A New Way Forward

What seems most immediately alarming about the bailouts and the $787 billion stimulus, write Leo Hindery and Donald Riegle in the April 20 issue of The Nation, are the countless indications that the rescue packages still fall woefully short of what is needed to confront the emergency economic conditions we face.

With the US economy having contracted at a stunning rate of 6.3 percent in the last three months of 2008, a quarterly performance rivaled only four times since the Great Depression and getting worse in '09; a growing unemployment rate, now at 12 million people, and foreclosures up 81 percent, many economists are arguing that this current stimulus is bound to fail, inevitably pushing perhaps millions more Americans over the brink of financial collapse.

This is compounded by the central problem with Obama's bailout from the point of view of experts like former IMF chief economist Simon Johnson, Joseph Stiglitz, Paul Krugman, James Kwak, George Akerlof, and Robert Shiller -- that recovery will fail unless America breaks up the financial oligarchy. The solution is to have the government temporarily take over failing banks, break them up and sell them off in the private markets. This is not the current plan.

As Simon argues, this process isn't theoretically difficult. The challenge is political and lies in facing down the banking establishment and Wall Street to create a bailout that upends business-as-usual, embraces regulation and transparency, repudiates the blind and unconditional faith in markets that got us into the current mess and that values economic growth, but protects the well-being of the public before the bank accounts of the world's financial elite.

Informed and inspired by Johnson's message, a young cohort of activists, backed by an illustrious group of online organizing veterans like Zephyr Teachout, Joe Trippi and Mike Lux, recently launched A New Way Forward to raise awareness and support for alternative bailout plans and to protest the current plan. In the first three weeks since the group's March launch, 8,000 people have signed up to participate in the ANWF's first tangible effort -- a national series of creative actions this Saturday, April 11, designed to muster opposition to the current bailout plan.

The Nation's William Greider recently explained to Bill Moyers why ANWF has him excited.

There are currently sixty events (or "bonfires" in Greider's words) planned nationwide on April 11. Some examples: 165 people have so far pledged to participate in a protest at Central Ave and Thomas Road outside of AIG Headquarters in Phoenix. 288 activists have confirmed that they'll be marching in front of the Bank of America in Chicago. More than 500 citizens have committed to a rally in New York City's Union Sq Park. This is just a small sampling of what's going on and new plans are being hatched daily.

See if there's an event planned in your town. If not, check out ANWF's tips on how to pull off a protest and plan your own rally. Also useful: Sign the ANWF pledge. Help spread the word about the actions. Read (and pass on) WireTap's Kristina Rizga's interview with Tiffiniy Cheng, a co-founder of the group, for an inspirational sense of what's motivating people, and visit The Nation's special Meltdown page for a multimedia guide to the economic crisis and what you can do about it.

PS: If you happen to have time on your hands and want to follow me on Twitter -- a micro-blog -- click here. (You'll find slightly more personal posts, breaking news and lots of links.) If you have no idea what Twitter is and want to know, read this "Non-fanatical Beginner's Guide to Twitter" by my friend Deanna Zandt.

Comments (25)

1. PETER: "....immediately alarming about the bailouts and the $787 billion stimulus, write Leo Hindery and Donald Riegle in the April 20 issue of The Nation, are the countless indications that the rescue package still falls woefully short of what is needed to confront the emergency economic conditions we face.....With the US economy having contracted at a stunning rate of 6.3 percent in the last three months of 2008,......"

   Peter, you know that conservatives knew this out of the gate and tried hard to point out most of the nearly $800 billion weren't "stimulus" at all.

   Here's what I think happened: Magic's brain trust all thought that the Recession would (naturally) end sometime this year, hence they projected a GDP drop of just 1.2% for the full FY (Oct. `08-Sept. `09). They thought the $200 billion or so of real "stimulus" and the admin., would get the credit when (their) expected recovery took place. They blew it BIG!

   As we all know now, GDP dropped 1.6% (1/4th of the annualized 6.3%) just in the last 3 mos. of `08. In Jan.-March, I'd hang the GDP drop at an annualized 7%....and the full FY at a huge MINUS of 6~7%!

   The MSM won't inform the public as to how badly amiss Magic's budget is....even the CBO estimate (of $2 more Trillions in deficits than Obama's) is way too optimistic since it was based on a GDP drop this FY of just 3%.

   I applaud your effort to point "A New Way Forward"....even though we would direct the stimulus in different ways, but at least we agree that the $800 billion that was crammed down the country's throat, and which no one read, are mostly NON-STIMULATIVE!

   Posted by Happy at 04/07/2009 @ 4:47pm

2. Peter, I don't know if temporarily nationalizing the banks and then selling them off to the private sector is the answer. I understand the need for more oversight, but if the banks are overregulated and are not allowed to take on some risks, then they're bound to fail. I say that because the Government isn't good at gauging financial risks very well.

   Now granted, I think they need to keep some of the profit they make on hand so that it can be used to offset any major financial setbacks, but at the sametime, I don't want to hogtie their ability to make a profit either.

   Also, this thing about the CEO bonues, that should be the least of your concerns, what lay people need to focus on is getting something in place that would help them understand how financial insitutions apply their risk models. You should be thinking about having transparency on that and not necessarily on what the bank is spending.

   Posted by ACook at 04/07/2009 @ 7:14pm

3. You are acting as an apologist for thieves and the fact that you don't know this is somewhat frightening.

   Posted by snowball666 at 04/07/2009 @ 8:47pm

   No, I'm not acting as an apologist, I'm saying we don't need to swing the pendulum so far back the other way. Too much heavy-handedness will cause a financial collapse as well.

   As far as the liquidity problem, that can be remedied by establishing guidelines for keeping some or half of their profits in capital reserves. To my knowledge, none of the banks had set aside anything to help clear them of their toxic assets.

   Posted by ACook at 04/07/2009 @ 9:44pm

4. "Here's what I think happened: Magic's brain trust all thought that the Recession would (naturally) end sometime this year"-----Posted by Happy at 04/07/2009 @ 4:47pm

   And you predicted it would end....when?

   Posted by Mask at 04/07/2009 @ 9:51pm

5. And you predicted it would end....when?

   Posted by Mask at 04/07/2009 @ 9:51pm

   Had McCain won, it would be ending any time now.

   As it is, until your Messiah is done rolling out his gig, nobody trustworthy can predict when the recession will end; least of all, anyone associated with forecasting 1.2% GDP drop this year and 3% growth next year!

   Posted by Happy at 04/07/2009 @ 10:38pm

6. I applaud your effort to point "A New Way Forward"....even though we would direct the stimulus in different ways, but at least we agree that the $800 billion that was crammed down the country's throat, and which no one read, are mostly NON-STIMULATIVE!

   Posted by Happy at 04/07/2009 @ 4:47pm | ignore this person | warn this person

   ----------------

   Happy; Its time to just become that which we despise most and just utter "we told you so"! The "Obamanation that makes desolation" in the W.H. and his accomplices the Demoncrats in congress have accomplished their sole purpose of grabbing dictatorial power over the government and economy of the nation.

   Having rewarded all their cronies with $787 billion of pork spending for leftwing entitlements, unions, and social engineering, now they are going about consolidating and entrenching it perhaps for decades.

   What does it matter that the FOOLS that voted them in now partially see their myopic ignorance as they grasp for straws and try to intellectualize, rationalize, and justify the failures they have blindly conspired to bring about that will destroy the nation? Let the dogs return to their vomit!

   Posted by comancheamerican at 04/07/2009 @ 11:31pm

7. Had McCain won, it would be ending any time now.

   Posted by Happy at 04/07/2009 @ 10:38pm

   that is just dumb and you know it.

   sheesh.

   mr. knownothing about economics with his sidekick gramm......

   sheesh.

   Posted by frosty zoom at 04/07/2009 @ 11:53pm

8. Happy, be sure to invest in all the "tea" (green)in China that you can, it is the only green currency that will keep up with the inflation from Obamanation stagnation you will have here!

   "Under the Obama budget, the Congressional Budget Office projects that the national debt will soar over the next 10 years from 40 percent of GDP today to a shocking 82.4 percent. (Ronald Reagan left office with the national debt at 42 percent of GDP).

   The president's budget also states that total federal borrowing will grow by $2.7 trillion this year alone, an increase of 27 percent in one year!

   The budget President Obama proposes for this year increases federal spending by an incredible 34 percent over the previous year, with a total of $4 trillion in federal spending, the highest ever."

   Posted by comancheamerican at 04/08/2009 @ 01:02am

9. Gonna have to go with frosty on this one. McCain admitted to being an amateur when it comes to economics for one and for two you are making nothing but a broad and unfact based guess. You and Ms. Cleo have something in common right now.

   Posted by Cccomfo1 at 04/08/2009 @ 03:32am

10. Had McCain won, it would be ending any time now.

    As it is, until your Messiah is done rolling out his gig, nobody trustworthy can predict when the recession will end; least of all, anyone associated with forecasting 1.2% GDP drop this year and 3% growth next year!

    Posted by Happy at 04/07/2009 @ 10:38pm

    Also judging by the fact that McCain "helped" to draft the first bailout and fully supported it that makes him just as guilty.

    Posted by Cccomfo1 at 04/08/2009 @ 03:33am

11. "nobody trustworthy can predict when the recession will end;"---Posted by Happy at 04/07/2009 @ 10:38pm

    I didn't ask anybody trustworthy...I asked you!

    heheh

    Posted by Mask at 04/08/2009 @ 07:58am

12. 'It is especially disturbing that [Larry] Summers got most of the $8 million from a major hedge fund at a time when such totally unregulated rich-guys-only investment clubs stand to make the most off the Obama administration's plan for saving the banks....It was Summers, as much as anyone, who in the Clinton years prevented the regulation of the hedge funds that are at the center of the explosion of the derivatives bubble, and the fact that D.E. Shaw, a leading hedge fund, paid the Obama adviser $5.2 million last year does suggest a serious conflict of interest.' -- Robert Scheer -- The Nation -- 8 April, 2009

    Posted by HonestLiberal at 04/08/2009 @ 11:13am

13. 'I feel your pain.' -- President Bill Clinton

    -------

    60 Minutes interview 22 March 2009

    President Obama (laughing):'I just want to say that the only thing less popular than putting money into banks is putting money into the auto industry'

    Interviewer Steve Kroft: 'You're sitting here. And you are laughing. You are laughing about some of these problems. Are people gonna look at this and say, "I mean, he's sitting there just making jokes about money." How do you deal with, I mean, explain the...mood and your laughter... Are you punch drunk?'

    President Obama: 'There's got to be a little gallows humor to get you through the day'

    --------

    'Tragedy tomorrow, comedy tonight!' -- Something Funny Happened on the Way to the Forum

    Posted by HonestLiberal at 04/08/2009 @ 11:15am

14. A CounterPunch Special Investigation -- How Barack Obama Fronted for the Most Vicious Predators on Wall Street -- 5 May 2008

    '...Seven of the Obama campaign's top 14 donors consisted of officers and employees of the same Wall Street firms charged time and again with looting the public and newly implicated in originating and/or bundling fraudulently made mortgages. These latest frauds have left thousands of children in some of our largest minority communities coming home from school to see eviction notices and foreclosure signs nailed to their front doors. Those scars will last a lifetime.... On February 10, 2005, Senator Obama voted in favor of the passage of the Class Action Fairness Act of 2005. Senators Biden, Boxer, Byrd, Clinton, Corzine, Durbin, Feingold, Kerry, Leahy, Reid and 16 other Democrats voted against it. It passed the Senate 72-26 and was signed into law on February 18, 2005.... Three days before Senator Obama expressed that fateful yea vote, 14 state attorneys general, including Lisa Madigan of Senator Obama's home state of Illinois, filed a letter with the Senate and House, pleading to stop the passage of this corporate giveaway...'

    Posted by HonestLiberal at 04/08/2009 @ 11:20am

15. 'Tragedy tomorrow, comedy tonight!' -- Something Funny Happened on the Way to the Forum---Posted by HonestLiberal at 04/08/2009 @ 11:15am

    "Those weapons of mass destruction have got to be somewhere!" --President George W. Bush, joking about his administration's failure to find WMDs in Iraq as he narrated a comic slideshow during the Radio & TV Correspondents' Association dinner, Washington, D.C., March 24, 2004

    Posted by Mask at 04/08/2009 @ 11:42am

16. 'I was very young. How will I explain this to my children?' -- Bill Moyers, telephone conversation with Laurence Silberman after it was revealed that Moyers, when chief of staff to President Lyndon Johnson, had requested the FBI to investigate Barry Goldwater's campaign staff for evidence of homosexual activity.

    Posted by HonestLiberal at 04/08/2009 @ 1:30pm

17. Most Banks are now regulated. They should be considered separately from non- regulated financial institutions. The recent take over of troubled banks to form mega banks should be reversed.

    Investment institutions should be separated from banking institutions and standards should be set for their operation. There must be oversight to prevent the thievery and scam operations discovered to be the practice in the last ten years.

    The Justice Department must find the thieves and prosecute them. All found guilty should face confiscation of their assets and jail terms.

    Many of the mega banks operate internationally. If they operate in the United States they must be kept to the same standards as other banks.

    When it can be proved that all bankers and banking institutions are honest and operate in an ethically responsible fashion; then we can re-evaluate the need for controls.

    Trust but investigate and confirm

    Posted by downeast_ggo at 04/08/2009 @ 1:45pm

18. It is and will always be YOUR MESS, Rio...not that 'Demon'crats didn't help, but you will NEVER be able to hang all our problems on anyone other than Dubya.

    Posted by snowball666 at 04/08/2009 @ 08:02am |

    Not defending Dubya here. Certainly the high deficits are his fault.

    Not sure dubs was in on the revolution.

    Elections anymore might be like changing the ears on mr. potatohead.

    Posted by gangpapist at 04/08/2009 @ 3:39pm

19. Sixty "bonfires" all around the country, each consisting of less than 1,000 people, are not going to persuade any politician, much less the President, to have the federal government force the major banks into receivership. By picking Summers and Geithner to head up his economic team, Obama made it clear that he believes in the preeminence of the financial sector both now and in the future. Or, for those who are more cynical, he demonstrated that the millions of dollars in campaign contributions he accepted from the financial sector worked.

    If you really want to have an impact, organize a massive e-mail campaign pledging to withhold contributions from any politician (including Obama) who does not advocate putting the major banks into receivership. A million such pledges, particularly if they came from people with a record of campaign donations, might have the desired impact. Or at least some impact. Another alternative that might work would be to turn the sixty "bonfires" into sixty large riots that cause significant disruption and property damage. It wouldn't be pretty, but at least it would get a lot more attention from politicians than sixty small, polite gatherings.

    Posted by taikan at 04/08/2009 @ 8:50pm

20. Posted by snowball666 at 04/08/2009 @ 08:02am | ignore this person | warn this person

    U.S. Senate Committee on Banking, Housing, and Urban Affairs---who is in charge? Chris

    Chairman of the Financial Services Committee.----who is in charge? Barney

    Gramm-Leach-Bliley Financial Services Modernization Act---signed by? Bill

    The only major piece of regulatory legislation enacted during the Bush years was the Sarbanes-Oxley Act, which dramatically increased regulation of corporate financial disclosures. The really big regulatory changes being pointed to now as possible culprits for the crisis date back to Bush's predecessors: Bill Clinton, Ronald Reagan, even Jimmy Carter and Gerald Ford. So the popular Democratic refrain that "Bush-era deregulation" is to blame for our troubles is a little hard to square with the evidence. What is true is that most Bush-era financial regulators were less than enthusiastic about the very act of regulating, and that Bush's "ownership society" push glossed over a lot of potential dangers. Bush didn't cause the financial regulatory breakdown, but he didn't jump in to fix it either.

    LIE all you want to the record speaks for itself! Demoncrats have had a "headlock" on financial services and banking for DECADES, and now they are blaming ANYONE but themselves!

    Posted by comancheamerican at 04/08/2009 @ 10:47pm

21. "The really big regulatory changes being pointed to now as possible culprits for the crisis date back to Bush's predecessors: Bill Clinton, Ronald Reagan, even Jimmy Carter and Gerald Ford."----Posted by comancheamerican at 04/08/2009 @ 10:47pm

    Wait a minute! RIO...what's that name between "Bill Clinton" and "even Jimmy Carter", that you are listing as one of your "possible culprits"?!?!?!?!?!?!???

    Posted by Mask at 04/09/2009 @ 07:50am

22. 'Thanks to an obscure tax provision, the United States government stands to pay out as much as $8 billion this year to the ten largest paper companies. ... Whether or not Congress gets around to turning off the spigot, the episode is a useful reminder of the persistently ingenious ways the private sector can exploit even well-intentioned legislation.' -- Christopher Hayes -- 2 April, 2009 -- The Nation -- http://www.thena tion.com/doc/2009042 0/hayes?rel=hp_c urrently

    'Since last September Barack Obama has been trying to pull off the tricky shot of backing bailout schemes at taxpayers' expense for the Wall Street operators who have brought the economy to its knees, while simultaneously presenting himself as a populist crusader battling for economic justice and the regular folks on Main Street.' -- Alexander Cockburn -- http://ww w.counterpunch.org/c ockburn03202009.ht ml

    Posted by HonestLiberal at 04/09/2009 @ 08:28am

23. Elections anymore might be like changing the ears on mr. potatohead.

    Posted by gangpapist at 04/08/2009 @ 3:39pm

    That's pretty good! The scary thing is that it is evidently true too.

    Posted by Wolfgang1 at 04/09/2009 @ 11:18am

24. To President Barack Obama April 9, 2009

    AN OPEN LETTER TO ALL WHOM IT MUST CONCERN

    Mr. President you are MY MAIN MAN with a HEART GOOD AS GOLD and a plan that has our communed needs at the forefront.

    But I have doubts as many others that your will as has been stated by your words to the American people and your will to do good is in jeopardy at this time.

    You have many that need to go. And not in time --- but right now.

    I watched you clinch your jaws and grit your teeth after signing some bill last night-my first thought was did MY MAIN MAN compromise his HEART OF GOLD?

    I told my wife she said "Honey write Barack and tell him in plain English dear", I suppose that tells you where I stand around here. And maybe all believe the same thing. WHO KNOWS?

    Now the web is full with good information of the giant PONZI con that is being run on you and us right now. The bottom line is that the money gone never was. And that is where the rub comes in for you and we alike.

    And the creators of that PONZI con is on your staff right now. And once you get the firm grip with all information needed they------ need to go on down the road from whence they came. Now I am not concerned that what they have done up to this time is going to sink OUR GREAT AMERICAN SHIP because undoing wrongs is what lawyers do everyday and you know how to play that game.

    I have suggested before but maybe you did not get the message --- what is needed today is a meeting of the minds called a Strategic Planning and Development Stimulus Summit with many voices of renown to all chime in to appeal to your ear and senses.

    Could be that after such meetings warrants of arrest could be generated for many o

    Posted by DWIGHTBAKER at 04/10/2009 @ 05:04am

25. To President Barack Obama April 9, 2009

    AN OPEN LETTER TO ALL WHOM IT MUST CONCERN #2

    And the creators of that PONZI con is on your staff right now. And once you get the firm grip with all information needed they------ need to go on down the road from whence they came. Now I am not concerned that what they have done up to this time is going to sink OUR GREAT AMERICAN SHIP because undoing wrongs is what lawyers do everyday and you know how to play that game.

    I have suggested before but maybe you did not get the message --- what is needed today is a meeting of the minds called a Strategic Planning and Development Stimulus Summit with many voices of renown to all chime in to appeal to your ear and senses.

    Could be that after such meetings warrants of arrest could be generated for many of the proven lawless in their imprudent and illegal actions taken against our communed held wealth of We The People in the United States of America.

    Dwight Baker We The Peoples Advocacy WTPA Dbaker007@stx.rr.com

    This is funny and will not cost one thin dime to watch then set back and ponder. http://www.owenandpayne.com/

    Posted by DWIGHTBAKER at 04/10/2009 @ 05:07am