Hawkins Says Bailout is "Lemon Socialism"
Howie Hawkins for Congress
25th District, New York
www.howiehawkins.org
Media Release
Calls for Public Banking to Socialize Gains, Not Just Losses
For Immediate Release: Sunday, September 28, 2008
For More Information: Howie Hawkins, 315-425-1019, hhawkins@igc.org
Howie Hawkins, the Green Populist candidate for Congress in the 25th District, will join today in the "No Welfare for Wall Street/ No Cash for Trash!" protest against the proposed $700 federal bailout of financial institutions holding mortgage-backed securities.
The demonstration sponsored by the Syracuse Peace Council will take place in front of the Federal Building in downtown Syracuse at 100 S. Clinton St. from 12 noon to 1:00 pm.
"If we are going to get socialism, let's get the Cadillac, not the lemon. The Paulson plan only socializes the losses. That's lemon socialism. The only socialism worth considering would socialize the gains as well as the losses. That means public enterprise, not public bailouts of private enterprise," Hawkins said.
"The only socialism worth considering would also be a democratic socialism. Democracy is not a bipartisan oversight board appointed by the leaders of the two corporate-financed parties whose pro-corporate economic agenda of deregulation and tax cuts for corporations and the rich enabled the orgy of predatory lending and speculation that created this now-collapsing Ponzi scheme in the first place. Democracy means boards governing enterprises that are elected by the public and the workers and/or consumers of those enterprises. They could be private consumer- or worker-owned cooperatives. They could be public enterprises at the municipal, county, state, or federal level. No one model best fits every industry. The key is democratic control by the affected interests," Hawkins added.
"If we can't stop this bailout, we need to get organized to stop the next one, because this one only keeps the Wall Street gamblers in the game a little while longer until the next big bankruptcy scare and short-term credit markets seize up again. If the feds can find $700 billion to bail out the Wall Street elite, it tells us we could just as well use the money to capitalize a public banking system to meet the needs of the vast majority of Americans," Hawkins said.
The first task of public banking, Hawkins said, was to deal with the foreclosure emergency, noting that 3 to 4 million homes face foreclosure in the next year and 10 million homes in total may face foreclosure as the adjustable rates and balloon payments of subprime mortgages progressively kick in over the next few years.
"To protect homeowners and tenants, we need to re-establish the New Deal-era Home Ownership Loan Corporation to purchase troubled mortgages from banks and restructure them on reasonable terms to enable people to stay in their homes as owners or, if they can't afford that, at market rate rents. The original Home Ownership Loan Corporation refinanced one mortgage in five during the Great Depression, saved a million homes from foreclosure, and turned the government a profit by the time it was closed in 1951," Hawkins said
Hawkins also called for a system of public development banks, citing the precedent the 1932-1953 Reconstruction Finance Corporation, which helped finance economic recovery during the Great Depression and the mobilization of the economy to support the World War II effort.
"A public development bank, with a federated structure with local and state branches, is needed to finance public works projects and public and private enterprises to get the real economic of labor and industry going again. A public banking system could finance the building a sustainable 21st century infrastructure based on renewable energy and resources. We need to rebuild and retool our manufacturing base around green technologies, build solar-powered railways to displace fossil-fueled roadways, and retrofit our buildings for energy efficiency and renewable energy. Building a green economy is the path to economic recovery, energy security, and climate stability. But without public direction of investment, these priorities will remain neglected," Hawkins concluded.
Hawkins will circulate the following "To Do" list he suggests for the movement against the bailouts:
A "To Do" List for the Anti-Bailout Movement
No More Bail Outs for Insolvent Financial Corporations
Open the Books Government audits of the big financial corporations, including their "off-shore" and "off-the-books" books, to assess their solvency and risks to the economy.
Enact a Moratorium on Foreclosures 3 to 4 million homes face foreclosure in the next year and up to 10 million homes over the next few years.
Refinance Subprime Mortgages Establish a public housing bank, similar to the Home Ownership Loan Corporation (1933-1951), to takeover subprime adjustable-rate mortgages based on home prices inflated 70 percent above the constant 100-year trend line and refinance these mortgages into long-term fixed-rate mortgages based on 100-year trend line price. Allow subprime mortgage holders who can't pay reasonable long-term mortgage to stay as tenants at market rates. Expand affordable housing funding for those who cannot afford market rate rents.
Democratize Nationalized and Subsidized Corporations Ensure government returns on debt and equity investments and public transparency and accountability through government-appointed directors on the boards of financial corporations aided by government bailouts and buyouts, including JP Morgan, Bear Stearns, Fannie Mae, Freddie Mac, AIG, Ford, Chrysler, and GM.
Nationalize the Federal Reserve System Make our central banking functions public and democratically accountable, including full public ownership and control of the regional Federal Reserve Banks. Replace all Federal Reserve officers now appointed by the banks with government appointed officers.
Establish a Public Development Bank, like the Reconstruction Finance Corporation (1932-1953), to finance recovery of the real economy of labor and industry through public works projects and public and private enterprises to meet public goals determined by a democratic planning process.
Re-establish the Postal Savings Bank Restore the US Postal Service's savings bank service to serve low-income people who have no banks in their neighborhoods or cannot afford the deposit requirements at commercial banks and need an alternative to predatory check cashers, payday loans, and pawnshops.
Re-Regulate the Financial Industry Consolidate the dispersed and overlapping array of federal agencies regulating banks and financial institutions into one agency. Among the regulatory reforms needed: trade all securities and commodities on regulated exchanges, require higher margin requirements for traders, restore the ban on interstate commercial banking, restore caps on interest rates.
End Predatory and Discriminatory Lending Strengthen laws, regulations, and prosecution against predation and discrimination in the credit industry.
Restore Glass-Steagall Act Separation of Consumer-Oriented Commercial Banks and Speculative Investment Banks The Bank of America/Merrill Lynch merger and bank holding company status for investment banks JP Morgan and Goldman Sachs only put more of our savings in bank accounts, pension funds, mutual funds, and insurance reserves at risk to cover their speculative investment losses.
Enforce Anti-Trust Laws No business should be "too big to fail."
Rewrite Bankruptcy Laws to favor debtors once again, not creditors. Protect millions of people from predatory mortgage and credit card lenders, as well as medical bills the private insurance companies won't cover, which is the cause of over half of all consumer bankruptcies.
Progressive Tax Reform Make the corporations and investors that got rich from 35 years of tax cuts, deregulation, and predatory speculation help pay for the economic recovery.
Cut Military Spending $1.5 trillion in military-related spending for FY2009. $3 trillion in coming expenses already accrued from the Iraq and Afghanistan wars. We are paying to make the world safe for exploitation by global corporate elites at the expense of our physical and social infrastructure at home.
Stop the Privatization of Social Security, Health Care, and Education Corporate interests are already planning to use the government fiscal crisis made worse by the Wall Street bailouts to come after Social Security, Medicare, and public schools with privatization schemes. Tax cuts for the rich, corporate welfare, and bloated military spending caused the fiscal crisis, not these social programs.
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