Friday, 09 July 2010 00:00
In late 1965, Ralph Nader published Unsafe at Any Speed, exposing how and why the auto industry evaded building basic safety features into their cars. By the middle of 1966, despite fierce industry opposition and a national campaign to smear Nader, Congress had passed the Highway Safety Act and the National Traffic and Motor Vehicle Safety Act. That’s why we have federal safety standards for our cars and major roads. Contrast that with today. Two years after the Bear Stearns collapse, Congress hasn’t passed financial reform legislation, and the pending Dodd-Franks bill leaves large swaths of our problems untouched.
The Banking Act of 1933 (“Glass-Steagall”) safeguarded deposits and stabilized the American banking system for more than six decades, until significant portions were gutted during the Clinton Administration. Glass-Steagall was 37 pages long when it was passed, less than one-fortieth the length of the current, weaker, inadequate “financial reform” bill.
There are still $700 trillion in collateralized debt obligations, asset backed securities, credit default swaps and other derivatives floating around worldwide portfolios. That’s 10 times the value of all goods and services produced in the world. A failure rate of 2 percent would wipe out, on paper, $14 trillion, the annual value of the U.S. economy.
Only nine states make up a majority of the U.S. population. Those states are represented in the Senate by 12 Democrats and six Republicans. Only 37 percent of our population is represented by a Republican Senator. Yet, national Republicans insist that it is their way or no way.
2,360 years ago, Aristotle wrote that to rule and to be ruled in turns was a basic principle of democracy and of liberty (Politics, Book Six). This country’s Founders were steeped in classical education and history. They took Aristotle, and a bunch of other guys in togas and tunics, seriously. Rule and be ruled in turns. An American founding principle.
The ability of the North Americans to develop their own industries and manufacturing base, rather than remaining dependent on factories in Britain for finished goods, was a large part of the dispute between the American colonies and the King of England. No country has continued to thrive after its manufacturing and industrial base was shipped overseas. I’m just saying. Some Americans are upset that the Census Bureau wants to know more than how many people live here, and have refused to answer any other question. FYI, India has started its census process, which will be completed in 2011. Every one of the more than one billion residents will be fingerprinted and photographed. The census will collect information on a wide variety of topics, including the proportion of bank account holders and cell phone users in each household, and even details on each house, including construction materials and the availability of running water.
During a Congressional hearing last week, a Bank of America officer said this: “Given the depth of the nation’s recessionary impacts on homeowners, a considerable number of customers will transition from homeownership over the next two years.” Transition? Something important had been lost in American society.
In early June, applications for loans to purchase houses fell to the lowest level since February 1997.
According to a recent IRS report, the annual income of the 400 wealthiest American families increased by 31 percent from 2006 to 2007. The average increase was $81.5 million, for a total average income of $344.8 million per family. At the same time, their effective tax rate (the actual rate paid after all deductions and offsets) was a record low 16.62 percent, which is lower than the rate paid by most Americans. No press release or announcement accompanied the IRS report (Tax Analysts Doc 2010-3372).
A recent worldwide study by Merrill Lynch and Capgemini found that the assets of the very rich (those with disposable wealth over $30 million) increased in value by 21.5 percent in 2009.
Starting this week, the City of Yonkers cuts garbage pickup to once a week, due to layoffs. Residents also have to cart non-metal bulk items to the city dump, or pay a hauler to take them away. I’m just saying.
Michael Miller is a freelance writer, designer and strategic consultant who has worked in state and local government. Email: firstname.lastname@example.org