My belief is that government should serve the people. Unfortunately, the conservative belief is quite different, and over the past half century this has allowed and encouraged the extraordinary concentration of power and wealth with the very richest people in the country, to the detriment of literally everyone else. If we are to recover our democracy, the things that allowed this plutocracy must be changed, and a fair share of the nation’s wealth restored to the rest of us. Here are some of the things we must do.
The Great Depression taught us that banking and investment must be separated. But Congress, controlled by the very rich, repealed the Glass-Steagall Act, which in 2008 forced the government to rescue the rich by bailing out overextended investment banks with our money. Reinstatement of the separation is the most important thing Congress could do. That way, when investment banks go under because they chased risky schemes, which they continue to do, they will lose their own money, not ours. But we will guarantee the safety of ordinary deposit banks, as long as banks maintain the required reserves and follow the rules.
We must disallow all enterprises and activities that do not contribute to the general welfare. It’s easy to see that theft, burglary, and embezzlement have no redeeming social value. That’s why they are illegal. But Wall Street every day rakes in money—our money—with rapid computer trading and other sleazy activities that should be illegal. Fast computer programs flash away all day to pick pennies off the top of trades several times per second. They contribute absolutely nothing to the country, and should therefore be outlawed.
They are not the only way Wall Street steals our money, of course. Hedge funds bet that an enterprise will fail. When it does, high rollers stuff their hidden bank accounts with sums that have lots of zeros at the end, while the general economy declines. In fact, the great majority of Wall Street enterprises are pure rent-seeking. That is, they “invest” in ways that contribute nothing, but extract unearned money from the economy. That’s the very definition of rent-seeking.
Another practice is the hostile takeover of businesses in financial difficulty. The vulture buyers then sell everything the company owns and fire everyone. The rich buyer gets richer, often much richer, and everyone else gets poorer and unemployed, and the country loses out. All such hurtful practices should be disallowed completely, because they are harmful to people and to the economy.
Wall Street is totally amoral. “Investment” doesn’t mean committing money to something beneficial. It means putting money into something with the sole purpose of extracting unearned profit. Any contribution to the economy is accidental. The purpose is to extract money, and that extracted money is ours.
People and corporations with Big Money routinely hide it offshore in financial institutions that keep their depositors’ names secret. The majority of this money is illegally hidden to avoid paying tax on it. We must have a new law that disallows investment in any institution in which the IRS cannot determine the names of depositors and the value of their holdings. Violators must personally be punished with prison terms. Fining a corporation does nothing because the fine is always paid by the corporation, not the criminal. At base, our money ends up paying the fine, and the practice continues.
Corporations have taken to “moving” their headquarters to places with low tax, although the only moving done is to establish a small office there. The corporation continues to benefit in many ways from the taxes we pay, but contributes nothing to the country. We should simply disallow this practice, but if not we should treat the company as a foreign business, and assess fees to cover the cost of the services and infrastructure a foreign corporation with a big presence in the US uses.
In general, we must end the opaque ways used in banking. The government should be able when necessary to learn the names of all “investors” in any enterprise. Tax authorities must be able to find out who owns real estate such as the multimillion dollar homes in NYC and elsewhere that are hidden by a series of shell companies designed to keep ownership hidden.
A revolving door has always existed between Congress or regulators and lobbyists. After serving in Congress, literally anyone can easily walk into a job that will quickly make her a millionaire by lobbying the same people she formerly worked with. There should be a significant period imposed before anyone can take such a job. I suggest five years. Congress is intended to be a legislative body, not an easy way to become rich.
These are only a few of the many corrections we must make if we are to restore real democracy and end the plutocracy we have become.
Let us hope the coming election gives us a Democrat for president and a Democratic majority in both houses of Congress. If that happens, we stand a fair chance of correcting the failures that Republicans have forced on us over three decades of subversion and failure to honor democracy.