What he said…

Derrick Jackson nails the financial crisis right on the head in his column today:

No bailout should happen without recreating the nation’s social bargain with the rich. The nation can no longer afford the disparity where the average American CEO makes 344 times the pay of the average worker, according to the Institute for Policy Studies and United for a Fair Economy. The CEOs and their boards should pay toward the bailout before a penny of that possible $2,333 comes out of the pockets of Americans.

There is more than enough money among the financial elites to pay for the bailout. The Institute for Policy Studies last week calculated that a securities transaction tax of a penny for every $4 invested would add $100 billion a year to the treasury. Had such a tax been in place after the 2001 Enron scandal, it would have added up to the current cost of the bailout.

A wealth surcharge of no more than 3 percent on households worth more than $10 million would add another $300 billion. In response to the news this year that two-thirds of American corporations paid no income tax between 1998 and 2005, a corporate minimum income tax could add another $60 billion.

The institute said a 50 percent tax on salaries of $5 million or more and 70 percent on salaries of $10 million or more – until the bailout is over – would add another $105 billion. Killing overseas tax shelters, loopholes for excessive CEO pay and the sale of mansions, and creating a progressive inheritance tax would add another nearly $300 billion.

2 thoughts on “What he said…

  1. Jackson’s suggestions are wonderful. It is doubtful that anyone in or out of Washington has the courage and the resources to actually implement them. We have a government by the *wealthy* people for the *wealthy* people. When government passed legislation to help low-income homeowners (Clinton’s Community Reinvestment Act, 1995), who profited? As a result of this act, banks substantially increased the number of high-risk loans they never would have made otherwise, and introduced new high-risk derivative securities with large returns for the *wealthy*. No matter which major party won in 2000, the financial industry had de-regulation already bought and paid for. The subsequent removal of post-1929 banking regulations resulted in the exponential growth of the OCT “shadow” market of derivative securities that now exceeds five time the world’s wealth in total estimated value (See Behind the Bailout, below). The current real-estate crisis is like a wart on the nose of that big, hairy beast.

    Resources: Big Government’s Big Role in the Credit Crisis – Capital Commerce (usnews.com)
    http://www.xanga.com/Buddha_Frog Behind the Bailout, Sept. 26

  2. A Sort-of Retraction

    Rather than blaming the *wealthy* (see my previous comment), A better thing would have been to place the onus for this crisis upon the *greedy*, since (although the correlation appears to be significant) the wealthy are not always greedy and the greedy are not always wealthy. In truth, everyone has some form of greed, but the wealthy among us are just in a better position to indulge it more effectively. When they choose not to, it can be really inspiring. Any thoughts on that theme?

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