Feb 04 2009
Use $20 Billion Wall Street Bonuses to Fund America
Given the current economic crisis, news of $20 Billion in bonuses to Wall Street executives is not only exasperating and incredibly outrageous; it is a clear sign of a deeper systemic problem in our economy and society. The core problem that needs to be addressed is not the amount of bailout funds, nor the programs that receive priority funding - important, yes, but not the core. No economic stimulus package will work until two things are provided for, CONFIDENCE and TRUST.
Now is the time to redirect ill gotten gains and corrupted economic and social practices into the public good. YES WE CAN!
Spending much energy on the fact that previous bailout funding was administered faster than the most proficient magician’s hands, and decrying the obvious fact that the barn doors were left wide open for all the animals to run wildly out the front door, simply won’t help. To borrow from therapeutic psychology, we need some abrupt behavior modification coupled with a deeper understanding and a completely new paradigm for moving forward. Combined, public demonstration of immediate re-direction of misused funds together with enactment of tax initiatives and monetary policies based on a new workable model for economic stimulus that is both sustainable and renewable, would generate the confidence and trust massive turnaround we so desperately need.
Let’s start by mandating that ALL the net after tax proceeds of the $20 Billion in Wall Street bonuses go into a Fund America program. This means that the entire net cash amount - every penny — be deposited into 3 to 5 year CDs at banks (their own — wonderful poetic justice - isn’t it?). The CDs are required to be pledged as loans to pre-approved Fund America programs that create jobs under a “PayBack” scenario. This will be the behavior modification start to a renewal of CONFIDENCE and TRUST.
Examples of such programs would be loans to entities such as FINCA, the American based microfinance organization; Habitat for Humanity, the low income housing builder; Personal Ascension Loans programs, that test, train, and place single moms into higher paying jobs such as Registered Nurses. The common thread in each of these programs is that the individual beneficiary undertakes the responsibility to PayBack the funds that helped them advance. The micro-finance beneficiaries PayBack their micro loans (as they have over the last 30 years), new low income housing owners would borrow first mortgages to PayBack the actual construction costs of their new homes, and the PAL program graduates agree to a 20% wage garnishment to PayBack the costs of their personal ascension. (Note: Fund America Tax Initiative would exempt Garnished wages used for PayBack from income taxes - to avoid phantom income taxation).
To further deploy the ignobly originated cash windfalls, we should further mandate that when the collateral pledges are released by the loans they guaranteed being paid off through PayBack, the executives who received these bonuses have to re-deposit and re-pledge new 3 - 5 year CDs for another complete round of Fund America programs. This will prove that this new Monetary Policy and Economic stimulus is both sustainable and renewable. After 6 - 10 years of mandated public use, dear Wall Street executives, you are welcome to your bonuses and all the interest you have earned on your CDs.
Acceleration of the restoration of CONFIDENCE and TRUST will come from the government’s enactment of the Monetary Policy and Tax Initiative that supports Fund America programs. And we can start by redirecting that $20 Billion in Wall Street Bonuses to fund Main Street instead. You can find a detailed presentation of Fund America at The Prosperity Mandate organization website.
7 responses so far
What a brilliant Economic Recovery plan!! Finally, we have some intelligent thinking!! Let’s act!! Count me in!!
One of the most hopeful ideas yet in a morass of stale same-old-same-old thinking. A breath of fresh air that could open doors to more creative ideas, and could even work.
Yes, this alternative economic recovery policy is what we need!
My questions and comments are:
1.Will the Benefactors, Leaders, or the FA loan holders drive the specific programs?
2.In regards to the Affordable Housing scenario: “equal to approximately 40% of the completed home’s Fair Market Value.” Does the 40% of market value mortgage or in other words the 60% equity in the home rely on builder’s willingness to lower their profit margin? Will there be a contingency of resale by the original FA loan holder? If so, who will hold this contingency? Is building smaller homes with lower market values possible?
I have had experience with The Community Reinvestment Act (CRA): http://www.ffiec.gov/cra/, and by far the Prosperity Mandate is a superior policy. The CRA includes government funding, costly regulations, and equity contingencies, which is the most complicated process I have ever witnessed. In addition, the contractors involved made a full profit along with free start-up funding.
Even with the above concerns, Neal’s proposal and the way he is approaching its acceptance is right on.
Let me know how I can help!
this is excellent. if there was form letter of endorsement, and a link to a page that could provide local political congressional representative contact info, there is a real possibility that various grassroots citizens movement would get on board.
Matt - We are working on a Petition site and a Facebook Cause page, we will notify you when they are up. There should be a press release through PRWeb tomorrow.
Ginny - Thank you for your comments and questions.
1 & 2. The building sector will be supervised and managed by a sub-committee of the Board of Advisers - most likely headed by the esteemed philanthropist Eli Broad who has probably built more homes than anyone else in history. The actual building would be done by groups like Habitat for Humanity or like kind, who are not in it for the profit.
Regarding CRA - IT will be critical to the success of TPM that NONE of the roll out is managed by the government - it is simply not cost or productivity effective. There will be some NGO’s or existing charitable organizations, or for profit construction companies (on the infrastructure) that complete in an open bidding full disclosure process.
Hope that addresses your questions, if you want further clarification , please ask.
The Leadership will be in the ability to identify the key issue and then pursue its solution with a crystal intensity and focus. That is how real change occurs.
Check out http://theprosperitymandate.org