He has a grand undertaking before him. He must take command, immediately, over what is his FDR moment left to him to clean up after an over-inflated, egotistical, Texas-swaggering buffoon and his "leprosetic" political regressive comrades made a dastardly mess.
Barack's challenge is unprecedented for our time and is colossal in scope. This new president has to prioritize the initiatives he will determine to be of the greatest importance.
For many of us the most critical concerns are as follows: the economy, the growing unemployment rate, and the housing meltdown. All three of these crises are intertwined. Later can come a fix to the health care debacle. But that is not the priority as is the economy and those pieces related to it.
The economy is losing jobs because consumers are spending less because they have lost their job or their home, or are in significant debt, or have lost their life savings because the financial industry has the credit market frozen up resulting from its own economic implosion. Or, all of the above!
20% of all mortgagees owe more than their home is currently worth. 7 million homeowners are behind in their payments. 18% are underwater. 5-8 million homeowners can no longer pay their mortgage obligations. There has been a $5 trillion loss in homeowner wealth due to the bursting housing bubble, which is like having around $700 billion pulled out of circulation, ie. spending.
Consumer spending dropped 0.3% in September. The U.S. economy shrank by 0.3% in Q3. Consumer confidence, in October, fell to 38 points the lowest reading on record--EVER, as reported by Wachovia. This was the biggest one-month drop since 1978. The collapse has delivered the biggest fall in spending by consumers in the past 24 years.
October stock market paper losses amounted to $2.3 trillion. Since September, the global equities market lost $16 trillion.
Just since January, 2008, the U.S. has lost 750,000 jobs, and the numbers keep rising. The U.S. may see close to 1,200,000 jobs lost for the year alone. Currently, there has been 10.2 million jobs lost, thus far under this president!
While all of this unraveling is going on, Bush delivered a Banksta Gangsta Pardon to all his financial devotees on Wall Street. This president has formulated a method to deliver "no-risk capitalism." (Naomi Klein, "Bailout=Bush's Final Pillage". 11-3-08, Huffingtonpost.com). He has told Paulson to create the opportunity for the biggest banks to consolidate their wealth and power through mergers with one another. This occurred in 1929-1931 as J.P. Morgan consolidated his financial power and wealth. And, look at J.P. Morgan-Chase today!
Naomi Klein says that this bailout's purpose is to protect the wealthy, yet skittish investors by tying these private companies to the taxpayer by offering a no-risk, and safe investment the public would cover, yet without any investment stake, with a voice or vote. "It was always about turning the state into a giant insurance agency for Wall Street--a safety net for the people who need it least, subsidized by the people who need it most."
President-elect Obama should immediately call for a freeze on the issuance of the bailout funds in order to re-write the rules of delivery, ownership stake and purpose.
A plan for these funds should be established to stabilize the housing collapse. This would be a challenge because of the complicated bundling of mortgages. No one really knows who actually owns the originally written mortgages. Nevertheless, this must be done, otherwise we will likely see $12 trillion in housing bubble wealth disappear and empty houses littering our neighborhoods.
Obama needs to propose a bill that re-writes the tax codes, at least, to collect on the $300-600 billion in off-shore tax dodges used by the top-tier wealth accumulators.
As FDR did, we need to use the debt to finance a Ground-Up works program. If this isn't done immediately then a depression might not be diverted!
By using the government to direct massive public works and service programs, through rebuilding and repairing the nation's infrastructure and schools, to institute a Green Energy works program, such as contracting with homeowners, commercial property owners, etc. to erect solar panel systems on those roofs that could immediately tap into the existing power grids. The same goes for wind generators. Also, to give grants to convert cars to electric power, and subsidize public transit riders with tax credits or vouchers. Offer grants to local communities to put empty land back into agricultural use by making it worthwhile for local farmers to grow more vegetables instead of feed corn and livestock feed grains, which could be sold locally.
Also, create initiatives for innovative Greener public transportation systems wherever it would be efficient and highly used.
By seriously and drastically reforming the financial and tax systems, and begin a government funded and directed Trickle-Up public works and services initiative, and a homeowner's stabilization plan, the nation would get back moving in the right direction.
Those who say we cannot afford it; my answer is that we cannot afford NOT to do it, otherwise this economic crash could later become a depression lasting a very long time. At that point, out of desperation the ideas mentioned above would have to implemented. But so much time would be wasted, and so much damage would have been made worse.
Our debt to GDP cannot be our biggest concern right now. If we get real reforms implemented, along with public works initiatives that can stimulate new industries, our debt to GDP would improve and the trade deficit would decline because we would be using less foreign oil, auto parts and purchasing fewer foreign cars. By retrofitting existing cars to electric power, the trade deficit would decline.
I have proposed an outline, which is not unlike what many others have proposed who have the same vision for Obama as I do. This must be put into place now. It cannot wait. It is time to push the Congress to move on these reforms and initiatives even if Bush is not on board with it.
Thanks for reading, jerry
