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Web Letter

You also have to keep in mind that perhaps the main reason for keeping the post-World War II social contract in place was the cold war and the more-imagined-than-real threat of communism. No one complained about autoworker wages and benefits and the opportunties they provided in the 1960s and the early 1970s.

Alan Davidson

Brooklyn, NY

Jan 7 2009 - 12:37pm

Web Letter

It's really quite remarkable to get through an article of this length about the economy, with so many rehashes of the well-hashed and so many what-Obama-must-dos, without mentioning war, imperialism or the military. The author should get a medal.

Gordon Fitch

New York, NY

Jan 7 2009 - 9:42am

Web Letter

Agreed: " To save America, that social contract has to change, and the economic model on which it is based has to be modified."

Agreed: "The United States is no longer merely in crisis; it is in a state of emergency."

Agreed: "The three phalanxes of attack are clear."

Bad Idea: "provide the capital and asset support for the banks and shadow banks."

We have no idea what is on these banks' balance sheets. Indeed, they even refuse to divulge what they have done with taxpayer monies. The public could end up losing most of the $15 trillion in loans and guarantees it now is responsible for, and trillions more.

We need to nationalize the banks and scrub their books through an FDR Bank Holiday or a Swedish Plan. Mr. Madrick's proposal ignores what any use of taxpayer money needs: "due diligence." And there is plenty of due diligence needed before the taxpayer backs $60 trillion in credit default swaps and $500 trillion in derivatives.

What we need going forward is a public central bank operating a public utility model of banking in the United States. This would contain currency and credit creation within healthy limits. Controlling the price and amount of credit could direct capitalism towards renewable and sustainable economic activity. The old banking model of rewarding highest profit over highest use of capital rewards rapacious consumption and pollution over thoughtful, sustainable investment. The profit from such a model could go far in paying for the new social model the author proposes.

Agreed: "stanch the mortgage defaults;." But how do we do this? The author offers no real ideas on the matter. What needs to happen is the inclusion of home mortgage, credit card and auto loan "cram downs" in the bankruptcy process. Community-based groups such as ACORN are ready and able to put together prepackaged bankruptcies, and existing bankruptcy judges know for the most part who does and doesn't deserve the bankruptcy process.

Agreed: "stimulate the economy aggressively." What better way to put money in the most deserving hands than to move to "Medicare for All"? Over 50 percent of home foreclosures and bankruptcies are caused by medical bills. "Medicare for All" would immediately underwrite states, cities, counties and school districts in the public sector, while enabling businesses to use the healthcare money to move to a thirty-two-hour work week, supplementing the lost pay with said money. The author's omission of a comprehensive single-payer plan for all Americans is fatal and telling.

Overall, this article posits the problems and the lines of attack but falls far short of real answers. In the case of rescuing banks and shadow banks, the author's suggestion is fraught with unnecessary and catastrophic risk.

Michael McKinlay

Hercules, CA

Jan 2 2009 - 3:10pm

Web Letter

Why is every one still tiptoeing around the fact that we have shipped all our industries to Asia? The Keynesians, the Anglo idiots, are still screaming for more of the same; the Marxist Chinese are yelling to keep it coming, and the politicians are voting on creative ways to print more money. Ten percent of us own 80 percent of the wealth, and we are still trying to sell the lie that creating wealth is done by finding labor that will work for subhuman wages. Thank you Mr. Reagan, thank you Mr. Clinton. We went from the great economic theories of "protectionism is a sin," to raising boats and tides. Wow!

And we have just elected the same crew to political power.


caribou, me.

Jan 1 2009 - 11:32pm

Web Letter

When you support "outsourcing" and "free trade," your economic policy is essentially that of the Bush administration. If Obama goes along with"mainstream" Democrats, he can't fix the economy and will fail. I guess I need to join a new party or go independent.

Pervis James Casey

Riverside, CA

Dec 28 2008 - 5:15pm