NEW DEAL

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The New Deal was a series of economic programs implemented in the United States between 1933 and 1936. They were passed by the U.S. Congress during the first term of President Franklin D. Roosevelt. The programs were responses to the Great Depression, and focused on what historians call the “3 Rs”: Relief, Recovery, and Reform. Relief for the unemployed and poor; Recovery of the economy to normal levels; and Reform of the financial system to prevent a repeat depression. Reform of the financial system included three programs that ensured 50 years of economic peace with no bank panics or financial meltdowns: FDIC insurance (made it safe to put money in banks), Glass-Steagall Act (separated risk-taking on Wall St. From the local community bank), and SEC regulation (provided cops to watch the robbers). As a Republican President in the 1950s, Dwight D. Eisenhower left the New Deal largely intact. In the 1960s, Lyndon B. Johnson’s Great Society took New Deal policies further. After 1974, laissez faire views grew in support, calling for deregulation of the economy and ending New Deal regulation of transportation, banking and communications in the late 1970s and early 1980s. Although much of the new deal has been dismantled, several New Deal programs remain active, with some still operating under the original names, including the Federal Deposit Insurance Corporation (FDIC), the Federal Crop Insurance Corporation (FCIC), the Federal Housing Administration (FHA), and the Tennessee Valley Authority (TVA). The largest programs still in existence today are the Social Security System and the Securities and Exchange Commission (SEC).

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FAIRNESS DOCTRINE

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The Fairness Doctrine was a policy of the United States Federal Communications Commission (FCC), introduced in 1949, which required the holders of broadcast licenses to both present controversial issues of public importance and to do so in a manner that was, in the Commission’s view, honest, equitable and balanced. The FCC decided to eliminate the Doctrine in 1987, and in August 2011 the FCC formally removed the language that implemented the Doctrine.

 

DODD-FRANK

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Dodd–Frank Wall Street Reform and Consumer Protection Act is a federal statute in the United States that was signed into law by President Barack Obama on July 21, 2010. The Act implements financial regulatory reform. Passed as a response to the late-2000s recession, the Act was touted as the most sweeping change to financial regulation in the United States since the Great Depression, purportedly representing a significant change in the American financial regulatory environment affecting all Federal financial regulatory agencies and almost every aspect of the nation’s financial services industry. The law was initially proposed on December 2, 2009, in the House of Representatives by Barney Frank, and in the Senate Banking Committee by Chairman Chris Dodd. Due to their involvement with the bill, the conference committee that reported on June 29, 2010, voted to name the bill after the two members of Congress.

 

PRESIDENT’S COUNCIL ON JOBS AND COMPETITIVENESS, FORMERLY 'PRESIDENT’S ECONOMIC RECOVERY ADVISORY BOARD'

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A new panel of non-governmental experts from business, labor, academia and elsewhere that President Obama created on February 6, 2009. The board will report regularly to Obama and his economic team on the current economic crisis and possible responses to it. Obama announced this new board on November 26, 2008, and also announced that it will be chaired by former Federal Reserve Chairman Paul Volcker with campaign economic adviser Austan Goolsbee as staff director and chief economist. In the winter of 2010, the board’s name was changed to the President’s Council on Jobs and Competitiveness.

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Members include:

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Jeffrey Immelt, General Electric chief executive

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James W. Owens, head of Caterpillar

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Robert Wolf, chairman and CEO of UBS Group Americas

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Mark Gallogly, founder/ managing partner at Centerbridge Partners L.P.

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Penny Pritzker, chair/ founder of Pritzker Realty Group and Classic Residence by Hyatt

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John Doerr, partner at Kleiner, Perkins, Caufield & Byers

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Monica C. Lozano, Director of Bank of America

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Charles E. Phillips, Jr., president of Infor.

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Richard L. Trumka, president of the AFL-CIO

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Austan Goolsbee, chairman of Council of Economic Advisers

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Christina Romer, former chairperson of Council of Economic Advisers

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William H. Donaldson, former SEC chairman

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Laura D’Andrea Tyson, former Chair of the Council of Economic Advisers during the Clinton Administration

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Martin Feldstein, former chief economic advisor to President Reagan

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Roger W. Ferguson, Jr., Member

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David F. Swensen, CIO at Yale University

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HERITAGE FOUNDATION

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The Heritage Foundation is a conservative American think tank based in Washington, D.C. Heritage’s stated mission is to “formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.” The foundation took a leading role in the conservative movement during the presidency of Ronald Reagan. Heritage began work on a comprehensive report aimed at reducing the size of the federal government. The end result, Mandate for Leadership, was published in January 1981. Mandate contained more than 2,000 specific suggestions to move the federal government in a conservative direction. The report was well received by Reagan and several of its authors went on to take positions in the Reagan administration. Heritage has since continued to have a significant influence in U.S. public policy making, and is considered to be one of the most influential conservative research organizations in the United States.

Cato, Heritage Foundation, American Enterprise, and others are right wing think tanks. Corporate funding for right-wing policy work has its roots in the 1970s, when leading conservative thinkers appealed to corporations to fund intellectuals who supported their economic interests. Think tank entrepreneurs like Ed Feulner of Heritage and Edward Crane of CATO moved to cultivate corporate allies. At most conservative think tanks, corporate leaders now make up the overwhelming majority of board members. The Commonweal Institute’s website has articles and reports tracing the formation of the right-wing ideological movement, how it is funded and how it operates:

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http://www.commonwealinstitute.org/archive/information-about-the-right

 

POWELL MEMO OF 1971

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Based in part on his experiences as a corporate lawyer and as a representative for the tobacco industry with the Virginia legislature, Lewis Powell wrote the Powell Memo to a friend at the U.S. Chamber of Commerce, Eugene Sidnor, in August 1971, prior to accepting Nixon’s request to become Associate Justice of Supreme Court. The memo called for corporate America to become more aggressive in molding politics and law in the U.S. and sparked the formation of one or more influential right-wing think tanks. It sounded an alarm with its title, “Attack on the American Free Enterprise System.” The previous decade had seen the increasing regulation of many industries. In the memorandum, Powell advocated “constant surveillance” of textbook and television content, as well as a purge of left-wing elements. In an extraordinary prefiguring of the social goals of business that would be felt over the next three decades, Powell set his main goal: changing how individuals and society think about the corporation, the government, the law, the culture, and the individual. Shaping public opinion on these topics became, and would remain, a major goal of business.

See:

https://en.wikipedia.org/wiki/Lewis_F._Powell_Jr.#Powell_Memorandum,_1971

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You can read the entire text of the Powell Memo at:

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https://scholarlycommons.law.wlu.edu/powellmemo

 

H1B PROGRAM

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The H-1B is a non-immigrant visa in the United States under the Immigration and Nationality Act, section 101(a)(15)(H). It allows U.S. employers to temporarily employ foreign workers in specialty occupations. Supported by Bill Gates of Microsoft and others, this program has been criticized by many as hurting American workers.

 

ALAN GREENSPAN

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American economist who served as Chairman of the Federal Reserve of the United States from 1987 to 2006. First appointed Federal Reserve chairman by President Ronald Reagan in August 1987, he was reappointed at successive four-year intervals until retiring on January 31, 2006 after the second-longest tenure in the position. Time magazine placed him third on a list of 25 people to blame for the subprime mortgage and credit crisis of the late 2000’s because he endorsed the deregulation of financial products called derivatives. One of those instruments, the credit default swap, was the prime culprit in 2008 world wide financial crisis. He gave the green light for Wall St. to become something close to a casino.

 

OLIGARCHY

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A form of power structure in which power effectively rests with a small number of people. These people could be distinguished by royalty, wealth, family ties, corporate, or military control. In the film HEIST, Robert Rubin, Alan Greenspan, and Larry Summers were implied to be in this global class or network of financial wheeler-dealers who dominated the world economy during the Clinton presidency.

 

DEREGULATION

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Removal or simplification of government rules and regulations that constrain the operation of market forces and eliminating or reducing government control of how business is done, thereby moving toward a more laissez-faire, free market. In the film HEIST, deregulation begins under President Jimmy Carter with the deregulation of the airline and trucking industries and continues through Reagan, Clinton and Bush. The effects of unbridled financial deregulation reverberate to this day.

 

OFFSHORING/OUTSOURCING

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Offshoring is the relocation by a company of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting and customer service. Outsourcing is the contracting out of a business function – commonly one previously performed in-house – to an external provider. China and India have become dominant in these areas though many parts of the world are now emerging as offshore or outsourcing destinations. The economic logic is to reduce costs and since 1973, 40 million jobs in the U. S. have been eliminated.

 

TOO BIG TO FAIL

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“Bigness” has always been a powerful theme in America. Economic Darwinists insist that corporate size, and its accompanying economies of scale, brings progress and benefits to consumers. “Too big to fail” theorizes that certain financial institutions are so large and so interconnected that their failure would be disastrous to an economy. The term has emerged prominently in public discourse since the 2007–2010 global financial crisis, but it actually goes back to the time of jurist Louis Brandeis when, in 1914, the Treasury stepped in to provide financial aid to New York City. Brandeis railed against the “curse of bigness.” He warned that banks, railroads and steel companies had grown so huge that they were lording it over the nation’s economic and political life. Brandeis worried that the corporate giants of his day would imperil democracy through concentrated economic power. His essays, collected in book form and published in 1914 under the title, “Other People’s Money — and How the Bankers Use It,” helped drum up support for the creation of the Federal Reserve System, antitrust laws and trust busting. In the 1980s, when the government rescued Continental Illinois Bank, Stewart B. McKinney, a Connecticut Congressman, declared that the government had created a new class of banks, those “too big to fail”. Then, in the mid-1990’s large commercial banks lobbied fiercely to make profits from investing in speculative securities, the very thing the Glass Steagall Act of 1933 legislated against. With its repeal in 1999, the largest banks entered into the shadowy world of derivatives, the prime culprit in the worldwide financial crisis. During the global financial crisis of 2007-2010 many major banks, the Detroit automakers, American International Group (AIG) and others were deemed “too big to fail” or too big to be allowed to fail because they are so enormous and so intertwined in the fabric of the economy that their collapse would be catastrophic. Thus the bailouts after the casino went bust.

 

TRICKLE DOWN ECONOMICS

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Mostly identified with the economic policies known as “Reaganomics” or supply-side economics, a major feature was the reduction of tax rates on capital gains, corporate income, and higher individual incomes, along with the reduction or elimination of various excise taxes. During Reagan’s presidency, the marginal tax rate on the highest-income tax bracket was cut from 70% to 28%.

 

COMMODITY FUTURES MODERNIZATION ACT

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United States federal legislation that officially ensured the deregulation of financial products known as over-the-counter derivatives. It was signed into law on December 21, 2000 by President Bill Clinton one year after the 1933 Glass-Steagall Act was repealed. These derivatives, especially the credit default swap, would be at the heart of the financial crisis of 2008 and the subsequent recession.

 

NAFTA

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The North American Free Trade Agreement or NAFTA is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994, during the Clinton administration.

https://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement

 

SUBPRIME MORTGAGE CRISIS

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In finance, subprime lending means making loans to people who may have difficulty maintaining the repayment schedule. These loans are characterized by higher interest rates and less favorable terms in order to compensate for higher credit risk. The subprime mortgage crisis arose from ‘bundling’ American subprime and American regular mortgages, which were traditionally isolated from, and sold in a separate market from prime loans. These ‘bundles’ of mixed (prime and subprime) mortgages were the basis Asset-backed securities so the ‘probable’ rate of return looked superb. An asset-backed security is a security whose value and income payments are derived from and collateralized (or “backed”) by a specified pool of underlying assets. The pool of assets is typically a group of small and illiquid assets that are unable to be sold individually. Pooling the assets into financial instruments allows them to be sold to general investors, a process called securitization, and allows the risk of investing in the underlying assets to be diversified because each security will represent a fraction of the total value of the diverse pool of underlying assets.