Ok, the election is over, now it's time to start thinking about governing instead of campaigning. Through all of this, it consistently struck me that we have three gigantic problems that we are not addressing. If we don't fix these three, then we are going to remain stuck and stuck is not a pretty place.
First we need to reform campaign financing. Successful candidates have to spend 6+ hours every single day to raise the funds they need for the Senate, close to that for the House, and it's getting up there for competitive state offices both executive and legislative. This is fundamentally corrupting because people, be they an individual contributing 5 bucks, a business executive contributing $2,400.00, or a lobbyist bundling 100k, are only going to contribute to a candidate who will advance their interests. And the larger the checks, the more specific the interests.
This is why Wall St. has the Senate by the balls. You can't raise the money needed to win without contributions from there – lots and lots of contributions. I don't think most Senators like the limits they face to raise enough money to win. But they make the reasonable and rational decision that they will do the best they can within the limits required to get reelected – because if they don't whoever replaces them will face those same limits. I also think that our legislators, while they enjoy the competitive advantage the present system gives them (they're the best at raising the money), fundamentally hate the limits it places on their actions.
The bottom line is that until we change how races are financed, the victorious candidates will be constrained by their major contributors. Not owned, but constrained. And to free them to respond to us, the voters, we need to break their financial dependency. To do this I think we need to:
- Public financing for every candidate in the general election who is a member of a major party or who is pulling more than 10% in an average of the polls. If a candidate declines public financing, then their opponents will be funded to the same level (Jared I love you but I think we need to make financing a level field).
- In the primary the same thing – with a requirement that they raise X dollars from Y donors. The donors must be in their district. And those limits are enough that they do have to go sell themselves to a lot of people (a good thing), but not one that sucks up a ton of time. The purpose of this is primary funding only goes to credible candidates.
- There must be full disclosure of the contributors to any organization that runs any kind of political ad. If the ad is nothing more than God Bless America, they must disclose. No disclosure, then the ads cannot run. This in no way impinges on the 1st amendment as you can say anything you want, you just have to first say your name.
- No limits on contributions. You can contribute any amount to any person, cause, interest group, etc., including candidates who choose to avoid public financing. The money will find a way so limits just change how it is delivered and to what group. Having it go to the parties (that would be the main impact if we have public financing) actually increases accountability.
Second we need to address unemployment. The only way to turn the economy around is to reduce unemployment. As long as the economy is in the toilet government expenses are higher and government income is lower. Reducing unemployment flips that so we have reduced expenses, increased revenue, and an avenue to balancing the budget and the money to address the other problems we face.
First off, we have to be honest about the problem. The true unemployment rate is 17% including those that have given up and those who are underemployed. This is close to 30 million people. We need to get 15 million back to work or otherwise busy to bring the economy back (measuring the true rate you do have about 5% unemployed at "full employment" because people switch jobs, get fired and are looking for a month or two, etc.) So how do we do this?
- There are 5 million open jobs today. The big problem is that the jobs are in one place and the person who wants to take it is unemployed elsewhere – in a home where they owe more than it's worth. So we pass a law that anyone who moves over 100 miles to take a job can walk away from their home and the bank must take it back. Yes that's tough for the banks, but they got us into this mess, and we gave them a ton of money to fix their self-inflicted error. They can use part of the bonuses they're presently paying to cover this.
- There are 20 million students in College. I figure schools can on average handle a temporary 20% increase in students using their existing infrastructure – many will be bursting at the seams but it's doable. So we send 4 million to school. Many unemployed have skills for jobs that are not coming back, not even with full employment. What would this cost? Figure $40,000.00/year, a little over 20K to the college and a little under 20K for the student to live on. And repayment would be a percentage of their taxes so the government would make back this investment (and it is an investment that will pay off big time).
The cost would be 160 Billion/year. If the Bush tax cuts expire for all (which is the truly sensible course), then federal income increases 370 Billion/year. So let the tax cuts lapse (all of them), implement this program, and the deficit is still cut 210 Billion/year. And this will reduce unemployment by 5 million (not 4) because colleges will need to hire additional people to teach and support the additional students.
- Improving our infrastructure is not only desperately needed for the future, but it is one of the most effective ways to turn the economy around (much better than tax cuts). While the direct cost of each job created by this spending is 350K/job, when you count the secondary jobs created it drops to around 200K/job (it is so high because you're spending a lot on stuff, not people). To put 1 million to work would require spending of 200 Billion. We take that from the 210 Billion left over after letting the tax cuts expire and funding college.
- Ok, that's 11 million of the 15 million. By itself that will get the economy heading upward – fast. I'll leave it to Congress to figure out the last 4 million unemployed. Oh, and it's a great counter argument to extending the tax cuts – you want the cuts or 6 million jobs…
Third we need to complete financial reform. The financial reform bill had some good stuff in it. But it was not enough to avoid another financial crash, and the banks are already up to many of their old tricks. When people claim it was the greatest financial reform since FDR, that's because it was the only reform since FDR. Both parties have indulged in an orgy of financial deregulation since 1980 at the behest of their Wall St. contributors. And the result has been that all three recessions since the Clinton boom have been due to financial games.
What is needed here is straightforward, but politically difficult. I think we will need to get campaign finance reform through first because if we don't, every legislator who votes for the below will lose their next election – and they know that. But once they are free to vote in the interests of the country we need to:
- Bring back Glass-Steagall. It worked superbly well for 60 years until it was removed. Tweak it a bit if necessary, but by tweak I mean make better, not eviscerate at the behest of Wall St. And until we bring it back we will continue to have recessions caused by Wall St.
- Break up the banks that are too big to fail. As long as a bank is too big, then it is too big to fail. And those super large banks have a tremendous advantage over their competitors because investors know the federal government will not let them fail. We did it to Standard Oil because its size alone was harmful to our economy, we can do the same with the largest banks.
Democracy isn't easy. One election alone does not fix everything. Even people with the best of intentions are limited by the system and their own knowledge and skills. So we have to keep working to improve the system. I do think at present we are at a point where the above is possible – people are upset and they are paying attention.