Economic Stewardship

Introduction: Democratic Party's Economic Stewardship

By JAMES F. HENRY

Bull Moose Magazine Publisher

The news today was not pleasant. Hurricane Ike is barreling toward the Texas coast, and already gas stations all around the south are raising prices, many places topping out over $5 a gallon (this before the storm even hit the refineries in the Texas Gulf Coast Region.) Lehman Brothers is in the news because the once powerful Wall Street icon has seen its value drop through the floor, because of poor investments in the housing market. This is just on the heels of the news that the Federal Government is taking over Fannie Mae and Freddie Mac, and just months after Bear Stearns succumbed to the pressure of the depressed housing market. Despite this, John McCain thinks the economy is strong, and prefers to focus his efforts on the war in Iraq. He even has admitted that the economy is not his strong suit.

Fortunately for America, Barack Obama and Joe Biden understand the economy, and they have a plan. That is the theme of this second in a 10-part series of articles, each focusing on the top issues in the 2008 Democratic Platform.

Economic Stewardship

The challenges facing the next President of the United States on the economic front are as daunting as President Bill Clinton inherited from Bush I in 1993. We can look to the Clinton years as proof that the American economy is resilient and capable of long-term, sustainable growth. That remains the goal of the Democratic Party today. In the space that follows, we have the actual text from the Democratic Party Platform under the Economic Stewardship heading.

"Since the time of our Founders, we have struggled to balance the same forces that confronted Alexander Hamilton and Thomas Jefferson-self-interest and community; markets and democracy; the concentration of wealth and power, and the necessity of transparency and opportunity for each and every American.

"Throughout our history, Americans have pursued their dreams within a free market that has been the engine of America's progress. It's a market that has created a prosperity that is the envy of the world, and opportunity for generations of Americans. A market that has provided great rewards to the innovators and risk-takers who have made America a beacon for science, technology, and discovery. But the American experiment has worked in large part because we have guided the market's invisible hand with a higher principle.

"Our free market was never meant to be a free license to take whatever you can get, however you can get it. That is why we have put in place rules of the road to make competition fair, open, and honest. We have done this not to stifle-but rather to advance - prosperity and liberty.

"In this time of economic transformation and crisis, we must be stewards of this economy more than ever before. We will maintain fiscal responsibility, so that we do not mortgage our children's future on a mountain of debt. We can do this at the same time that we invest in our future. We will restore fairness and responsibility to our tax code. We will bring balance back to the housing markets, so that people do not have to lose their homes. And we will encourage personal savings, so that our economy remains strong and Americans can live well in their retirements."

Restoring Fairness to Our Tax Code

Nowhere is it more evident that the Democratic Party is the chief agent of change in this election than in our thoughts on restructuring the tax code. Since Ronald Reagan became President, the Republican Party has consistently adopted the philosophy that if you cut taxes on the wealthy, they will allow the savings to "trickle down" to the people at the bottom. We Democrats are smart enough to know that after the rich have taken their cut, what is left to trickle down is not much. The Democratic Plan will put money back into the hands of the middle class, and the upper middle class; those who make up to $250,000 a year will pay less taxes than they do today. Those who make more than $250,000 will be asked to return a PORTION of the tax cut passed by the Republican Congress and President Bush. By placing the bulk of the savings in the hands of the middle class, the Democratic Party puts the money directly into the hands of the consumers who have the greatest power to drive the economy forward.

Without further ado, we present to you the Democratic Party's position on Restoring Fairness to Our Tax Code:

"We must reform our tax code. It's thousands of pages long, a monstrosity that high-priced lobbyists have rigged with page after page of special interest loopholes and tax shelters. We will shut down the corporate loopholes and tax havens and use the money so that we can provide an immediate middle-class tax cut that will offer relief to workers and their families. We'll eliminate federal income taxes for millions of retirees, because all seniors deserve to live out their lives with dignity and respect. We will not increase taxes on any family earning under $250,000 and we will offer additional tax cuts for middle class families. For families making more than $250,000, we'll ask them to give back a portion of the Bush tax cuts to invest in health care and other key priorities. We will end the penalty within the current Social Security system for public service that exists in several states. We will expand the Earned Income Tax Credit, and dramatically simplify tax filings so that millions of Americans can do their taxes in less than five minutes."

Housing

Owning a home has been called the American Dream. Under Bush Administration policies, record numbers of Americans became homeowners during his first four years in office. Now, look in the classified ads section of your daily newspaper. In my paper, the largest section of the classifieds is filled with legal ads for lenders who are foreclosing on properties on a daily basis. No longer are homeless shelters filled predominantly with the chronically homeless. Now there are families who have nowhere to turn because their American Dream became the American Nightmare. These are people who never could have imagined themselves living in homeless shelters, and yet because of predatory lenders, that is their fate in life. Here is the Democratic Party platform to reform the housing market.

"The housing crisis has been devastating for many Americans. Minorities have been hit particularly hard—in 2006, more than 40 percent of the home loans made to Hispanic borrowers were subprime, while more than half of those made to African Americans were subprime. We will ensure that the foreclosure prevention program enacted by Congress is implemented quickly and effectively so that at-risk homeowners can get help and hopefully stay in their homes. We will work to reform bankruptcy laws to restore balance between lender and homeowner rights. Because we have an obligation to prevent this crisis from recurring in the future, we will crack down on fraudulent brokers and lenders and invest in financial literacy. We will pass a Homebuyers Bill of Rights, which will include establishing new lending standards to ensure that loans are affordable and fair, provide adequate remedies to make sure the standards are met, and ensure that homeowners have accurate and complete information about their mortgage options. We will support affordable rental housing, which is now more critical than ever. We will implement the newly created Affordable Housing Trust Fund to ensure that it can start to support the development and preservation of affordable housing in mixed-income neighborhoods throughout the country, restore cuts to public housing operating subsidies, and fully fund the Community Development Block Grant program. We will work with local jurisdictions on the problem of vacant and abandoned housing in our communities. We will work to end housing discrimination and to ensure equal housing opportunity. We will combat homelessness and target homelessness among veterans in particular by expanding proven programs and launching innovative preventive services."

Reforming Financial Regulation and Corporate Governance

OK guys, mark down this date. (FYI, as I write this, it's September 12, 2008). I have positions on just about every issue imaginable, but after reading the following provision from the Democratic Platform, I seriously have nothing to add to this subject! So rather than taking up more space, I'll just let the platform stand for itself.

"We have failed to guard against practices that all too often rewarded financial manipulation instead of productivity and sound business practices. We have let the special interests put their thumbs on the economic scales. We do not believe that government should stand in the way of innovation, or turn back the clock to an older era of regulation. But we do believe that government has a role to play in advancing our common prosperity: by providing stable macroeconomic and financial conditions for sustained growth; by demanding transparency; and by ensuring fair competition in the marketplace. We will reform and modernize our regulatory structures and will work to promote a shift in the cultures of our financial institutions and our regulatory agencies. We will ensure shareholders have an advisory vote on executive compensation, in order to spur increased transparency and public debate over pay packages. To make our communities stronger and more livable, and to meet the challenges of increasing global competitiveness, America will lead innovation in corporate responsibility to create jobs and leverage our private sector entrepreneurial leadership to help build a better world."

Consumer Protection

Credit Cards, sadly, are inextricably linked to the American economy. I say sadly because I firmly believe that credit card companies prey on those who can ill-afford to incur debt. I shudder at the thought of how many people have had to file for bankruptcy because their credit cards, replete with fine print in the statements, became as big an expense as their mortgage or rent. Turn on the television and you'll see advertisements from companies that proclaim to work on your behalf to negotiate better terms to repay your debts. You have to know that the demand for services of firms like this must be going through the roof, which only magnifies the enormity of the problem.

"We will establish a Credit Card Bill of Rights to protect consumers and a Credit Card Rating System to improve disclosure. Americans need to pay what they owe, but they should pay what's fair. We'll reform our bankruptcy laws to give Americans in debt a second chance. If people can demonstrate that they went bankrupt because of medical expenses, they will be able to relieve that debt and get back on their feet. We will ban executive bonuses for bankrupt companies. We will crack down on predatory lenders and make it easier for low-income families to buy homes. We will require all non-home-based child care facilities to be lead-safe within five years. We must guarantee that consumer products coming in from other countries are truly safe, and will call on the Federal Trade Commission to ensure vulnerable consumer populations, such as seniors, are addressed."

Savings

Even though Social Security is not the great concern it once was (very aptly addressed under President Clinton's Administration), most people understand that Social Security alone is not going to provide sufficient income for all Americans to live on once they retire. The Democratic Party recognizes that the system needs to be changed to encourage people to save money for retirement. In the space that follows, I am pleased to present the party's plan for encouraging saving money.

"The personal saving rate is at its lowest since the Great Depression. Currently, 75 million working Americans—roughly half the workforce—lack employer-based retirement plans. That's why we will create automatic workplace pensions. People can add to their pension, or can opt out at any time; the savings account will be easily transferred between jobs; and people can control it themselves if they become self-employed. We will ensure savings incentives are fair to all workers by matching half of the initial $1000 of savings for families that need help; and employers will have an easy opportunity to match employee savings. We believe this program will increase the saving participation rate for low- and middle-income workers from its current 15 percent to 80 percent. We support good pensions, and will adopt measures to preserve and protect existing public and private pension plans. We will require that employees who have company pensions receive annual disclosures about their pension fund's investments. This will put a secure retirement within reach for millions of working families."

Smart, Strong, and Fair Trade Policies

America has seen a steady decline in the industrial sector, as more and more of our jobs are becoming service-oriented. These jobs are important to the people that hold them, but they are a far cry from the high-paying industrial jobs that helped make America strong in recent generations. The reasons for this shift are many, and it is a complex issue that will require the best economic minds to overcome. Without further ado, I present the Democratic position on Fair Trade Policies:

"We believe that trade should strengthen the American economy and create more American jobs, while also laying a foundation for democratic, equitable, and sustainable growth around the world. Trade has been a cornerstone of our growth and global development, but we will not be able to sustain this growth if it favors the few rather than the many. We must build on the wealth that open markets have created, and share its benefits more equitably.

"Trade policy must be an integral part of an overall national economic strategy that delivers on the promise of good jobs at home and shared prosperity abroad. We will enforce trade laws and safeguard our workers, businesses, and farmers from unfair trade practices–including currency manipulation, lax consumer standards, illegal subsidies, and violations of workers' rights and environmental standards. We must also show leadership at the World Trade Organization to improve transparency and accountability, and to ensure it acts effectively to stop countries from continuing unfair government subsidies to foreign exporters and non-tariff barriers on U.S. exports.

"We need tougher negotiators on our side of the table–to strike bargains that are good not just for Wall Street, but also for Main Street. We will negotiate bilateral trade agreements that open markets to U.S. exports and include enforceable international labor and environmental standards; we pledge to enforce those standards consistently and fairly. We will not negotiate bilateral trade agreements that stop the government from protecting the environment, food safety, or the health of its citizens; give greater rights to foreign investors than to U.S. investors; require the privatization of our vital public services; or prevent developing country governments from adopting humanitarian licensing policies to improve access to life-saving medications. We will stand firm against bilateral agreements that fail to live up to these important benchmarks, and will strive to achieve them in the multilateral framework. We will work with Canada and Mexico to amend the North American Free Trade Agreement so that it works better for all three North American countries. We will work together with other countries to achieve a successful completion of the Doha Round Agreement that would increase U.S. exports, support good jobs in America, protect worker rights and the environment, benefit our businesses and our farms, strengthen the rules-based multilateral system, and advance development of the world's poorest countries.

"Just as important, we will invest in a world-class infrastructure, skilled workforce, and cutting-edge technology so that we can compete successfully on high-value-added products, not sweatshop wages and conditions. We will end tax breaks for companies that ship American jobs overseas, and provide incentives for companies that keep and maintain good jobs here in the United States. We will also provide access to affordable health insurance and enhance retirement security, and we will update and expand Trade Adjustment Assistance to help workers in industries vulnerable to international competition, as well as service sector and public sector workers impacted by trade, and we will improve TAA's health care benefits. The United States should renew its own commitment to respect for workers' fundamental human rights, and at the same time strengthen the ILO's ability to promote workers' rights abroad through technical assistance and capacity building."

Fiscal Responsibility

When President Clinton left office, he handed George Bush a record surplus that could have been the cornerstone of American prosperity for years to come. President Clinton accomplished this fete by fostering economic policies that resulted in the longest period of growth in American history, by shrinking the size of government (which he started before the Republicans took over Congress in 1994) and by giving tax cuts to those who have the opportunity to drive the economic engine - the middle class. Fast-forward eight years and we are back in the financial hole, spending more than we have at our disposal. This is a debt that future generations will have to pay, and is a direct consequence of the Bush Administration's failed economic policies. By his own admission, John McCain is not strong on the economy. In these dire economic times, we need a President who can hit the ground running, and not simply regurgitate the same old Republican Supply Side Plans.

"Our agenda is ambitious–particularly in light of the current Administration's policies that have run up the national debt to over $4 trillion. Just as America cannot afford to continue to run up huge deficits, so too can we not afford to short-change investments. The key is to make the tough choices, in particular enforcing pay-as-you-go budgeting rules. We will honor these rules by our plan to end the Iraq war responsibly, eliminate waste in existing government programs, generate revenue by charging polluters for the greenhouse gases they are releasing, and put an end to the reckless, special interest driven corporate loopholes and tax cuts for the wealthy that have been the centerpiece of the Bush Administration's economic policy. We will not raise taxes on people making less than $250,000, and we will eliminate federal income taxes for seniors making less than $50,000. We recognize that Social Security is not in crisis and we should do everything we can to strengthen this vital program, including asking those making over $250,000 to pay a bit more. The real long-run fiscal challenge is rooted in the rising spending on health care, but we cannot address this in a way that puts our most vulnerable families in jeopardy. Instead, we must strengthen our public programs by bringing down the cost of health care and reducing waste while making strategic investments that emphasize quality, efficiency, and prevention. In the name of our children, we reject the proposals of those who want to continue George Bush's disastrous economic policies."

Now It's Your Turn

This concludes this second installment in a 10-part series of the important issues facing our nation today. The issues presented in this series are the priorities of the Democratic Party. The methodology I used to rank the issues was based upon the number of words the issues received in the party platform.

My next hub in this series will cover the issue of Working for our Common Security.

In the mean time, as the heading above indicates, now it's your turn to tell me and all the readers what you believe is the most important issue facing our nation today. All comments are welcome, as long as they are not deemed libelous, slanderous, or otherwise defaming a person's character.

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Comments 1 comment

pgrundy 8 years ago

Great hub. I think we need to overhaul our financial regulatory system, and we also need to start holding corporate America accountable and foster more growth in the area of small business start-ups. That is where the good jobs will be. We need to support and encourage these businesses instead of letting corporate CEOs suck up all the money. We also need affordable health care so that those of us who do not want to be corporate slaves can do work we care about. I could easily make more money on my own than I make at my depressing bank job, but I can't get health insurance. If I could, I'd be out of there like, yesterday--and what's more, I'd be making a more worthwhile contribution to society than I am by helping them enrich their top tier.

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