Ending Wall Street Welfare: Economist Says Democrats Need Long Term Strategy

Robert Kuttner, a widely published economist based at The American Prospect is providing some of the best commentary yet on the economic emergency precipitated by the excesses of the unregulated home mortgage and securities industries.

"Democrats will shortly become stewards not just of a temporary bailout but of a long term recovery strategy," writes Kuttner in a September 30th post "Learning from 1929". "They might as well begin by pointing us on the right path. That includes direct refinancing for homeowners, direct government involvement in the management of failing financial institutions that are recapitalized by government money, through something like the Reconstruction Finance Corporations of the Roosevelt era; and a transfer tax on stock and bond transactions, both to raise needed revenue and to damp down the kind of speculation that led to the meltdown. Then Congress can begin the task of regulating the financial system properly. The basic concept is that any financial enterprise capable of taking down the system requires the tight government supervision that in the recent past has been limited to commercial banks."

Kuttner suggests that the congressional Democrats are a long way from finding an authentic Democratic response that can effectively deal with the laissez faire and failed policies of Republicanism. Regulating the financial system correctly, argues Kuttner, is "the Democratic ideology. But lately, that set of core convictions has gotten rusty. It needs to be reclaimed, and fast. Too many Democrats are still thinking small."

Not, it should be noted, is the thinking of U.S. Rep. Joe Courtney (D-2) who voted no on the amended Paulson proposal this week for all the right reasons. He was the only member of the Connecticut delegation to do so.

Kuttner doesn't stop at the Wall Street "rescue". "Government will need to rely on substantial public spending to pull the wider economy out of the hole. Most of that can be raised by surtaxes on the wealthy and by transaction taxes on speculation, but it will also require a temporary increase in public deficits. Raise enough revenue to cover about $700 billion of financial recapitalization in year one, and in years two through eight use the proceeds for public works, infrastructure, good jobs, universal health coverage, expanded pre-kindergarten and child care."

Kuttner's corrections, in other words, call for a New Deal in the 21st Century, not just to quell the high-finance meltdown on Wall Street, but to reduce the economic insecurity felt by a growing number of working and middle income households. Let's hope that when the Congress votes again, more of Kuttner's formula will be part of the rescue.

Original post from http://newbritaindemocrat.blogspot.com

Back to the Future: Divisive Bozek Gets GOP Nod For State Senate

Tom Bozek, the former state senator and self-described "conservative Democrat", wants a soapbox to spew his racially divisive views and bizarre ideas on shrinking New Britain via the elimination of low-income households.

The New Britain Republican Party has obliged Bozek, anointing him as the Republican nominee for state Senate against Democrat Donald DeFronzo, who ousted Bozek from the state Senate in 2002 behind a broad-based coalition of Democrats and Unaffiliated voters. In that 2002 contest Bozek bitterly blamed more than 1,200 newly registered Hispanic voters for his loss.

Republican Town Chair Paul Carver sheepishly told the New Britain Herald on September 27th "nobody came forward but Tom. He's got a conservative record, and the committee did not want the seat to go unchallenged."

Bozek's nomination points to the sorry state of the local GOP. Of 3,600 Republicans in New Britain and a few thousand more in Berlin, local Republicans couldn't field any fresh, conservative blood to oppose DeFronzo.

Bozek, who still occupies a seat on the Democratic Town Committee in District 1, revived his tirades against "the professional poor" and "minorities" last year in an unsuccessful, independent bid for Councillor at Large. According to the Herald, Bozek is attacking public housing, Section 8 rental stipends and Senator DeFronzo again.

The 2008 Bozek isn't hiding his racially charged rhetoric and campaign against the poor:

"We have 11,000 kids, when we should have 7,000."

"These people destroy these places (public housing). They are 80 percent minorities...They can't make friends with people in their own neighborhoods."

While Bozek has been espousing an anti-public housing and anti-family housing stance for most of the last two decades, Senator DeFronzo points out that Bozek never introduced a bill on the public housing issue while in the state Senate. There is also a bit of irony in a candidate such as Bozek attacking the "professional poor" He is a big beneficiary of taxpayers as he cleverly worked the system to become "a double- or triple dipper" in receipt of public pensions -- the last being arranged by former Republican leader Lou DeLuca who employed Bozek briefly to qualify him for more income on the public's dime.

The nomination of Bozek by Republicans may ensure that the party filled a line on the November ballot. However, they are getting a candidate whose divisiveness and appeals to the lowest common denominator may shrink their numbers even more in 2008.