Hillary’s latest op-ed in the WSJ today shows that she has the boldest and the clearest ideas to get the people and the government out of the giant mess that deregulation has caused. Surprisingly, she is not focused on rewarding Wall Street for its epic greed and predatory lending practices. Huh. Who could have predicted it?
This is not just a financial crisis; it’s an economic crisis. Therefore, the solutions we pursue cannot simply stabilize the markets. We must also deal with the interconnected economic challenges that set the stage for this crisis — and reverse the failed policies that allowed a potential crisis to become a real one.
First, we must address the skyrocketing rates of mortgage defaults and foreclosures that have buffeted the economy and ignited the credit crisis. Two million homeowners carry mortgages worth more than their homes. They hold $3 trillion in mortgage debt. Nearly three million adjustable-rate mortgages are scheduled for a rate increase in the next two years. Another wave of foreclosures looms.
I’ve proposed a new Home Owners’ Loan Corporation (HOLC), to launch a national effort to help homeowners refinance their mortgages. The original HOLC, launched in 1933, bought mortgages from failed banks and modified the terms so families could make affordable payments while keeping their homes. The original HOLC returned a profit to the Treasury and saved one million homes. We can save roughly three times that many today. We should also put in place a temporary moratorium on foreclosures and freeze rate hikes in adjustable-rate mortgages. We’ve got to stem the tide of failing mortgages and give the markets time to recover.
And Parts Deux and Trois:
Second, American taxpayers should have a voice and a stake in the resolution of this market crisis. If the Treasury proposal is enacted in its current form, the American government would assume enough financial risk to become the majority shareholder in the companies rescued by taxpayer dollars.
The American people are bearing the risk and therefore deserve to reap the rewards of a shared equity model. And mortgage securities bought by taxpayers must be valued accurately at prices disclosed in real time, with checks and reporting requirements to prevent abuse.
Third, taxpayers are being asked to bear an unparalleled degree of financial risk. We cannot allow taxpayers to take on this burden so that Wall Street and the Bush administration can hit the “reset button.” This historic intervention demands a historic shift in priorities: an end to the broken culture on Wall Street, and the broken economic policies in Washington.
Corporations that will benefit must be held accountable, not only to large shareholders but also to the American people, who are rightly tired of business as usual: short-term profit at the expense of long-term viability; lax oversight and regulation; obscene bonuses and golden parachutes regardless of performance; reckless risk-taking that has placed the markets in jeopardy; rewards for foreclosing on middle-class families and selling mortgages designed to fail; and outsourcing good jobs to serve short-term stock prices instead of America’s long-term economic health.
Congressional Democrats and Republicans agree that just throwing money at this problem will not solve it. Americans, this is our shining non-partisan moment that we have waited for. This is our chance to throw away things that are not working, and get back to things that do work. We must jettison trickle-down economics for good, and implement “trickle-up” economics, as FDR did to bring us out of the First Great Depression. Investing in the people and allowing them to participate in the economy ALWAYS makes the country work better. I mean, if people have no jobs, no homes and no money, how can they buy anything? DUH!
Today, Riverdaughter is suggesting that we blanket the blogosphere with Hillary’s ideas because we believe they will work to get America back on the right track again. I encourage everyone who cares about the 90% of Americans who are getting screwed by this disaster, to do the same. Promote Hillary’s plan far and wide. Maybe this time, the Powers That Be will listen.