From Here to ‘Plutonomy’: Why We Need An Economic Bill of Rights

The Obama administration, unable to take bold steps for reform, instead relies ever more heavily on Wall Streeters like Treasury Secretary Timothy Geithner, Lawrence Summers and Steven Ratner to create a sense of financial stability. The New York Times spelled out Geithner’s record with unusual frankness:

An examination of Mr. Geithner’s five years as president of the New York Fed, an era of unbridled and ultimately disastrous risk-taking by the financial industry, shows that he forged unusually close relationships with executives of Wall Street’s giant financial institutions.

His actions, as a regulator and later a bailout king, often aligned with the industry’s interests and desires, according to interviews…

Those at the top of the economic pyramid seem to feel more confident than ever about retaining every important feature of the old order. After all, the Dow has hit 10,000 again, and Wall Streeters stand to collect record bonuses even higher than 2007.

The bankers, led of course by Goldman Sachs, intend to permit only the most token reforms on executive compensation and the deregulated policies that produced the great meltdown.

Indeed, why change anything? After all, Goldman Sachs’ pool of cash for bonuses is on track to reach nearly $23 billion by the end of the year. ​“In 2007, Wall Street’s previous record year, Goldman CEO Lloyd Blankfein took home $68 million. In 2008, 212 Goldman Sachs power suits stuffed their pockets with over $3 million each,” reports Sam Pizzigatti, in his invaluable newsletter Too Much.

“How is it possible that the year after billions of taxpayer dollars helped companies like Goldman Sachs return to financial health, this company shows absolutely no restraint? Goldman Sachs is poised to become the poster child of the company that drives income disparity in the United States” said Laura Berry, executive director of Interfaith Council on Corporate Responsibility, while introducing a new shareholder challenge against excessive executive pay at Goldman Sachs.

Nonetheless., Barney Frank — whom many of us had counted on to champion the little guy as chair of the House Banking Committee — is backing off on many key reforms in banking, disappointing groups like Americans for Financial Reform.

Frank’s chief concern these days: not wishing to discourage ​“financial innovations,” i.e. the kind of exotic, wealth-destroying instruments that drain the real productive economy and keep us vulnerable to more meltdowns.

Meanwhile, the nation’s ​“pay czar” Kenneth Feinberg supposedly cracked down on Kenneth Lewis of Bank of America by forcing him to cough up his 2008 salary of $1.5 million, a cruel punishment so harsh that Lewis will be fored to retire with a package of a mere $69.5 million.

Federal health ​“reform” legislation, without a strong public option that has the clout of Medicare to negotiate prices, would be unthinkable if America had not evolved into what an internal Citbank memo called a ​“plutonomy” where the super-rich monopolize the benefits of our economy and thoroughly dominate what the elected government is permitted to discuss in the name of reform. 

Nor would such pathetic gestures at health and financial reform be tolerated if Americans had a deeper sense of the economic rights they should hold as American citizens. 

Among all the surprisingly subtle touches in Michael Moore’s new documentary, Capitalism: A Love Story, none impressed me more than the film’s segment on Franklin Roosevelt’s ​“Economic Bill of Rights.” (University of Chicago law professor Cass Sunstein devoted an entire book to FDR’s concept, but Moore’s film provides a much more inspirational account.)

FDR, already in declining health, delivered a ​“State of the Union” speech via radio in January 1944 that is one of America’s most important public addresses. He intoned that political democracy was imperiled by a lack of economic democracy and an absence of economic security:

This Republic had its beginning, and grew to its present strength, under the protection of certain inalienable political rights — among them the right of free speech, free press, free worship, trial by jury, freedom from unreasonable searches and seizures. They were our rights to life and liberty…

As our nation has grown in size and stature, however — as our industrial economy expanded — these political rights proved inadequate to assure us equality in the pursuit of happiness.

We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. ​“Necessitous men are not free men.” People who are hungry and out of a job are the stuff of which dictatorships are made.

In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all — regardless of station, race, or creed.

He went on to enumerate the rights for which he envisioned a consensus emerging in America:

The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;

The right to earn enough to provide adequate food and clothing and recreation;

The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;

The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;

The right of every family to a decent home;

The right to adequate medical care and the opportunity to achieve and enjoy good health;

The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;

The right to a good education.

FDR held out a very different vision from our current ​“plutonomy,” in which nearly all the economic gains, power and security are held by the few. He finished:

All of these rights spell security…

America’s own rightful place in the world depends in large part upon how fully these and similar rights have been carried into practice for our citizens.

Unfortunately, FDR’s Economic Bill of Rights never was ​“carried into practice,” and is far from accepted — most notably by many top Democrats.

Given where we are and where we’re headed, FDR’s 1944 speech ought to be urgently required reading for President Obama — after he banishes Geithner, Summers, Ratner and the other free-marketeers to the unemployment line.