Three Proposals

Three Proposals

1. When I took American Studies my sophomore year in Amherst, we used a series of books, published by Amherst College, that were edited by George Rogers Taylor (who taught my seminar). One of them was called: Jackson versus Biddle: the Struggle Over the Second Bank of the United States. I think (wrongly, by my current perspective) I supported President Jackson, who caused the bank to be closed down in 1836. Be that as it may, I think the time has come for the Second Bank to be reopened, perhaps under a less inflammatory name: say, The People’s Financial Organization.

Given that neither deserving individuals, nor deserving business organizations, can borrow money very easily (or at reasonable terms), it would be helpful if The People’s Financial Organization was chartered. Its charter would require that it go out of business in 10 years. Perhaps it should be capitalized at $1 trillion.

What it would do is simply make loans to deserving borrowers and perhaps make loans to persons who are unable to pay their housing mortgages, but only to those deemed to have acted honorably, if not prudently. It should charge a lower than market rate of interest, but this should still enable it to make a profit. When it is sold, the earnings would be used to reduce the national debt. Ideology apart, it seems to me a winner.

2. Here we are in an awful financial mess, while a relatively small handful of wheelers and dealers have walked off with billions of dollars in salaries and golden parachutes, the firms they have left in shambles. Clearly it’s unfair. Also, I don’t believe you can tax them ex post facto.
But you could offer all those who earned more than $5 million in any year since 1998 (or maybe as low as $1 million), and who worked in finance, viewed broadly, the following option: for those who earned over $20 million, they should volunteer to pay back 75% of their earnings. For those who earned between $10-$20 million, they should volunteer to pay back 60% of their earnings. And for those who earned $5-$10 million, they should volunteer to return half.

Now, why should they do this? Because: each and every one of them will be carefully audited and the maximum penalty will be imposed on those who did not volunteer, including prison, if that is legally possible. (And not to some tennis court prison but more a prison like Sing Sing.) I doubt there are many rich persons who have not stretched the tax laws beyond the permissible. If nothing else, it would give jobs to accountants.

3. During the 1970's the government gave tax incentives for insulating. In general, for most home owners (and perhaps owners of commercial buildings), insulating would have been rational, in terms of the long run saving of money, even if it meant short run outlays. Whether the 1970's measure did much good I have no idea.

This time, I think we should make homeowners, apartment building owners, and all other commercial building owners an offer they cannot refuse. The government should simply pay 50% of the cost of the installation of insulation and loan at very low rates the remaining 50%. The social benefits: jobs will be created and the environment will be improved. Why not?