10 Things I Wish the Obama Administration Would Do to Fundamentally Improve the Economy

I mean besides pass a jobs bill. Here they are in no particular order.

1. Pass a meaningful health insurance reform bill, Congress, so POTUS can sign it. What many people overlook is how it will unstick our economy to have affordable, universal (or near-universal) health insurance coverage. We're a nation premised on mobility--go where the opportunities are. Some of us are locked into jobs we can't change because a move to a new job would mean being denied health care because of a pre-existing condition. Knowing that you could get high quality, affordable and portable health insurance no matter your job situation would benefit entrepreneurs and small business owners specifically, but it'd help everyone overall.
2. Make the banks swallow the bitter pill of mortgage principal write-downs. But do it in a way that's consistent with the green economy we all need and want: tie mortage reductions to permanent changes in the "sustainability quotient" of a house. Weatherization, solar panels, landscaping that includes vegetable gardens, xeriscaping in arid climates--credit energy-saving renovations having to do with home buying and maintenance. Encourage people to put permanent "green equity" into their houses. The idea borrows from location efficient mortgages and other lending tools that take into account proximity to and use of public transportation. Make this voluntary for all who want it, and it takes some of the moral hazard out of reducing the principal for people about to be foreclosed on too. I've written about this previously, here. Ease people's obligations or they'll be locked down and drowning in their homes as well.
3. Bring back Glass-Steagall. We need to separate plain vanilla retail banking services that most consumers use from the high-risk, high-gain roulette of Wall Street's more exotic offerings. Last I heard, even Senator John McCain supports the reinstatement of Glass-Steagall, the 1933 Depression-era legislation I learned about from brave presidential candidate Obama. Now I'd like to see President Obama act on the things he outlined in his Cooper-Union speech: where are the international collaborations with overseas regulators in other countries to enact restraints on transnational mega-banks you mentioned? I seem to recall you saying specifically the "Basel Committee on Banking Supervision, the International Accounting Standards Board, and the Financial Stability Forum" needed to cooperate to ensure casino banking doesn't tank any one country and take others down with it. **cough Goldman Sachs, Greece **cough**

        4. Financial Crisis Responsibility Fee? Pass this, as soon as you can.

        5. Encourage and strengthen federally-insured credit unions to make sure retail banking is safe for Mom and Pop Main Street. Can't you figure out some sort of incentive so that local banks that lend and extend credit in their communities are rewarded? As opposed to the mega-banks we the taxpayers bailed out, who still won't lend or extend credit to new businesses even though the money available to them is pretty much free? By the way, a lot of people are already fleeing their big, stupid, unresponsive mega-banks with the chiseling fees, and instead embracing their local community banks and credit unions. Ordinary people need a place to shelter their savings and do unexciting things with their money. And, if the Too Big to Fail banks do go down, it's best if everyday folk have a place to wait out the storm while the millionaires and billionaires take their lumps. And NOBODY, I repeat, NOBODY likes it when the losses are socialized to the many and the gains privatized for a few. Make this your mantra.

6.    Make salarized stock industry standard, somehow. Buried deep in a NYT Magazine article about the process of determining executive compensation at Wall Street firms that had accepted taxpayer bailouts is a description of how this works: it puts "a long-term performance measure — the fluctuating value of the stock — into the equation" of bonuses supposedly rewarding performance. "Salarized stock" is dispensed along with pay, but can't be cashed in until 2-4 years have passed. No more instant muggings. Make the muggings stretch out over years before they pay out. This would also be good for corporate America in general, which defines success on a quarterly basis. Just how do we innovate our way into the future if the free-market carrot is only ever 3 months away? "The future" cannot be defined as "3 months from now." We need longer horizons.

7.     Get your Treasury appointments in place.

8.     Shake up the Treasury and Fed with the promotion of three important people into higher profile positions: Elizabeth Warren knows how to explain high finance to regular people. She should be doing this more, and in fact she recently said the commercial real estate market's bubble will soon pop with ugly results. So what are you going to do about that, bail out big banks and insurers, again? 

9.     Brooksley Born knew derivatives would blow up. Instead of hiding this Cassandra who was given important though obscure assignments on a commission, give her the reins and the whip to do more, publicly.

10. Finally, you need to make a place for Noreena Hertz in your administration somehow. She's at the forefront of ethical capitalism, which sounds like two mutually exclusive terms (jumbo shrimp?) but it's how we must go forward. Yes, I know she's British. So what. If Goldman Sachs pays her money to tell them about ethical capitalism, have her knock some sense into them while she's at it.

Realize that you must make your differences with Bush's approach to Wall Street clear and apparent, or else let everyone believe that you are more of the same. And as time drags on, his failures will become your failures. One way you can do this is to get rid of anyone who had NO CLUE the financial meltdown was coming. Is Larry Summers really pulling his weight? Bernanke? Another way you can put distance between Bush's fuck-up and your own approach is to break up the boy's club of Wall Street. Put obviously brilliant and able communicators who are women in charge, of something. 'Cassandra' is a stupid term that combines retroactive wisdom with impotence; what Cassandras need is to be listened to and obeyed before it's too late. Enlist true populists like Congressman Alan Grayson to shape regulations via legislation.

Cynematic didn't have the time to write this post either, which is why it ended abruptly. She wishes she could type with her toes, then she could work on two projects at once with all twenty digits. Her pitifully ignored blog is P i l l o w b o o k.

Comments

[DJD]

Amen Sista! I wish they would move on Healthcare. So many Americans are now moving off their Cobra. Many of these families have small children and will have no health insurance and will not have the means to pay for it.

In case in point my family. My husband was laid-off 2 years ago from the media business(he was a local tv station manager). More than half of the media business has been cut down so finding another job was next to impossible. He is now starting his own Media Consulting business. The biggest roadblock to making this venture a success is healthcare.

Why can't the Federal Government create a pool of people(small businesses and families) that the insurance companies have to insurance. Almost like a community co-op of people who need to purchase insurance and the insurance industry can bid who takes the pool.

I think there are many resolutions to the insurance crisis. I just wish congress would put egos and partisanship politics aside. I think we need to send a Kindergarten teacher to congress. Kindergarten teachers know how to make everyone play nice in the sandbox! America needs someone to make everyone in congress to play 'nice' and get America moving again.

[Amy@UWM]

Yup, what you said. Totally. I am so sick of Congress being about egos and who wins. Congress -- Do. Your. Job!!!! BTW. My blog is pitifully neglected too.

[Jill]

Can I add something? I'd also like to see the administration do something about the way we have been exporting our economic viability. I'm all about globalization and recognize the need for growing relationships between countries, but we need to take a powder with respect to our approach. Our business environment has been a free-for-all in single-minded pursuit of a quarterly profit. Honestly, the financial services sector ultimately boils down to just another symptom of this mindset. We've been bleeding not just jobs, but technological know-how for many, many years. It has created a supremely unbalanced US workforce and put our economy at the mercy of countries who cannot be expected to operate with our best interest in mind.

[Cynematic]

Some action on the Basel Committee on Banking Supervision, as of July 16, 2010: http://www.nytimes.com/2010/07/18/opinion/18sun2.html