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OpEdNews Op Eds    H3'ed 5/27/09

"Looting of America" Author Sees Opportunity in Meltdown

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Every time we've let money drift up to the top, in a very short period of time you go into a major depression.  That's what happened in the 20s and it's happened again now.  A disaster.  And there's no . . . one way to move money from the financial sector into the rest of the economy is to put a very small fee or tax (I call it insurance) on every single financial transaction.  So if people want to zing money all over the world in a hurry like every nanosecond, they've got to pay a little bit into the fund.  They want to do all these credit default swaps, or if we regulate them they'll come up with another way to do these kinds of transactions and bets of one kind or another or currency bets or whatever they want to do – every time you do, 0.3 of one percent of the value of the transaction goes into, you know, the public sector.  It pays us back for all the money we put in now and it protects us the next time around, and it helps move money from the financial sector into the real economy.  

There is no reason in the world why we should ever let a financial executive make, you know, $10, $20, $30, $50, $100, $200 million dollars for pushing money around.  I mean, it's been proven now that what they did had no social utility, and we're bailing them out.  Now.  Yet, all that, there's just no economic reason ever to pay people that much money for doing that kind of work.  It has to stop.  And the sooner we get there, the better.  

DS:  Well, I love Sam Pizzigati's idea of a maximum wage and even tying it to a minimum wage, and you mention such things in the book as well as raising the minimum wage and permitting re-unionization with the Employee Free Choice Act, creating single-payer health coverage, using progressive taxation, etc.  I mean, these seem like the standard left positions, but you're making an argument that all of these are needed to avoid financial disaster.  

LL:  Yeah.  I don't have to make this argument.  As a matter of fact, Sam is more radical than I am on this.  

DS:  He is, and I agree with him, but . . .

LL:  I'm saying we don't even have to think about doing this outside the financial sector.  If we just capped wages in the financial sector . . .

DS:  Right.

LL:  . . . president's wage cap.  To any institution that receives federal money or federal support.  That would be an incredible signal for people, you know, to start going into other professions.  If you want to, you know, earn a decent living don't keep thinking that, you know, you're going to graduate from college and in three years you're going to be making a million dollars.  I mean,  . . .

    And then the system crashes and we have to bail out your institution.  That doesn't seem like a very smart thing, smart way to run your country.

    So, I'm willing . .

DS:  So in the financial sector we cap salaries at the salary of the US president, and I would add to that that we limit radical increases of the salary of the US president because I wouldn't put that past anybody.  

LL:  Well, that would be very interesting.  But I, the point being is we're not talking about radical conservative here.  We're talking about do you want the system to operate, or do you want it to continually crash.  That, you've got to prove to me that you have another way to stop, I think that the burden of proof is now on the free marketers and the partial regulators.  You've got to prove to me that we're not going to, it's not going to, they're not going to work their way right around those regulations and we're going to be into, move into another crash.  

The sector is too big and there is too much money at the top of the income scale.  Until we do something about those two things, and if you don't like the proposals that I've put forward then come up with your own, but until we move money from the financial sector to the real economy, from the top to the middle and the bottom, and the tippy top.  I don't care about, you know, people making, you know $500,000 a year.  I'm not even concerned.  I'm talking about, you know, $10, $20, $30, $50, $500 million.  I'm talking about billionaires.  It's obscene to let that go on and it's not obscene just from a moral point of view.  It is dangerous, absolutely dangerous to our economy to allow that to happen.

And, look it's happened twice in 70 years, and with the interconnected global economy as it now stands, you know, it doesn't take much to disrupt it.  If we're going to keep letting it happen it's going to happen again with more severity.  And we're not out of this one yet.  We don't really know how we're going to pay it all back.

DS:  And I would just add I think it is as dangerous to our representative democracy as it is to the economy, and I think your book lays out an incredible vision and a wide range of systemic reforms that I'm wondering if there's anything you see on the horizon at the moment.  Have there been any bills introduced, are there any proposals that have the beginnings of any sort of legs that you would encourage people to support.  

LL:  Well, you know, there was talk of wage caps on Wall Street.  But, you know, the Obama administration is very reluctant to do it.  Congress is pushing harder.  You know, there's talk about dramatically limiting some of these derivatives.  Actually there's talk about product safety stuff, but, you know, there are loopholes in it.  

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David Swanson is the author of "When the World Outlawed War," "War Is A Lie" and "Daybreak: Undoing the Imperial Presidency and Forming a More Perfect Union." He blogs at http://davidswanson.org and http://warisacrime.org and works for the online (more...)
 
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