http://www.zerohedge.com/news/2012-11-12/william-cohans-economic-dream-team-bowles-spitzer-reinhart
( An example of what Obama won't do.... )
Submitted by Tyler Durden on 11/12/2012 08:04 -0500
( An example of what Obama won't do.... )
William Cohan's Economic Dream Team: Bowles - Spitzer - Reinhart
With everyone convinced that it is only a matter of time before Larry Fink steps into the office about to be vacated by that walking 1040 disaster, Tim Geithner, thereby allowing the man who many say is the shadow king of Wall Street to define US policy for another 4 years (because Wall Street's complete dominance of US politics since JPMorgan's bailout of the US government is certainly not enough), there is still time to consider alternatives to a position that will make sure the only class to benefit from "four more years" are the uber wealthy (even as entitlement policies keep the uber poor at least content). Today, Bloomberg columnist William Cohan proposes his economic dream team, which far from perfect, will at least, superficially, assure that Wall Street won't come first and foremost when policy considerations are discussed. The names: Treasury Secretary: Erskine Bowles; SEC Chairman: Eliot Spitzer; National economic advisor: Carmen Reinhart.
From William Cohan:
President Obama, the time has come for you to do in your second term what many people hoped you would do in the first: Institute meaningful reform on Wall Street. An essential first step is to sweep out the remaining vestiges of the Rubin- Altman nexus. Bring in a new group of people who not only understand how Wall Street really works but also have dedicated much of their lives to changing it.
Who might some of those people be? For Treasury secretary, the best choice is Erskine Bowles, who has distinguished himself as co-chairman of the National Commission on Fiscal Responsibility and Reform. Although it is true that Bowles was chief of staff to President Bill Clinton, and thus rubbed elbows with Rubin and Altman, he isn’t in that Rubin orbit. He understands Wall Street -- he founded a small eponymous investment bank and a private-equity firm, Carousel Capital, and was a partner at private-equity giant Forstmann Little & Co. -- and did a fine job serving as president of the sprawling University of North Carolina system.
More important, he has spent the past year shaping his commission’s report -- despite Obama’s having ignored it -- into legislation that Congress can take up immediately to try to resolve the budget deficit and the looming fiscal cliff, the more than $600 billion in tax increases and spending cuts scheduled for next year. He has a proven record of bipartisanship, working well with Alan Simpson and the other Republicans on the commission. Appointing Bowles to Treasury would show that Obama is serious about getting the country’s fiscal house in order and finding a more productive relationship with Wall Street.
To address the vacuum of accountability on Wall Street, Obama should appoint former New York Governor Eliot Spitzer as the new chairman of the SEC. I’m not joking. Having prosecuted Wall Street misdeeds as New York attorney general a decade ago, he knows where the bodies are buried and won’t be afraid to dig them up. As a cable-television host, he has proved to be the news media’s most aggressive and informed critic of Wall Street. The question, of course, is whether the president would nominate him and the Senate would confirm him given his humiliating fall from grace in a prostitution scandal. My reply: Is only Bill Clinton entitled to political resurrection?
To replace Sperling, who has had more lives in Washington than a Persian shorthair, Obama should recruit Carmen Reinhart, a highly respected Harvard economist with an up-from-nothing personal history that rivals the president’s own (her family fled Castro’s Cuba with little more than the clothes on their backs). That she has a keen understanding of how economies get into financial difficulty and how they get out of them -- she is the co-author, with Kenneth Rogoff, of the best-seller “This Time Is Different” -- is a huge plus. And she calls things as she sees them: Although usually considered to be on the right of the political spectrum, she was a strong detractor of Romney’s mathematically illiterate tax plan.
In his victory speech, Obama said, “You voted for action, not politics as usual.” It was similar to the refrain he used four years ago, before disappointing us with politics as usual. By choosing Bowles, Spitzer and Reinhart as the anchors of his new economic team, he could start proving that this time really is different.
and.....
http://www.businessinsider.com/why-occupys-plan-to-cancel-consumer-debts-is-brilliant-2012-11
A new initiative is re-energising the Occupy movement. Called the Rolling Jubilee, it is a plan to use money from donations to buy distressed consumer debt from lenders at a marked down price, just as debt collection agencies normally would. But instead of hounding debtors for payments, it will simply cancel the debts. The hope is that the liberated debtors will themselves contribute to the fund, "rolling" the jubilee forward.
The Rolling Jubilee is a genius move for several reasons. First, debt relief is a transpartisan message that eludes conventional political categorisation. As such, it returns Occupy to its origins as an advocate for the wellbeing of ordinary people, neither leftwing nor rightwing. The Rolling Jubilee says, non-threateningly, "We just want to help people in this unfair system."
But despite its non-threatening appearance, the Rolling Jubilee has significant transformative potential. Two pillars uphold the present debt regime: the moral legitimacy of debt in society's eyes, ie, the idea that a person "should" pay back what he owes; and the coercive mechanisms that enforce repayment, such as harassment, seizure of assets, garnishment of wages, denial of employment or housing, and even imprisonment. The Rolling Jubilee erodes both. It destigmatises debt by saying, "we're all in this together, we believe your situation is unfair, not shameful, so we're going to help you out". And it lessens the severity of the consequences of default. If defaulting means you might get bailed out, why keep paying?
For this reason, we might expect lenders to balk at co-operating with the Rolling Jubilee, perhaps by refusing to sell loans to anyone who doesn't agree to seek collection. So here is a third reason why the idea is so brilliant: if the lenders block debt cancellation even when it comes at no cost to themselves (as they would have sold it at the same price to a collection agency), they appear as a bunch of greedy, vindictive Scrooges. Given their current vulnerability, banks might not want to incite hostility by preventing people from helping each other out.
Accordingly, it is important that the Jubilee organisers continue to frame it in precisely that way: people helping each other out of hardship. Yes, they might understand that its political significance runs deeper, but if they portray it as a political ploy then it will be met as such by the banks or other authorities. Public opinion might also not be as sympathetic.
This also goes for the way the organisers portray it to themselves. In a political system that is lost in a maelstrom of hype, spin and messaging, we crave authenticity in others and in ourselves. Let the Rolling Jubilee stay grounded in the simple goal of freeing people from debt. The political effect will be greater, not less, when it comes from a place of sincerity.
The Rolling Jubilee could influence economic policy as a model for a very different kind of bailout in response to the next financial crisis. The problem of unpayable debts bedevils every corner of our financial system – public, corporate, and personal. So far, the response of the monetary and fiscal authorities to nearly every financial crisis has been to bail out the creditors but not the debtors. Governments and central banks purchase all kinds of shoddy loans from the private sector, but rather than reduce interest or principal on those loans, they merely become the new creditor. The underwater homeowner, the indebted university graduate, the laid-off worker juggling credit cards ... they get no relief at all.
The Rolling Jubilee brings a different kind of solution into the public consciousness. The next time a systemic crisis breaks, central banks can rescue the banking system by once again buying the delinquent loans – and then cancel them or reduce the amount borrowers owe. Central banks, with their unlimited capacity to print money, have the power to do this at no cost to the taxpayer. The result would be a release of pent-up consumer purchasing power that had been stuck in debt service. Rising demand would fuel employment, wages, and a broad-based economic expansion.
Would this solution be inflationary? Yes. But a little inflation isn't necessarily a bad thing, as long as wages rise as fast as prices. Then it is an equalizer of wealth, as the relative value of hoarded wealth shrinks.
Debt cancellation, whether a "people's bailout" or government policy, is only part of the solution to our economic woes. Deep systemic reforms are necessary, especially given the reality that we are operating a growth-dependent system on a finite planet. But right now, debt is the issue staring us in the face. As always, the most innovative solutions rise from the margins. The Rolling Jubilee may be showing us a glimpse of what is to come.
This article originally appeared on guardian.co.uk
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