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Congress still has a ton of work to do to retrieve a viable economy. So far, we have employed Band-Aids where major surgery is required. Although the nerves of the bankers have been soothed, the same is not true on the street. What the bankers have received is a ton of cash. How they use it is up to them. Their instincts are to circle the wagons and keep credit tight to limit any further exposure. Their further instincts are to grow their institutions to the point they become too large to fail. In fact, that has already happened. Nine already out-sized banks could soon become four or so under the present bailout. And money will remain tight. So unless there is a fundamental regime change in Washington, the recession and bear market will be much longer than usual with only a dim light at the end of the tunnel.

On top of a national debt increase of over four trillion dollars during the Bush era, the banks chose to add another trillion. Yes, they chose to do so. After all they are no longer regulated. They are free to go bankrupt if they wish and set aside golden parachutes so that those making the choices can only be enriched. This is essentially a replay of the situation that led to the great depression. Having lost over a trillion of their own dollars, their instincts are to employ tight-fisted lending policies. That is normally OK, except that is not what the country needs right now. Make that the world, for we are no longer alone. That feature makes things tougher; how can we instill confidence in those who do not yet fully understand free markets in financial terms.

There are several concrete events that need to take place beyond the present bailout limits. What has been done is important, it just did nothing of substance to effect the desired result. Trickle-down economics has now been thoroughly discredited--except for one thing: It has become the banker's way of life--Plutocracy in other words. And it is so ingrained in our culture it will take a major event to serve as a wake-up call. When McCain says he will give the rich a tax break, our ingrained consciousness interprets this automatically that what benefits the rich also benefits all of us. But nobody ever told the rich. Being on their own, they will maximize returns in the good old Uncle Sam way--for themselves, not us. Even many of us on the street too-often defend this system, vicariously, for most of us will never have even a remote chance at the big time. This bit of unreality is equivalent to a national hang-up.

Simply said in terms of the nation: People want to restore confidence; Congress wants to make credit available; Wall Street wants to further enrich itself. There are none of the heralded checks and balances or any effective oversight in our economic system. Congress and Wall Street are too close for regulation to work, and the Military-Industrial complex makes it an incestuous foursome.

It is no wonder we get into trouble, and take our time about digging out. Where is the specific structure needed to ease credit? Unless we can elect Obama, there may never be any. Consider his plan:

  • 90-day moratorium on foreclosures.
  • Authorize bankruptcy judges to modify mortgage terms.
  • Allow families to withdraw from IRA accounts without penalty.
  • Extend unemployment benefits and suspend taxes on that income.
  • Give small businesses tax credits for each new job they create.
  • Distribute $50 billion to states for roads, bridges and to make schools more energy efficient.
  • Double the capital loan to the auto industry.

McCain is not without some good ideas, but he also takes good care of the plutoocrats:

  • Cut capital-gains tax in half.
  • Reduce tax on IRA withdrawals
  • Introduce a mortgage plan patterned after the "Home Owners Loan Corporation" of the New Deal era.

The first of these is also a Bush favorite and provides no help to struggling homeowners.

What else is not in the fine print?

Where is the money for?

Bullet-proofing financial structures.
Head Start and college education for all.
Universal health care.
Staving off population growth and poverty.
Sustainable living in harmony with nature.
Renewable energy sources.
Ignoring all these invites catastrophe this century. The US is in the unique position to lead the international parade--by example, not war. We can do it.


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