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Time for Wall Street to bail out Main Street

Posted: October 9, 2011 - 12:10am

In recent testimony before Congress, Federal Reserve chairman Ben Bernanke has warned that U.S. economic recovery is “close to faltering.” He went on to explain, “Monetary policy can be a powerful tool, but it is not a panacea for the problems currently faced by the U.S. economy.”

“Fostering healthy growth and job creation is a shared responsibility of all economic policymakers,” he said.

I am emphasizing Bernanke’s remarks about “shared responsibility” because many of us adopt this approach in our daily lives and it gets at what is wrong with our economic policies during this critical time. Although Bernanke avoids weighing in on proposals before Congress, he did note in a speech before the Economic Club of Minnesota that the recession Obama has inherited from his Republican predecessor was more calamitous than had previously been thought. This is why many economists warn now is not the time for government to be retreating from job creation. Now is the time for a shared responsibility to keep our economy from faltering.

President Barack Obama has responded with an American Jobs Act focused on 1) tax breaks for small business, 2) creating jobs modernizing our roads, airports, schools and waterways and 3) keeping teachers, cops and firefighters on the job. While less specific about how to pay for the proposal before Congress, Obama once again brings forth the notion of shared responsibility by referring to his previous revenue proposals of ending the tax breaks for those making over $250,000 a year and/or eliminating tax loopholes for the hugely profitable big oil companies.

Once again the Republican leadership, fueled by the tea party zealots, announce these revenue measures as dead on arrival. They claim taxing the rich and big oil will hurt the economy. If this is true then why is the economy in such a world of hurt? After all the Bush tax breaks for the top 1 percent have been in effect for at least a decade and the oil companies have been enjoying tax breaks for 66 years. Using the logic of the Republican leadership, one would assume that if the overall health of our economy is so tied to high profit margins for the rich and big oil then we would have never experienced this recession. Right? Well, reality says otherwise and clearly suggests that the real reasons for opposing these revenue options is a mixture of wanting the president to fail and letting corporate interests rule in Congress. Why else do they refuse to consider these taxes even when according to a Washington Post-ABC poll (July 14-17 2011) 54 percent of Republicans favor raising taxes for incomes over $250,000 and 55 percent of Republicans favor raising taxes for oil and gas companies?

No wonder Occupy Wall Street protests started to spontaneously emerge in major cities across America. While the protests are loosely organized, there appears to be a common theme. According to New York City public radio reporter Arun Venugopal, “They feel like corporate interests really take precedence over the voices of the masses. And they’re trying to change that.” Even Chairman Ben Bernanke is somewhat sympathetic to the message of these protests.

When appearing before Congress, Bernanke was asked about the Occupy Wall Street protests.

“I would just say that very generally people are quite unhappy about the state of the economy and with some justification.”

“At some level I can’t blame them. Nine percent unemployment and slow growth is not a good situation,” he said.

Bernanke was also asked by a senator, “In light of the protests, did Wall Street’s greed and recklessness lead to the crisis?” His response: “Excessive risk-taking had a lot to do with it. So did the failures of regulators.”

In the context of what brought on the economic crisis and what we need now — job creation and consumer spending; in the context of these protests and the wide public support for raising revenues from the top 1 percent and big oil, shouldn’t our congressional leadership embrace the notion of shared responsibility? We as taxpayers bailed out Wall Street to the tune of $700 billion because they were too big to fail. Isn’t it time now that Wall Street bail out Main Street? Aren’t the masses of unemployed and underemployed equally too big to fail?

If yes, then start by passing the president’s jobs bill funded by a tax on millionaires as proposed by Senate Democrats. Let’s leverage the banks we saved into lending again. Let’s eliminate the $2 billion tax break while the five largest oil companies (Exxon, BP, Conoco, Shell and Chevron) have, according to the Wall Street Journal, over $59 billion in cash resources. These are all healthy options for having a shared responsibility in keeping our economy from faltering.

• Troll is a longtime Alaska resident and resides in Douglas.

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