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Marcy Kaptur for Speaker
Restore the Anti-Bailout Coalition
By Wayne Jett © November 6, 2009
    U. S. policy in every respect demonstrates unmistakable symptoms of emanating from a government completely captured by malicious predators. Each concern in our national economic crisis crying out for reform is ignored or trundled along without progress, while high political officials press legislation designed to wreck the health care system and energy industry created by the middle class.
Abysmal Fiscal Policy
    The first German chancellor born and raised under Communism in the German Democratic Republic (East Germany), Angela Merkel, proposes cuts in tax rates to allow her nation’s economy to recover from global economic collapse brought on by crude oil prices trebled thanks to financial manipulators in U. S. markets.  In contrast,
U. S. secretary of state Hillary Clinton admonished Pakistani officials for failing to tax at rates high enough to provide for national security, telling them the U.S. government taxes "everything that moves and everything that doesn't, and that's not what we see in Pakistan."
    Not often is evidence so apparent that U. S. policy still follows Bernard Baruch’s mercantilist advice to “tax everyone and everything” during the Great Depression. The U. S. economy faces sharply increased tax rates in 2010 as a certainty, while policy-makers shackle future generations to higher taxes by borrowing money to pay for destroying used cars and to make down-payments on houses for individuals who cannot afford them.
    Cash for clunkers and $8,500 tax credits for first time home-buyers were tools intended to goose GDP numbers for the third quarter. Anyone who gives credence to the suggestion that economic recovery has begun based upon the reported 3.5% annual growth rate in third quarter GDP is misled or misleading. Nothing is being done by top policy-makers to reform Obama administration fiscal policy of high tax rates and historically unprecedented deficit spending.
Shameful Monetary Policy
    Meanwhile, in a more transparent society, one might expect Federal Reserve officials to be reveling in the successes of their monetary policy assiduously pursued during 2004-2008. The Fed purposely destroyed jobs and created unemployment by raising the Fed funds rate above market, inverting the yield curve, and thereby denying credit at reasonable rates to small and mid-size businesses.     Thanks to this policy and the Fed’s cooperative silence on manipulation of crude oil prices, ten to 15 million Americans today have no job or are underemployed. Many are so impoverished they cannot pay higher prices even for necessities. Thus, Fed policy is working like a gem, fighting what the Fed defines as inflation: rising prices.
    True inflation is the dollar’s loss in purchasing power, as best reflected immediately in the price of gold. While the Fed was destroying jobs with its manipulation of domestic interest rates, our esteemed central bank intentionally devalued the dollar (inflated it) by adding liquidity through purchases of Treasury securities, stopping only in 2007. How outrageously immoral to destroy people’s jobs in a pretense of fighting inflation while purposely causing inflation with excess liquidity!
    Fed functionaries take no responsibility for intentionally creating unemployment, but express desires “to spur job creation and prevent inflation from falling any further below rates that are consistent with price stability.” With sophistry such as this flooding the media, self-preserving politicians (Barney Frank in the House, and Christopher Dodd and John Shelby in the Senate) express a need for closer political control of monetary policy.  Senator Dodd has introduced a bill to remove the Fed’s power to regulate banks, which would be a good thing, but accomplishes nothing to examine or to improve monetary policy. However, Dodd’s bill is 1,100 pages and was surely written by investment bankers and hedge funds to serve their interests, so it deserves further scrutiny.
Saving the Middle Class
    What is to be done? The way was shown for one brief shining moment in October, 2008, by a coalition of rank-and-file Democrats and Republicans in the U. S. House of Representatives. They stood against elitist-dominated leadership and defeated the $700 billion “no-strings bailout bill” demanded by Treasury secretary Henry Paulson as the cost of saving the nation from financial catastrophe. The House majority who defended the American middle class at that crucial time must do so again, and this time must make it stick, if the elitists’ attack on middle class prosperity, health care and energy is to be defeated.
    To succeed in protecting middle class interests, the House majority should first take control of House leadership. They can do so by replacing Speaker Nancy Pelosi – the mouthpiece of elitist domination in the House – with one of their own.
    Marcy Kaptur, Democrat of Ohio, is an obvious, best choice. She is the longest serving woman in the House. She represents a truly middle class district and, more importantly, she is faithful in principle to her constituents. She was a leader of the October coalition which initially defeated Paulson’s “bailout” gift to Wall Street’s financiers, and did so on the intellectually sound basis that trading fraud and manipulation was the central cause of the 2008 financial crisis.
    Kaptur has introduced a bill (HR 3995) to authorize hiring more FBI agents, forensic accounting experts, prosecutors in the Justice Department and enforcement personnel at the SEC to deal with financial fraud in the securities, corporate and mortgage sectors. The bill can certainly be improved, but at least Kaptur is headed in the right direction and motivated by a search for justice.
    Kaptur’s election as speaker would be better done if by a majority of the Democratic majority, although all House members willing to move the leadership towards protecting middle class interests ought to provide support to that end. These are times of great danger for the nation and for the middle class which built its strength and prosperity. Kaptur is not right on every issue, but is not so captured by ideology that she is unwilling to identify what serves her constituents and what harms them. ~