A Presidential Declaration of Independence from Wall Street

What might a truly new economic vision for America look like? David Korten imagines a presidential address he’d like to hear.

David Korten   NationofChange.org Tuesday 30 August 2011

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

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.

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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.

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.

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

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By Published On: September 7th, 2011Comments Off on A Presidential Declaration of Independence from Wall Street, by David Korten

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