10 Steps to Break Up the Wealth of the Super Rich
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• Create a national infrastructure and reconstruction bank. Instead of channeling Federal Reserve funds into private Wall Street banks, Congress should establish a federal bank to invest in public infrastructure and partner with other financial institutions to invest in reconstruction projects. The focus should be on investments that help make a transition to a green, sustainable economy.
• Provide rigorous oversight of the financial sector. The 2010 reforms to the financial sector failed to curtail some of the most destructive, gambling-oriented practices in the economy. The shadow banking system—including unregulated hedge funds—should be brought under greater oversight, like other utilities, and Congress should levy a financial speculation tax on transactions to pay for the oversight system.
• Restructure the federal reserve. The Federal Reserve has been creating money and channeling it to beneficiaries within the economy with no public accountability. The Fed contributed to the economic meltdown by failing to provide proper oversight for financial institutions under its jurisdiction, keeping easy credit flowing during an asset bubble, ignoring community banks, and then propping up bad financial actors. The Fed must be reorganized to be an independent federal agency with proper oversight and accountability. Its regulatory functions should be separated from its central bank functions, the new regulator given teeth to enforce rules, and individuals who work for the regulatory agency prevented from subsequently going to work for banks.
• Re-engineer the Corporation. The concentration of power in the corporate 1 percent has endangered our economy, our democracy, and the health of our planet. There is no alternative but to end corporate rule. This will require not only reining in and regulating the excesses of the corporate 1 percent but also rewiring the corporation as we know it.
Unfortunately, the Supreme Court’s Citizens United (2010) decision moves things in the wrong direction, giving corporations greater “free speech” rights to use their wealth and power to change the rules of the economy. An essential first step in shifting the balance back to the 99 percent is reversing the Citizens United decision through congressional action.
There are good and ethical human beings working in corporations and in the 1 percent. But the hardwiring of these companies is toward the maximization of profits for absentee shareholders and toward reducing and shifting the cost of employees, taxes, and environmental rules that shrink profits. The current design of large global corporations enables them to dodge responsibilities and obligations to stakeholders, including employees, localities, and the ecological commons. The corporate 1 percent may pledge loyalty to the rule of law, but they spend an inordinate amount of resources lobbying to reshape or circumvent these laws, often by moving operations to other countries and to secrecy jurisdictions.
At the root of the problem is a power imbalance. Concentrated corporate power is unaccountable—and there is little countervailing force in the form of government oversight or organized consumer power.
Looking at corporate scandals such as those of Enron and AIG, or at the roots of the 2008 economic meltdown, we find case studies of the rule riggers within the corporate 1 percent using political clout to rewrite government rules, dilute accounting standards, intimidate or co-opt government regulators, or outright lie, cheat, and steal.
Changing the rules for the corporate 1 percent is not anti-business and, by creating a level playing field and a framework of fair rules, will actually strengthen the 99 percent of businesses that most contribute to our healthy economy. A new alignment of business organizations reflects this. The American Sustainable Business Council is an alternative to the U.S. Chamber of Commerce and advocates for high-road policies that will build a durable economy with broad prosperity.