The Economy and Banking

By Carol L. (Shepard) Brouillet

We can have an equitable, full employment economy without inflation by reforming our banking system, investing in our infrastructure and human needs, enacting a moratorium on home foreclosures.

Our national debt is a great fiction that is used to justify the transfer of wealth directly from middle class America to Treasury bond holders. Printing money, a crucial responsibility of government, has been privatized through our banking system. Our commercial banks have been licensed to create our money out of thin air, as debt. The twelve Federal Reserve Banks that are empowered to regulate our private banks are privately owned by those banks. If we nationalize the power to print money and nationalize the Federal Reserve, we can use Greenbacks to pay off the national debt as it comes due, end the irrational boom-and-bust business cycle, end taxes on the middle class, fully fund a national healthcare program, public education, infrastructure renewal, and end inflation.

Corporate Socialism and Bailouts

We need to end handouts and giveaways to big corporations. Rather than turning the public funds trough over to the most politically connected corporations, businesses should compete on a level playing field. No corporation is too big to fail; it creates a serious moral hazard to permit criminal financial institutions to continue to operate when they know that the taxpayers are always willing to cover the "downside." We must stop allowing the banks and major corporations to help themselves to the public treasury through periodic bailouts.

Control over Corporations

Our largest corporations are controlled by families who control an outsized share of voting stock through family trusts and tax-exempt foundations. Publicly-owned corporations should not be at the mercy of a handful of powerful individuals. Corporate control need to be broken and decentralized.

Economic Regulation by Corporations

Corporations regulate most aspects of our economic life + where we work, which products we need to be self-assured and happy, the prices we pay, which products will be developed, where to direct foreign investment. It is the role of government to limit corporate size and power, ban false and misleading advertising, protect consumers and employees, and protect the environment, when corporate self-regulation unsurprisingly falls short.

Corporate Personhood

Corporations are treated legally as fictitious persons, granted all the privileges and none of the responsibilities expected of living, breathing people, by a multitude of dubious court decisions. We must strip corporations of their fictitious legal personhood. Corporations should be at the mercy of public law, required to serve the public interest, and be governed by narrowly-defined limited-duration charters.

Derivatives

Over-the-counter derivatives greatly exacerbated the 2008 financial crisis. They are an unregulated form of insurance that enable financial institutions, including hedge funds, with insider information, to loot the savings of small investors and pension-fund beneficiaries. Derivatives must be tightly regulated by the Commodity Futures Trading Commission or disallowed entirely.

Commodities Trading

Large financial institutions often wield their hefty reserves to artificially increase or decrease prices for important commodities including oil and wheat on global markets, enriching a few while forcing millions of the world's poorest people into starvation. National currencies can be "attacked," triggering highly destructive capital outflows and import shortages. Positions limits can limit trading to genuine actual commodity users. Ending commercial bank licenses to create money from nothing can greatly reduce their ability to gamble with America's wealth.

Competition

In America, the so-called "free market" is an endangered species. A handful of large corporations dominate our major industries + aerospace, pharmaceuticals, agribusiness, oil, consumer products, media, and retail + to name a few. We need to enforce antitrust law and stop megamergers. Large corporations need to be broken up into reasonable-sized companies to revive healthy competition in the marketplace.

Concentrated Wealth

Corporate America separates middle class Americans from their money with marvelous efficiency. Corporate wealth used is being used to maintain control over our economic and political life. The huge fortunes must be whittled down to size through taxes. The doors to economic and political opportunity must be opened to lower and middle class America. Cooperative businesses should be encouraged by government policy.

Small Business Regulation

Much of our regulatory apparatus has been hijacked by big business. Cumbersome regulations are often drafted to put big business at a competitive advantage over small businesses. Policymakers need to seriously consider the obstacles confronting small businesses today.

Tax Policy

Our tax code is so complex that an entire industry has grown to assist us in filing our taxes. The tax burden is centered on the middle class. Hedge fund managers collect billions while paying only a 15% capital gains tax. The tax code encourages the establishment of trusts and foundations, allowing for the hereditary accumulation of wealth and corporate control. Income and withholding taxes on the working poor discourage job creation. The tax burden should be largely shouldered by those who are most capable of paying it. Upper limits should be placed on income and fortunes to prevent any future accumulation of super wealth.