returning veterans and many others who contributed to the prosperity of all of us.

Not only did the greatest generation contribute to society, but many of their children have also, Warren Buffet, Bill Gates, and also many of our politicians.As Eisenhower had got us to invest in concrete highways, Al Gore took the initiative in creating the Internet and took the lead in moving forward a whole range of initiatives that have been important to our country's economic growth. Neither Portland cement highways, or electronic highways would exist without millions of taxpayers sharing the burden, and surely those same people and their children are entitled to share in the benefits of their sacrifice, they are entitled to share in the profits they made possible.

After the Great Depression banking officials realized that much of the damage of the depression was caused by banks gambling on stocks (creating a bubble) and the Glass-Steagall bill was enacted to protect depositors from bank failure by the creation of the FDIC, and limit the number of failures by forbidding commercial banks, that you and I need for our accounts, from acting as investment banks, buying securities based on toxic sub-prime loans with money we deposited. The law meant that the bnks we did not count on, the investment banks were not insured by us, and could fail. Banks saw this as a tax; you can make some money gambling with your own money, but you can make much more if you gamble with the public's money.

In 1999, the last of that protection was removed by the Gramm-Leach-Billey, introduced by Barney Frank (D) and Jim Leach (R), and signed into law by Bill Clinton. The "tax" had been removed, banks could gamble with money borrowed at low rates, but the risk to the public had been increased without any corresponding promise to share the profits. Economists like Kenneth Arrow offered to explain the risks and dangers of this "moral hazard" but there is less profit for the few in considering the risk to the public, so no one in politics was listening.

The Greatest Generation created an economy that doubled the median wage in less than one generation. The "Silent Generation" that followed them, quietly, without any public discussion of the risks to taxpayers, removed the protections and voices that the public depended on. Rather than crate wealth, they accumulated wealth by "taxing" all Americans with greater risk, higher banking fees (28% credit card interest rates) and finally, with the Great Recession when their greatest gamble, the sub-prime loan, burst. All of those profits were the product of investments by millions of Americans in good government, a condition denied them by the 1% who bent the rules to take all the profits from a doubling of productivity from 1970 to 2000. In return, they gave us credit cards with hig rates, and ATM machines.

Bad government is not a condition of size, it is a condition of leadership. No business would retain the services of employees who let departments fail to respond to the real needs of the customers who pay all the bills and we can no longer afford to "hire" representatives who will not "own" the agencies they manage. Tell us why we should be proud of your work, or go home.

This article is one of a series, "Common Sense" by

Harrison Picot

Independent candidate for congress in Virginia's 10th district

Here and at http://standupvirginia.org/

Who Pays for Taking Risks?

Common Sense

THE twelve members of the Congressional Debt Super Committee have basically one question to answer: who will pay for the excessive risk taking that only profited a few? Those who benefited from the risk taking, and dismantling of regulation that almost crushed our economy, the one percent with high priced lobbyists who are even now writing large checks to determine the outcome of the committee,? Or the vast majority of Americans who got no benefit from sub-prime loans or unregulated derivatives,?

INCOME rose for all Americans between 1947 and 1979. A generation in which the middle fifth (quintile) of Americans saw their real family income (adjusted for inflation) more than double, growing by 114%. The income of the top quintile saw their income grow by 99 percent (the top 5 percent "only" saw their income grow by 80 percent.) The income of the lowest quintile grew by 116 percent, removing millions of people from poverty, cutting the costs of welfare, and proving the value of education, even at the bottom.[1]

BETWEEN 1979 and 2005 elections moved from in-person speeches to high priced campaigns of slogans and tv ads. When Sen. John Stennis (D-MS) ran for election in 1976, he raised no more than $5,000 in campaign funds. In 1982 Republicans saw a chance to replace him with Haley Barbor, someone who could likely raise $2 million for a campaign that would wash Stennis away. Stennis was forced to raise $2 million to compete, and he raised much of that from giant corporations that received millions in Department of Defense contracts. Stennis won, but as Bob Dole told the Wall Street Journal that summer, corporations that donate large sums "expect something in return other than good government. Elections are now being paid for by the top 1 percent, and they don't expect to see the middle class to be getting the benefits.

REAL family income between 1979 and 2005 saw the lowest quintile lose 1 percent in income, the middle quintile gain 15 percent but all of that from more wives going to work (only rich women would now be able to stay at home and instill "family values in their children). The real income of the top 5 percent of Americans, those with family incomes of more than $180,000, had been increased by 81 percent.[1]

THE top one percent of Americans take home half the total increases in income each year, and yet their taxes have been cut by more than 75% since Ronald Reagan took office. The answer to who will pay for the lack of regulation that allowed so much gambling with the future of this country should be easy, but the majority of American citizens do not have lobbyists on Capital Hill, so the issue is in doubt.T

TheHill.COM: The Joint Committee on Deficit Reduction, meets today for the first time. Americans are rightly concerned that business-as-usual will dominate, including the outsized and damaging influence of special interests and wealthy campaign contributors. Committee members Reps. Dave Camp (R-Mich.) and Xavier Becerra (D-Calif.) both held fund-raisers yesterday. At least nine of the 12 members have fund-raisers scheduled over the coming months. Lobbyists have called the super committee a "lobbying bonanza".One even said his plan to prepare for the committee was to "write 12 really large checks." [2]

STAND UP to "business-as-usual", join with others in supporting real solutions to obvious problems, like ending the bribery of congress. Ask yourself, why your representative has not been as upset as you or most Americans and why he or she has not proposed a solution hat costs you less than bailing out the banks (a process that never ends). John Kennedy once said that if average Americans will not support representatives who share their values, the few rich who are concerned about the middle class will not be enough. Fair elections would cost you 7¢, a day. Ending the bribery of Congress costs much less than bailing out banks.

Harrison Picot

Independent candidate for Congress in Virginia's 10th district
http://standupvirginia.org/ and http://virginia10th.blogspot.com/2011/7-solution.html

[1] [http://standupvirginia.org/
2] http://thehill.com/blogs/congress-blog/campaign/180335-supercommittee-members-must-give-up-fundraising