The Bush Administration’s $700 billion Wall Street bailout is under fire for misspending and not boosting the economy as it was expected to do. With the U.S. economy in turmoil it is easy to point. Unemployment is at a high. It wouldn’t be an understatement to say that everyone is looking at President-elect Barack Obama to make America whole again.
Instead of just talking about what needs to be done to fix the ills that are affecting the U.S., Rev. Jesse L. Jackson Sr. and the Rainbow PUSH Coalition’s Wall Street Project are proposing solutions.
At a breakfast meeting kicking off the 12th annual Wall Street Project economic summit PUSH unveiled a ten point plan for economic recovery that addresses a need to restructure the economy in a way that provides bottom up answers.
“Those who are locked out must not remain locked out,†said Rev. Jesse L. Jackson Sr. at the breakfast session. “We want to make certain that any bailout is bottom up.â€
The proposal identifies areas where President-elect Barack Obama’s economic recovery should emphasize access to capital, mandate regulatory oversight of bailout recipients, grant relief to distressed families and students, strengthen the nation with community jobs programs, and provide legal protection for employees to unionize.
“I think a lot of the recommendations make sense,†said New York City Comptroller Bill Thompson, who spoke at the breakfast. “The next bailout package should be focused on people, cities, and states. We have to make sure that access to capital isn’t just for the big businesses.â€
Central to the breakfast’s theme was the concept that although small businesses and individuals were suffering, Wall Street executives who caused the economic crisis were still receiving bonuses, which now are bankrolled by tax payers thanks to the U.S. Treasury Department’s $700 billion bailout.
Jackson says that the difference between last year’s summit and this year’s summit is that the government is more aware. “Last year it was the moderate to low income people that were losing their homes,†says Jackson. “Now the $300,000 plus crowd is facing foreclosure and there is more relief for them then for the low end borrowers.â€
The Full Plan:
l. Transform the economy, don’t just make a temporary fix
We need a restructured economy, not just a return to the old status quo of deepening inequality, low wages, outsourced jobs and tax cuts for the rich. We need to think about what we want–not just what are against–with an emphasis on equality, sustainability and fairness. We need to democratize the economy and initiate a fundamental restructuring of trade, import/export, and industrial manufacturing policy, with more bottom up participation, not just top-down decision-making.
2. Mandate criteria and goals, and strengthen regulation and oversight for recipients of taxpayer bailout funds
The first $350 billion of bailout funds have been issued to financial institutions with
few, if any, restrictions or mandates on how the public funds are to be used, allowing banks to use the public funds for any purpose. There has been inadequate or no regulation, transparency, accountability, or oversight regarding how funds have been used. The Federal Reserve and Congress did not require specific reporting, and banks are refusing to make public how they are using funds.Regulation, transparency, accountability, and oversight must be restored as pre-conditions for the issuance of the second $350 billion of bailout funds.
We need to strengthen financial regulation so that we all play by the same rules. We need full reporting and accountability, transparency, and disclosure on how taxpayer funds are being spent.
We need to monitor compliance with clearly defined goals and obligations.
Firms receiving funds must disclose where all the money is going and not use it for acquisitions or executive bonuses.
3. Help for those that need help the most
We need clearer priorities and TARGETED INVESTMENT so that the people in the most need get help. The Economic Recovery Plan must include TARGETED INVESTMENTS that require institutions to restructure loans and not repossess homes. We need at least a one-year moratorium on all foreclosures, as was done in the 1930’s.
The Economic Recovery Plan must make it easier for distressed families and businesses to get a “second chance” under new bankruptcy protections. It must empower and enable bankruptcy judges to restructure and modify mortgages so families can keep their homes.
4. Lower student loan interest rate to 1%
The Federal Reserve lowered loan rates for banks to1%. Students need even greater relief to continue and complete their college educations and not be saddled for life with student loan payments (some now with interest rates as high as 20%). If banks can get loans at 1%, students should too.
5. Unfreeze the credit markets
The Economic Recovery Plan must require financial institutions to “unfreeze the credit markets” and expand their lending, credit, and financing to small and medium size businesses to enable them to finance their operations or finance deals to expand their businesses through acquisitions.
6. Roll back credit card interest charges and fees
Thirty-six million families are maxed out or about to be maxed out on credit cards which often charge usurious interest rates and fees. The government is putting money into credit card companies to stabilize them. Those companies must be required to roll back outrageous fees and charges, and loosen time periods for payments. (England now has ruled that card customers will have 60 days to pay, not 30.)
7. Strengthen community lending institutions
Strengthen and encourage not for profit credit unions and community banks to engage in targeted lending. Assist cooperatives and encourage barter and exchange programs so that people in need can help each other.
8. Commit to Community Job Programs, infrastructure construction, and a green economy
To stem the escalating loss of jobs–over 1 million in the past two months–an Economic Recovery Plan should include “an immediate extension of unemployment benefits, a greater investment in summer jobs for at-risk youth, job training for disadvantaged workers, and a workforce development initiative to train and employ minority workers in the growing green jobs industry.” (National Urban League)
We need to employ people at the community level and on all levels where cutbacks are decimating community services, including education and the arts. We must commit to renewing our decaying infrastructure, creating a range of well-paying jobs in the process. We also need to create green jobs and green businesses, and support organizations providing green solutions to protect our environment.
9. Support the employee free choice act
We must urge Congress to protect the right to organize by immediately passing the Employee Free Choice Act legislation. The Act evens the playing field for employees seeking to join unions and for unions seeking to organize nonunion workers.
10. Investigate the crimes behind the crisis
The Madoff affair is just the tip of the iceberg. We need a national Blue Ribbon Presidential Commission with subpoena power to investigate the pervasive fraud and manipulations behind the crisis. The commission must make recommendations to the Justice Department to strengthen weakened laws and prosecute wrongdoers. We need a jail-out as well as a bailout.