Where's the Progressive Agenda for the Great Recession?
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2. We must also move money from the financial sector into the real economy. Wall Street is too large, too bloated with excess and therefore much too eager to play croupier with other peoples' money. Before the crash it accounted for more than 20 percent of corporate profits. Wall Street's cheerleaders said we could have a prosperous economy that moved money around rather than produced tangible goods and services. We can't.
You move money away from the super rich and away from Wall Street and you will put an enormous damper on fantasy finance. All the proposed rules and regs, and new agencies, and modified pay schemes have little meaning if we fail to move money away from the casino and the super-rich who play there.
How do we do that? There are many ways:
- A Tobin tax on speculative financial transactions
- Wage caps on financial salaries
- A real progressive income tax like we had during the Eisenhower years where those with adjustable gross incomes over1 million would see their top dollars taxed at 90 percent
- A significant rise in the minimum wage which must be indexed to inflation
- Enhanced unionization to place more upward pressure on wages
- Border adjustment taxes to level the global playing field on trade involving goods produced by child labor and under poor environmental conditions
- Direct investment in alternative energy development
- A new WPA for the unemployed
- A new Glass-Stiegel Act plus anti-trust measures to break up large institutions so that they are small enough to fail
Maybe the Great Recession isn't bad enough to generate a focused agenda and a new progressive movement. Maybe I'm completely off base and the stock market will go ever upward and, mirabile dictu, what's good for Wall Street will turn out to be good for Main Street with true full employment. But if the fundamental causes of our mess really are the mal-distribution of income combined with a bloated financial sector, then you can take it to the bank that we'll be bailing out the super-rich again in the near future, while millions go without work.
Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It , Chelsea Green Publishing, June 2009.