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Voice of the Voter - This Week's Stories

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This page updates every other Wednesday

Repairing Our Economy Through Regulation

By most accounts the failure of the financial sector is in large part due to legislation passed under the Clinton administration that allowed consumer banks to become investment banks. This deregulation was an undoing of consumer protections that had been on the books for over 65 years. The Glass-Steagall Act in 1933 was passed to prevent this after the stock market crash and the Great Depression. The act was passed because in the hindsight of the collapse of the markets Congress recognized that something needed to be done to protect people from the greed of a few people that can lead to decisions with dire circumstances for the majority of Americans. With the collapse fresh in their minds there was a clarity of purpose that led to strong protections for consumers and limits on the conduct of business.

The Gramm-Leach-Bliley Act in 1999 undid the Glass-Steagall Act and let the kids loose in the candy store. Banks were now free to become very creative in how they improved their profits. They could turn their loans into commodities that were traded on the open market regardless of the financial strength of the loans. When the market was booming, CEOs and other executives were being paid in the tens of millions of dollars with contracts that gave them every benefit and afforded them no risk. Bill Clinton and the Republican controlled Congress had let loose the floodgates of unsustainable profits and false hopes. Bad investments on shaky foundations with the full support of the federal government were unleashed on unsuspecting Americans.

Under the Bush administration the Republican led Congress passed further deregulation making it easier for banks to operate below the radar and not disclose their true financial situations to the public. These kings of Wall Street now had the means to risk the money of their investors without accepting any personal risk in the process. Because of a lack of oversight, $50 billion pyramid schemes went on for years in full view of the public without any intervention by the bodies formed to protect the people from just such schemes. Congress and the White House gave the keys to the castle to the very bandits looking to rob the castle. The bankers and their representatives directed the form of the legislation and Congress happily went along as long as the campaign contributions kept coming.

Now itís 2009 and the check is due. All of the bad decisions of the past ten years have come home to roost and the American people are the ones stuck with the check. The bankers have gotten their billions and put them away while the rest of the people lost their shirts behind their bad decisions. As the markets collapsed under the weight of fundamentally unsound investments companies cut costs by laying off workers. As those workers got laid off they defaulted on their mortgages and those mortgages that were the foundation of the investments that were causing businesses to lose money. The vicious cycle of greed and loss has gotten to the point where the federal government has had to pump billions into the financial industry to keep it from collapsing but still those at the top have been cashing in like there is nothing out of the ordinary with the markets. The Dow has dropped to its lowest level in over a decade and still we hear of huge bonuses being paid to executives. The question we have to ask is why? They certainly didnít make the company more profitable. They lost billions and then paid themselves bonuses for doing it. Something has to change.

The 2008 election should have sent a message to Washington. Weíre tired of being the stepchildren of the legislative process. The people who have gotten rich on our hard work have not had to feel any of the pain for their wealth. Itís time for that to change. We need to hold their feet to the fire and make them give up their ill gotten gains. The basic truth of the matter is that despite the fact that what they were doing was technically legal in many cases it was wrong. Congress was wrong to pass the bills that let them do it, the Presidents were wrong for signing the legislation and itís time for those wrongs to be righted. Our current Congress must repeal the Gramm-Leach-Bliley Act and implement real protections for consumers against this kind of abuse of our system. There need to be laws governing how bonuses are issued, how much control executives have over their own compensation, what level of risk firms are allowed to take with their customersí money and what constitutes reasonable compensation. There also need to be stiff penalties for those who abused the system holding them personally accountable for their actions. As our representatives Congress needs to fight for the majority and tell the minority that got us into this mess that they are not beyond accountability.

By taking back the money essentially stolen from the American people, pumping it back into the economy and passing laws to assure that the things that got us into this mess cannot happen again, we can emerge solidly from the current economic crisis. Once that is done we need to turn our full attention to reforming lobbying in Washington. Make no mistake that these laws would not have been passed without the influences of lobbyists. Wall Street is nervous and the markets are dropping right now because the wealthy are nervous that President Obama and the Congress are about to clamp down on their corruption. They should be worried but average people should not. These laws will protect us just like the original 1933 Glass-Steagall Act protected us. While the markets fluctuated in the time between 1933 and 1999 there were protections in place that kept all the eggs from being in one basket and kept the whole thing from collapsing due to foolishness and greed. We need those protections back and we need to this time learn from history. Congress did not learn from our mistakes of the 1920ís and 1930ís when they passed the Gramm-Leach-Bliley Act but they can correct that mistake by repealing it.

Troy Wilson-Ripsom - Staff Writer | E-mail Comments on this article. | Click icon to Digg this article

Executive Compensation and Layoffs in America

Last Tuesday night President Obama spoke about a noble man from Miami by the name of Leonard Abess who cashed out of his company receiving a $60 million bonus. He took that bonus and gave it to his workers. Shouldnít other American executives take a pledge to follow that example and set aside their bonuses to prevent further layoffs in this bad economy?

How much is enough money to earn in one year? Why canít every American executive take a pledge to limit their total compensation to no more than $500,000 per year retroactive to 2008 and continuing until this current economic crisis is over so that more employees can keep their jobs and weather this storm? Executives have asked the employees to make sacrifices and take on extra responsibilities while there are still people at the top of companies who have not made any substantive sacrifice that they will in fact feel on any real level. Some executives have said they wonít take salary increases but what about cutting their salaries a bit for the betterment of their companies overall? Companies are becoming top-heavy and that cannot be good for their long term fiscal health unless those executives are investing or spending the vast majority of their incomes in the communities served by the companies.

If the people making large salaries are saving the majority of their money they are actually hurting the economy by removing cash from the active monetary flow that sustains our economy. This is a consumer based economy and spending is its lifeís blood. How about flipping the bonus structures so the people at the bottom can receive up to 30% salary bonuses and the people at the top have their bonuses capped at 5%? The people at the bottom will actually spend their money and stimulate the economy which benefits everyone and if executives publicly shift bonuses from executives to workers and use capital savings on executive compensation to save jobs it will put pressure on other companies to do likewise and improve the image of the companies that do it with the public likely increasing their market share. That would in turn negate the need for job cuts to improve profitability as market share increases related to increased public good will toward those companies would occur. Has anyone seriously considered giving more to the workers without whom companies would not function and tightening the belts of those who direct from above? It would yield benefits and restore faith in the decency of people of means which is very damaged at the moment in our country.

CEOs and CFOs across America should also be mindful of history when making their financial decisions in the coming months and years. When the gap between rich and poor becomes too great and the working middle class breaks down, revolution occurs. This is a fact of history. Eighteenth century France and twentieth century Russia are prime examples of what kinds of conflicts arise when there are broad divisions between those who have and those who have not. There is a tolerance level for inequity in any society past which the societal morays break down and people who once would never have considered violence become so desperate that they abandon their peaceful natures and seek out sustenance no matter the means required to obtain it. That breakdown begins with people losing their means of support through legitimate avenues of employment.

Iím sure that none of the executives wants to hear these things but they need to know that the American people are reaching the point of losing all faith in the ability of corporate executives to make fundamentally sound decisions. Whether justified or not the perception is that their decisions are based on personal greed with a total disregard for the well being of the people that they oversee. When we hear that AIG handed out billions in bonuses while crying poor to the federal government and laying off workers it strengthens the perception that corporate executives simply donít care about the working people of this country. The onus is on the executives to restore trust and faith in their judgment and basic human decency. It is time for the people in charge to step up to the plate and take bold measures to show that they are worthy to lead. The people have worked hard and done our part to keep the economy strong but we cannot support the nation if we donít have jobs and those who have excess wealth need to understand that we are not the least bit sympathetic to their cries of hardship when their hardship is merely less excess and our hardship is fighting for survival. We simply donít believe any longer the claims that executives deserve to earn millions when they have been the architects of our current economic chaos. When they can right the ship of our economy as a group they deserve a pat on the back and a handshake for fixing what they messed up but really no more than that. The workers didnít choose to invest in risky investments. We just kept doing our jobs. We didnít lobby Congress to deregulate the banks so we could repeat the mistakes of the 1920ís. We just worked our tails off for the company every day. We are suffering for the bad decisions of those at the top while they get huge bonuses. Why is that?

Need should always supersede greed in decision making. If you can afford to go with less so that someone else can merely have enough to survive it is your duty as a decent human being to do so. If you cannot put aside your luxuries for the survival of another human being then you are not deserving of those luxuries. Preaching the importance of sacrifice and actually leading by example are two very different things. The challenge to the wealthy has to be laid down to put their money where their mouths are and make real sacrifices themselves before asking for any more sacrifice from those who are of lesser means. That doesnít mean cutting out caviar, that means giving up enough of your salary to make sure that some other people can keep their jobs when you make enough to sustain several families every year. Nobody is going to really suffer in this country only making half a million dollars in a year but a lot of people could benefit if for a couple years nobody made more than that and the surplus money was redirected to the working folks whose work actually made the rich folks rich in the first place. The question is whether the people at the top have the decency to really sacrifice for the good of their fellow man or if they are all just completely self-absorbed and will let the unwashed masses starve while they live it up in their ivory towers.

The Realist - Patriot at Large | E-mail Comments on this article. | Click icon to Digg this article

Get Involved

Do you sit and yell at the TV when politicians come on? Do you shake your head sadly whenever you see a homeless veteran? Is that all you tend to do?

It's time to put up or shut up America. We all love to talk about how we could do things better or how we would do it if we were in charge. Well, it's time to put your money where your mouth is. If you can think of it, you can write it down. If you can write it down, you can type it. If you can type it, you can e-mail it and if you can e-mail it, you can send it here.

We at Reform America are committed to giving voice to anyone who wants to put their ideas out there to make our nation a better place. As the readership grows, we are able to take those views to a wider and wider audience. Grassroots campaigns begin with voices speaking out. You have opinions. Voice them. We aren't about conservative or liberal. We aren't about pro-this or anti-that. We're about Americans and the First Amendment. Reform America is about politics by, for and of the people. You are the people. You only need to speak up. America is listening. Send your article to:

Have You Been Downsized Due to Outsourcing?

For several years now we have listened to some within the business community tell us that America can't compete on a global scale unless they send our jobs overseas where they can be done cheaper. The question becomes, if we don't have good paying jobs here, how can we sustain our own economy? We want to hear from you. Have you lost your job? Have you been forced into a lower wage job due to outsourcing? Has outsourcing been a success for you? Did you end up in a better job?

Tell us your story so we can make sure the politicians see how outsourcing really impacts the workers who are backbone of America. Send your story to


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