Interviewed by Real News, economics writer, Robert Kuttner, says the problem is that what the Administration is proposing are conservative solutions to radical problems. He speculates Obama is realizing the limits of bipartisanship in his attempt to make his stimulus package a reality. Kuttner states that Obama's economic team is trying to utilize the same methods to resolve the economic crisis that have led to the financial meltdown. He further argues that the plan put forward by US Treasury Secretary, Timothy Geithner, is a failure.
Obama is not a dummy. He can see what's happening. He feels a lot of pressure to produce and so, his strategy must evolve. It has to. The deteriorating situation will force him, as Lincoln's and FDR's did, to go further, to go deeper, and to try to leverage his power to be more effective. That is, if he can avoid the temptations to get more bellicose with Iran or sink into the "big muddy" of Afghanistan.
So, what can he do? To satisfy public opinion, and ease pubic pain, he has to go on the offensive against corporate crime and greed, perhaps with a “Blue Ribbon Commission” that can explain how this crisis evolved and come up with a plan to regulate the financial world. This has to become a topic in every school and home in America. If he wants the public to understand the need to support his programs, that public has to be educated about how this crisis happened. Our media is doing a lousy job in this regard.
Programmatically, there must be a moratorium on foreclosures because we are in a state of economic emergency. Credit card companies must be ordered to roll back interest changes, stop outrageous finance charges. Robert D. Manning, author of, ‘Credit Card Nation,’ argues:
"The credit card industry is the most unregulated sector of retail banking with an economic impact that could play an even greater role during this recession. With soaring interest rates driving tens of thousands of people into bankruptcy, the current credit card industry policies enable the affluent to, in effect, get free credit because they can pay off their balance each month. This means that poorer people end up footing most of the bill.
And, with usury laws basically gone since 1978, many people are stuck paying exorbitant rates for things they bought years ago. Without limits on fees and interest rates, credit cards have been the cash cow for the consumer banking industry. Even worse, right now, is that credit card companies are restricting credit. This could turn a bad recession into a wide depression."
Adds Vinod Dar: "Excessive debt must be repaid or repudiated, willingly or involuntarily. Denial and evasion can work for years for individuals, enterprises and municipalities and decades for state and Federal governments but eventually, the consequences become manifest. There is a last day."
Tinkering with this problem is unlikely to fix it. We need a cancellation of consumer debts or some program by which individuals can do public service to pay off bills they cannot afford to pay. This issue is finally moving into the mainstream thanks to Congressional candidates like Tom Geoghegan in Illinois who is raising it. We need a new
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