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A Presidential Declaration of Independence from Wall Street—Part 2

What might a truly new economic vision for America look like? This is my answer framed as the presidential address we must prepare the way for a future president to deliver.
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This is part thirty-five of a series of blogs based on excerpts adapted from the 2nd edition of Agenda for a New Economy: From Phantom Wealth to Real Wealth. I wrote Agenda to spur a national conversation on economic policy issues and options that are otherwise largely ignored. This blog series is intended to contribute to that conversation. —DK


This is Part 2. Click here to read Part 1.

independence

Photo by Bruce Denis

Recognizing that the world can no longer afford war, the foreign policy of this administration will be crafted to build cooperation among people and nations in order to eliminate terrorism and its underlying causes, resolve conflicts through peaceful diplomacy, roll back military spending and demilitarize the economies of all nations, restore environmental health, and increase economic stability.

We will work to replace a global system of economic competition with a global system of economic cooperation based on the sharing of beneficial technology and the right of the people of each nation to own and control their own economic resources to meet their needs for food, energy, shelter, education, health care, and other basics. We will work to protect the rights and health of working people and the environment everywhere.

To that end, I will do all in my power to correct the legal travesty perpetrated against democracy by the Supreme Court decision in Citizens United. I will put my administration behind a Constitutional amendment to make clear that Constitutional protections apply only to real people, not to corporations. And I will appoint only judges who understand the difference between people and corporations.

Any corporation that is too big to fail is too big to exist.

The only reason for a government to grant a corporate charter is to serve a well-defined public purpose under strict rules of public accountability. Therefore, I am appointing a commission to recommend legislation to require that each corporation’s public purpose is specified in its charter and is subject to periodic public review.

Through a public legal process, we will work with state governments to withdraw the charter from, and force the dissolution of, any corporation that consistently fails to obey the law and fulfill a legitimate public purpose.

There will be no no-strings government bailouts of failed banks or other corporations during my administration. Any corporation that is too big to fail is too big to exist. We will break up excessive concentrations of economic power and restore market discipline through vigorous antitrust enforcement and create economic incentives for oversized corporations to break themselves up into their component units.

Because absentee ownership invites irresponsibility, we will advance policies that favor responsible ownership by workers, customers, or small investors who live in the community in which a business is located.

With specific regard to Wall Street, there is no place in a life-serving twenty-first-century economy for financial speculation, predatory lending, or institutions that exist primarily to engage in these illegitimate practices.

We will act to render Wall Street’s casino-like operations unprofitable. We will impose a speculation tax, require responsible capital ratios, tax capital gains at the same rate as ordinary income, and impose a significant penalty surcharge on short-term capital gains from speculative trading. We will make it illegal for people and corporations to sell or insure assets that they do not own or in which they do not have a direct material interest. We will prohibit financial institutions from trading for their own accounts in securities they sell to the public.

To meet the financial needs of the new twenty-first-century Main Street economy, we will reverse the process of mergers and acquisitions that created the current concentration of banking power in Wall Street institutions delinked from national and community interests and accountability. We will restore the previous system of federally regulated locally owned and managed community banks that fulfill the classic textbook banking function of financial intermediation between local people looking to secure a modest interest return on their savings and local people who need a loan to buy a home or finance a business. We will favor banks organized as nonprofit cooperatives, or owned by a nonprofit or a state or local government.

We will recommit ourselves to the founding ideals of this great nation, focus on our possibilities, and liberate ourselves from failed economic ideologies and institutions.

I have instructed the Secretary of the Treasury to take immediate action to assume control of the Federal Reserve and restructure it to function as an independent, but publicly transparent, federal agency accountable to the president and the Congress. The new federalized Federal Reserve will have a mandate to stabilize the money supply, contain housing and stock market bubbles, discourage speculation, and assure the availability of credit on fair and affordable terms to eligible Main Street borrowers.

I am asking Congress to create a Federal Recovery and Reconstruction Bank. Henceforth, all new money created by the Federal Reserve will be directed to this newly created bank in the form of interest free nonrecourse bonds to finance green infrastructure projects as designated by Congress.

We will recommit ourselves to the founding ideals of this great nation, focus on our possibilities, and liberate ourselves from failed economic ideologies and institutions. Together we can create a stronger, better nation and world to secure a fulfilling life for every person and honor the premise of our Declaration of Independence that every individual is endowed with an unalienable right to life, liberty, and the pursuit of happiness.

(I hereby extend to President Obama or any future American president permission to deliver all or any portion of this address as his own without need for attribution.)

[Next:: The Path to Real Prosperity]


David Korten author picDavid Korten is the author of Agenda for a New EconomyTheGreat Turning: From Empire to Earth Community, and the international best seller When Corporations Rule the World. He is board chair of YES! Magazine and co-chair of the New Economy Working Group. This Agenda for a New Economy blog series is co-sponsored by CSRwire.com and yesmagazine.org based on excerpts from Agenda for a New Economy, 2nd edition.

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