PUBLIC ADVOCACY: Part ll : A Conversation with Joseph Stiglitz

Joseph Stiglitz

Inequality, Corporate Welfare , an in balance in our Political Power has occurred as the Silent Majority remained Silent.  With the coming correction in the Market, the Middle Class may finally get a chance to have a seat at OBAMA’s Table.  Let’s decide what’s important to US and ask for a “change in the laws” creating a more equal balance of power.    This may be our “golden” ticket out of stagnation paving the way towards Middle Class sustainability?

  • When Davidson (see NY Times article by Gretchen Morgenson previously cited) , was denied the right to question compensation at Chase, why didn’t other shareholders join the “fight for accountability”?   Are the Banking leaders beyond reproach or accountability for their actions.   Have they earned their enormous compensation packages?  According to the NY Times on 3/14/14, claw backs, are being considered  in the EU & UK to curtail risky trades leading to losses.  The  Banks original mandate was:  take in deposits and lend money against those deposits.  No “fancy” products.  A simple system.  Yet, this responsibility to Banking customers has been abrogated, as the Banks, seek higher profits and risk.  The flow of credit to small and medium sized businesses has decreased 20% according to Stiglitz.  Apparently , small and medium size business loans are too “risky”?

But,  in their quest for higher profits, Banks participate in trades and leverage, that is truly risky.  TBTF has become Too Big To Manage.  Those “deals”, deemed too risky, even for Banks, have  now been shifted to Equity Firms, like Apollo and Black Rock, who control Trillions of assets: ranging from loan portfolios, mortgages, real estate, commodities and other debt obligations, including derivatives.  Since these entities are not Banks, they are “lightly regulated”.   What happens when the Market Corrects?  It is Joseph Stiglitz’s fear, that they will request the Middle Class to bail them out once again.  To his knowledge, there is no mechanism in place to wind down the Banks.  He thinks, the Market is a Casino, capable of taking down the Monetary System, once again.  However; this time, I propose that the Middle Class has a seat at the table, when the fate of Banks, Bankers and Corporations are to be bailed out a 2nd and last time.    Emulating Buffet, The Middle Class should extract  changes in law and compensation for 6 years of stagnation, creating a Blueprint for revenue generation through the following reforms and legislation.  What do you think, dear reader?

  • Financial Reform :  Cap on Executive Compensation, Bank risk to be paid for by Executives.  Separate Banks from preforming proprietary trading, which is really Insider Trading, from Customer accounts.  Eliminate products that cause a conflict of interest.
  • Interview with John Reed/Bring back Glass Steagall
  •   Equity Firms controlling Trillions of assets to be regulated similar to Banks.
  • If and when the Banking sector has to be bailed out:  consider an equal bailout of Student and credit card debts.
  • Restructure mortgages to reflect  appraisal levels, independent of the Equity Stakes in the neighborhoods.
  • US housing: Content to rent? -- By Anjli Rava Financial
  •  Times/investors vs home ownership Read the full article at:
  • Target “rent seeking income” for tax reform.
  • Financial Times,  Dave Camp tax plan cuts through web of US interests
  • -- By James Politi in Washington -- A Republican tax reform plan, basis for debate Read the full article at:
  • Financial Times  Nine private equity founders share $2.5bn payday -- By Henny Sender -- Reason to convert carried interest, to taxable income! Read the full article at:
  • Encourage competition by breaking up Monopolies.
  • Stop Corporate tax breaks at the expense of the Middle Class.
  • This is a beginning.
  • Promote job training and education for new “skills” for new jobs.
  • Overturn Citizens United.    No more Supreme Court for the Big Corporations and Big Money?

I’m Mad as Hell!  What about you?  How long will the Silent Majority remain Silent?

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