Happy 5th Birthday, Dodd-Frank!

I just read an excellent "explainer" at Vox that lays out how the Dodd-Frank legislation is addressing the issues of the 2008 financial melt down.  Here's a sample:

The Dodd-Frank bill has three pillars... :

• Fixing the broken consumer finance system by ending a system in which consumer protection was a secondary mission for many agencies and making it the primary mission of one agency, the Consumer Financial Protection Bureau.

• Fixing derivatives by having them "be traded on exchanges ... and cleared through central counterparties." Derivatives would be forced into regulated marketplaces, where the risk they posed would be limited.

• Fixing "too big to fail" by "building high quality capital" to make large banks less likely to fail and "cross-border resolutions [of] systemically important financial institutions" so a large financial firm that did fail (like, say, Lehman Brothers) could be shut down in a noncatastrophic way, just as the FDIC does regularly with small banks.

Read the entire explainer at: http://www.vox.com/2015/7/21/9004155/dodd-frank-explainer

And on his blog at Mother Jones, Kevin Drum, notes that the Fed has ... 

announced new capital requirements for large, systemically important banks that could devastate the financial system if they failed. These new requirements can be met only with common equity, the safest form of capital, and are in addition to the 7 percent common equity level already required of all banks:

Read the whole post here: http://www.motherjones.com/kevin-drum/2015/07/big-banks-get-their-new-marching-orders-fed


Update: Better Markets has a PowerPoint presentation on the 5th anniversary of Dodd-Frank available for download here: http://www.bettermarkets.com/cocpowerpoint

An Idea Whose Time Has Come?

It appears that the "no tax" Republicans in charge of state governments are "no tax" only to the benefit of the richest in their states.  Here's a link to a report on the situation and recommendations for how to fix it.

http://keystoneresearch.org/taxfairness

Taxing Top Incomes at the Same Rate as the Middle Class Could Fund Critical State Priorities, Including Education, Infrastructure, and Public Pensions

John Oliver Explains How the Wealth Game is Rigged

Here's a great post from Vox.com with a video from John Oliver's "Last Week Tonight".

http://www.vox.com/2014/7/14/5897797/john-oliver-explains-wealth-gap

Is false optimism shaping your view of what's fair when it comes to taxation?

Because They Believe Our Country is More Important than Their Money

Did you know there's a group called Patriotic Millionaires?

They recently sponsored a lively discussion between economist and author Thomas Piketty and Senator Elizabeth Warren.  It's definitely worth watching.

http://www.youtube.com/watch?v=uEYAS5U5Wuk

I agree with Senator Warren: Inequality is not inevitable.  Right now the game is rigged for and by the super-rich.  But, we have our voices and our votes as leverage for change.

Raise the Minimum Wage - Advice to US from the IMF

There are steps Congress can take to counter the effects of an economic game that is rigged to favor the richest among us.

The International Monetary Fund is calling on our lawmakers to raise the minimum wage. Last week, the IMF issued their annual review of the U.S. economy, and they said that there is a lot more we can do to fight poverty. Our federal minimum wage puts us at number 11 on the list of developed nations, and our social safety net ranks even lower in comparison to other countries. We're the richest nation on Earth, yet we allow millions of people to remain in poverty. In addition to raising wages, the IMF says that tax credits that benefit low-income families should be permanently extended, and expanded to cover more Americans. The Earned Income Tax Credit and the Child Tax Credit are set to expire in 2017, despite the fact that they have the highest impact on low-income families. These recommendations could help lift millions of Americans out of poverty, but they both require that our broken Congress actually gets something done. Republicans refuse to listen to economists in our country, but maybe they'll take heed to the IMF's important advice.  (Source: transcript from "On the News with Thom Hartmann)

When we elect Representatives and Senators in November, let's throw our support behind candidates who will follow these recommendations - Democrats.

Why Inequality Matters

The CEO of one of the worlds richest banks, Lloyd Blankfein, was recently interviewed by CBS news and had this to say: “...too much of the GDP of the country has gone to too few of the people...If you grow the pie but too few people enjoy the benefits of it, the fruit, then you’ll have an unstable society.”

Read an analysis of the issue and watch a video of the full interview at the link. The income inequality comments are at 4:30 minutes into the interview.
http://thinkprogress.org/economy/2014/06/13/3448679/goldman-sachs-income-inequality/

It's important to vote for candidates who understand why inequality matters and will work to do something about it.

Wealth Grows Faster for the Few than Income Does for the Many

If you haven't heard of Thomas Piketty and his new book "Capital in the 21st Century," you can find an excellent introduction to his work here: http://www.truth-out.org/news/item/23817-thomas-piketty-the-market-and-private-property-should-be-the-slaves-of-democracy

The site features both a video and a transcript of Piketty's remarks.

Here's a sample of Piketty's views on taxation:

I think it is important to realize that wealth is going to be increasingly important as compared to income in the 21st century. Therefore the taxation of wealth is going to be more and more important as compared with the taxation of income. We need both, of course, but we need to rethink the taxation of wealth. In most developed countries the way we tax wealth right now is through property taxes. So for instance in the US or in most European countries you tax real estate property just in proportion to their value. So it's not progressive and also because these property taxes were set up in the 19th century, they do not really take into account financial assets or financial liabilities. So I think it would be important to adapt them to the structure of wealth in the 21st century. And it will be adequate to transform these property taxes into progessive taxation of net wealth. So for instance, if you have a house worth $500,000 and you have a mortgage of $490,000 your net wealth is only $10,000. You are not rich in any way. So in the current property tax system you shouldn't pay as much property tax as someone without a mortgage. And sometimes you even have people whose property value is below their mortgage and they keep paying the same property tax. So I think this is just not the right way to tax wealth. And both to allow people to access wealth, to accumulate wealth and also to limit the concentration of wealth at the top end of the distribution, we need to have a progressive tax on net wealth.