Antidote to a Dysfunctional Banking System

Public Banking: antidote to a dysfunctional banking system

Region's Business

January 17, 2013

As a result of the Wall Street bailout and the Dodd Frank “reforms,” the concentration of assets and deposits in the “too-big-to-fail banks” is now greater than it was before they failed and were rescued.

The St. Louis Federal Reserve reported that at the end of 2011, five Wall Street firms controlled 48 percent of total U.S. banking system assets: $8.5 trillion, equal to 56 percent of the U.S. economy. The other 7,307 banks held the remaining 44 percent.

A more recent published report puts the assets of only nine of the largest banks at $11.5 trillion, or seventy-five percent of all bank assets in the U.S. Much of that was  contributed in the never-ending bail-out by American taxpayers and the Federal Reserve.

At the same time, affordable credit that is the life blood of any modern economy remains largely unavailable or prohibitively expensive for the small (and not so small) businesses that can power economic development and jobs creation.

.

The Wall Street–Federal Reserve banking system fails to provide the effective allocation of capital into the productive economy. Investment is directed away from the production of new goods and services which create jobs, and into "financial products" which produce few jobs.

And it is going to get worse.

A recent article in the American Banker described the remaining smaller and community banks as under siege, forced to comply at a cost they can’t survive with the new capital requirements and regulations of Dodd Frank.

Which is of course what Wall Street wanted and got, with its army of lobbyists and an ever helpful Congress.

It is estimated the nation will lose more than 2,000 of its remaining community banks within the next two years. The concentration in Wall Street will grow ever greater.

Local businesses banking with Wall Street firms will find themselves talking to little more than “paper pushers,” with decisions being made somewhere up the org chart in regional centers, by people who know little of the businesses and have no stake in the local communities and economies of which they are a vital part.

Pam Martens writes on her blog, Wall Street on Parade, “That level of concentration should be a wake-up call to a country that was brought to the brink of financial collapse because of a systemically corrupt culture on Wall Street.”

As Nobel Laureate Joseph Stiglitz and others have warned, this corruption and unprecedented lawlessness – mortgage fraud from bottom to top, compromised rating agencies, rigged Libor rates and municipal bond markets, laundered billions from Mexican and Columbian drug lords and, according to a U.S. Senate investigation, clients with terrorist ties – is having a corrosive effect on our economy: crowding out honest investment and further distorting markets.

David M. Sachs at the Psychoanalytic Center of Philadelphia explained how these abusive practices and unchecked individual criminal behavior are destroying trust and effect markets. “Normal expectations of what is safe and dependable [are being] shattered.”

In a recent op-ed in the Washington Post, GOP stalwart and the author of two books on the Reagan presidency, Craig Shirley wrote: “Wall Street is too fearsome and corrupt for anyone’s good. We should find a way to create 50 Wall Streets, so that money can stay in the states and corruption can be kept to a minimum and law enforcement to a maximum.”

What Shirely, Martens and a growing army of problem solving Americans are talking about is public banking.

Public “partnership” banks use public funds to capitalize a bank which assists community banks to get affordable credit into the economy, for economic development and jobs creation – and grow their profits and market share.

The profits of the public bank come back to the state, city or county that charters the bank as non-tax revenue for the general fund.

And a public bank can underwrite municipal bonds, at substantially reduced interest and debt service borne by taxpayers.

As of today only one state, North Dakota has its own bank. Over the past decade the Bank of North Dakota (BND) has generated an average of $30 million a year in non tax revenue for the state and its people, and has a current commercial loan portfolio of more than $2.9 billion invested in the state’s economy through its community banks  — in a state with a population no larger than some suburban Philadelphia counties.

The bank is run by civil servants on civil servants’ salaries – no bonuses or commissions as incentive to speculate or take undue risk. The bank is overseen by a board whose members are all bankers. It is publicly audited.

The BND has been instrumental in supporting perhaps the strongest banking industry in the nation: not one failure as the economy collapsed, and more than double the national average of bank offices per capita.

The Center for State Innovation concludes: “The extra leveraging ability that the state bank provides through participation loans, the increase in municipal deposits from letters of credit, and the other supports that a state bank can provide as a ‘banker’s bank’ are all critical in helping to strengthen small and/or young banks.”

In a recent conference call with other bank CEOs around the nation, the CEO of one small North Dakota bank had this to say: “When the crash hit, the BND never blinked and kept the credit flowing.” The CEO of a large, regional North Dakota bank said this: “With the support of the BND, we can go toe-to-toe with the big boys.”

Community banks in North Dakota are taking back market share from Wall Street, while in most of the nation they continue to lose market share.

Twenty states and an increasing number of municipalities are considering creation of public banks. A national network of public banks, providing locally generated credit for locally directed economic development and jobs creation is the long overdue alternative to a dangerously concentrated and dysfunctional banking system and the distorted markets it has produced.

Public banks and unions

Public Banks: helping workers by helping people.


By Mike Krauss

In the decades after World War II, the American people built up the greatest and most broadly shared prosperity the world had ever seen. But for about the past forty years, the vast wealth of America has been steadily concentrated among a relative handful of our citizens.

This period of declining prosperity for the 99 percent has corresponded exactly with the decline of American unions. It does not take a rocket scientist to understand that strong unions are vital to a broadly prosperous and democratic America.

As the son of a steelworker, I know what a strike is like, in the winter, when your family is forced to choose between heating oil and electricity. My dad retired with the dignity and security of a pension and good health care. I know first-hand what unions did for my family and millions like it.

Today, many millions of Americans are daily making the choices our family made only during a strike: forced to choose between the mortgage or rent, and food or medicine, between health care or education, keeping the car in good repair or clothing.

How can the political muscle of unions be restored?

To answer that question, it is important to understand that political power flows from wealth; and as wealth is concentrated, so too is political power.

Today in the United States and Europe, the concentration of wealth and political power has become so grotesque as to threaten the very survival of democratic government.

But Americans are awakening to the threat, and there is a growing movement to challenge and break the greatest and most lawless concentration of wealth and power: the “too-big-to-fail” and “too-big-to-jail” private banking cartel of Wall Street and the Federal Reserve.

The tool needed to get that job done is the creation of a network of “public” banks, modeled on the hugely successful Bank of North Dakota (BND).

Public banks at the state, county or municipal level are capitalized with public funds, which are then leveraged in partnership with local, community banks and municipal governments to provide the sustained and affordable credit that is essential for economic development and jobs creation in the modern economy.

The profits of such a bank are returned to its one and only shareholder – the people – as non tax revenue. These banks are managed by civil servants who receive no outsized salaries, bonuses or commisions – no incentive to take the reckless risks that crashed Wall Street.

And as the Public banking Institute (PBI) chairperson, Ellen Brown has explained, public banks can take a huge bite out of the interest – the debt service borne by taxpayers – on the financing of capital and infrastructure projects; such as schools, highways and bridges and water treatment facilities.

Finally, public banks will correct a dangerously dysfunctional private banking system.

It is reported that nine banks now hold 75 percent of all assets in the U.S. banking system: $11.5 trillion. The balance of assets is held by the remaining 7,307 banks; a number forecast to be reduced in the next two years by 2,000, as the rules of Dodd Frank, written by the big banks, take effect.

Assets will be even more dangerously concentrated in a banking system that already fails in its basic function: the efficient distribution of capital and credit into the productive economy.

Through the 1980s the finance industry accounted for no more than 16 percent of U.S. domestic profits. By 2008 that figure had more than doubled to 40 percent. Financial “products” which create few jobs are crowding out the investment in providing goods and services, which does create jobs.

A network of American pubic banks will dramatically alter the banking landscape. As public banks are established, all the tax revenues and assets of the chartering government can be deposited in its bank, instead of on Wall Street.

And as credit creation is decentralized and economic development is locally funded and locally directed, as prosperity is once again broadly shared, so too will be political power.

Main Street or Wall Street. That’s the choice.

This is a task vital to our democracy, and a historic opportunity for unions to bring to the battle something unions still have plenty of – money.

It is in the pension funds.

For example, examining the public employee pension funds described in the Consolidated Annual Financial Report (CAFR) of the Commonwealth of Pennsylvania, and reviewing other published analyses, we discover that while these pension funds need returns of above 8 percent to keep abreast of future liabilities, they are earning only about 4 percent, or less.

And at a substantial cost paid in fees to advisors and fund managers.

Not only that, but a significant portion of these pension funds, collected from the paychecks of union members, is not invested in Pennsylvania, and not even in the United States. That is indicated in a footnote to the CAFR that describes how the funds manage the risk of investments in more than 30 foreign currencies!

No doubt, a thorough examination of pension funds across the United States would uncover many other examples of how contributions from the paychecks of union members to their pension funds are being exported, along with their jobs.

The public Bank of North Dakota is consistently returning 17 percent to 25 percent on equity. This suggests that as public banks are created, a union equity position, supported by some percentage of the pension funds would be a prudent and profitable investment.

But more importantly, if unions are seen to drive a broad, economic recovery through their investment in pubic banks, unions will make a lot of new friends.

This is what AFL CIO President, Richard Trumka’s grandfather was telling him, those many years ago: “If you want to help workers, you first need to help people.”

This is the kind of new thinking for the labor movement outlined in Sarah Jaffe’s article on AlterNet, “Six Ways to Juice Up the Labor Movement.” http://www.alternet.org/6-ways-juice-labor-movement

In this collection of essays, Stephen Lerner, architect of the Justice for Janitors Campaign wrote: "We need bargaining not to just be about workers, but what's good for the community, so that we're bargaining for broader issues, especially in the public sector. So that it's not bargaining for the few, it's bargaining for the many."

Union support for creation of public banks in states, and more importantly in cities and counties all across America will help a lot of Americans back to prosperity, and the unions back to a position of political power that is vital to safeguarding the prosperity of all American workers, union or not, so that it is never again stolen away.

Mike Krauss is a director of the Public Banking Institute and the Pennsylvania Project. He is a former officer of Pennsylvania county and state government executive director of the Pennsylvania Republican Party. mike@publicbankinginstitute.org

The Banksters

Laundering the rule of law

By Mike Krauss

Bucks County Courier Times

The Wall Street bail-out was sold as one time, emergency relief to save Wall Street and rescue the American economy from collapse. Ransom paid, the economy collapsed; but the bail out continues as a never ending, multi-trillion dollar give away.

Now we know that many, if not all the largest banks were engaged in a decades long criminal enterprise, knowingly embraced by their officers, who even the capitalist cheering publication The Economist headlined as “Banksters.”

Bottom-to-top fraud in the mortgage industry. Compromised ratings agencies that gave AAA grades to junk investments. Rigged U.S. municipal bond markets, rigged international interest rates and interest rate swaps that cost borrowers, consumers, school boards and municipalities billions, maybe trillions of dollars.

Most recently revealed is a decade long, systematic laundering of billions of dollars of cash from Mexican and Columbian drug lords and clients with links to terrorist suspects.

The U.S. government has responded with nothing more than a few well publicized investigations and fines that are little more than chump change to the fabulously wealthy banksters.

No criminal prosecutions of the high level individuals responsible for actions that have devastated the lives of tens of millions of Americans and eaten up trillions of dollars of their former wealth: lost jobs, lost homes, lost savings, lost investments, lost futures and lost lives.

While the administration and Federal Reserve provide damage control and mountains of cash to the banksters in what has become a never-ending bailout, they feed propaganda to the American people.

“Let them eat headlines.”

The failure of the U.S. Attorney General to bring criminal charges against the individual banksters for their criminal conduct is a shameful betrayal of justice.

There is a lot of shame to go around.

Instead of duty to their oaths of office and subpoenas from the Senate and House committees which have oversight of the Justice Department, the American people get – silence.

Instead of a daily, coast to coast barrage of outraged editorials, demanding the firing of the U.S. Attorney General, the people get – silence.

Instead of a chorus of righteous support for the rule of law from the dean of every  law school, district attorney and prosecutor in the nation, we get – silence.

It is shameful, and it is dangerous.

The rule of law is central to the survival of any civilized nation. Without it, there is only the amoral government of the predators and the slow decline to tyranny and ruin.

The decline may not be so slow.

One result of the on-going bail out of the banksters is, of course, that their mega banks keep getting bigger and more dangerous.

Writing a few days ago in Rolling Stone, Matt Taibbi noted that nine largest banks now control a reported 75 percent of the assets in the American banking system, nearly $11.5 trillion; up from about 48 percent and $8.5 trillion only a few years ago -  9 banks out of more than 7,000.

Taibbi noted that the six largest U.S. banks now have a combined 14,420 subsidiaries, placing them effectively beyond regulation. He cited a recent study by the Kansas City Fed, which calculated that it would take 70,000 examiners to inspect these banks “with the same level of attention normally given to a community bank.”

And what is the result of the near impossibility of effective regulation? Business as usual on Wall Street. Very bad business, which Taibbi describes as a “dangerous shift in banking behaviour.”

He writes: “With an apparently endless stream of free or almost-free money available to banks - coupled with a well-founded feeling among bankers that the government will back them up if anything goes wrong - banks have made a dramatic move into riskier and more speculative investments, including everything from high-risk corporate bonds to mortgage ­backed securities [Again!] to payday loans, the sleaziest and most disreputable end of the financial system. In 2011, banks increased their investments in junk-rated companies by 74 percent.”

The bail out and failure to prosecute – to hold the banksters accountable – is not only subverting the rule of law and destroying the trust of the people in their elected representatives – the trust which is essential for the survival of democracy – it has put the U.S. banking system right back where it was before the last crash and headed for another.

Is there any way to avoid this fate?

Firing the U.S. Attorney general is the first step. Breaking up the big banks is a second.  Creating a public banking system to support local banks and local economies, its actions fully transparent and its officers fully accountable to the people, is a third. De-authorizing the Federal Reserve and taking it into the U.S. Treasury as a much scaled-down advisory body on interest rates and money supply is a forth.

This last action should include replacing Federal Reserve notes, erroneously referred to as “the U.S. dollar,” with actual U.S. dollars issued by the U.S. Treasury, without the interest paid to the bankster owners of the Fed.

Of these measures, only the creation of public banks does not require an action of the administration or Congress and can be undertaken by the people locally, and is therefore the one to pursue now.

Mike Krauss is a former officer of PA county and state government and chairman of the Pennsylvania Project. www.papublicbankproject.org Email: mike@mikekrausscomments.com

Breaking Free From Wall Street

Public banking: Breaking free of Wall Street and the boom-bust cycle


By Mike Krauss
Bucks County Courier Times

The Bucks County Commissioners have unveiled a preliminary budget for 2013, and like county, city and state elected officials across the nation, they are looking at a deficit. In this case, $2.7 million.

The cause of the deficits is largely the same everywhere: in the wake of the man-made catastrophe of the collapse and bailout of Wall Street, the economy remains in recession, unemployment high and tax revenues decreased, combined with cutbacks in state and federal funding.

State funding has been cut back because of the same declining revenues, no relief in sight. And with Washington focused on what many consider a propaganda-induced crisis — the “fiscal cliff” — there will be no relief there.

The options touted to close the gap are about the same in Bucks County as across the nation: raise taxes, reduce services (when unemployment and foreclosures increase the demand for those vital services), lay off employees and add to unemployment or borrow, adding yet more debt to already burdened taxpayers.

Those are the only tools state and local governments have, tools to share the pain. Or are they?

While Americans view the economic contraction and recession as global, it isn’t. It is highly localized to the economies of the United States and Europe, which are most closely tied to the central bank cartel of Wall Street and Federal Reserve private banking system. But in many other nations, where on the average 40 percent of the market is in public banks, economies are growing.

These are the so called BRIC nations (Brazil, Russia, India and China), as well as Australia, New Zealand, Canada, Iceland, South Africa and Japan; and the healthiest economy in Europe, Germany, where public banks have existed for decades and provided much of the credit and investment for West Germany’s recovery from World War II. The public “Post Office Bank” in Japan played the same role there.

This is not to say that these nations have not felt the impact of declining exports to the sick economies of the U.S. and Europe. They have. But no one in China, or Brazil or India is talking austerity.

Just the failed central bankers and the 1 percent in the U.S. and Europe who caused the catastrophe.

But there are cracks in the wall. Iceland told the predatory bankers to get lost, prosecuted, went after the money they stole and now its economy is recovering while the U.S. and Europe languish. Members of the English Parliament are considering real limits on the private banks.

And last week in Scotland, the finance minister, members of Parliament and civil servants heard from advocates of a public bank as they consider legislation to create a public bank on a national scale.

But public banks are unknown in the U.S., except for one state, North Dakota, where the Bank of North Dakota (BND) has played a major role in sustaining the strongest economy and banking industry in the nation: lowest unemployment, rising wages, continued budget surpluses and no bank failures.

In addition to a current loan portfolio of $2.9 billion invested throughout the state’s economy (businesses, mortgages, student loans), the BND invests in municipal infrastructure, supports disaster relief and has returned an annual average profit of $30 million a year over 10 years to the state’s general fund — revenue without taxes.

The BND is also partnering in North Dakota’s strong energy and agriculture sectors — for example, helping to finance the first new refinery in the United States in decades — multiplying those sectors’ contributions to the economy.

So what about Pennsylvania, which has energy and agriculture and a whole lot more, in a far more diversified economy than North Dakota? The impacts of a state public bank in Pennsylvania could well exceed those of North Dakota. And a public bank of Bucks County could help diversify its economy and end its decades long dependence on residential real estate taxes and state and federal handouts.

Small wonder that now 20 states and a growing number of municipalities across the country. are exploring how public banking can grow their economies, create jobs, boost tax revenues in an expanding economy, halt cuts to vital services, end layoffs and reduce taxpayer debt.

Of course, the benefits of any new public bank will not be felt immediately. The best studies to date (by the Center for State Innovation) project a three to five year period until public bank profits begin to flow, depending on how the bank is capitalized. But the creation of affordable credit to invest in the local economy can begin almost immediately.

The Commonwealth of Pennsylvania and counties like Bucks have more than sufficient assets and access to capital to form a public bank. This innovation deserves the attention of our elected officials.

Because one thing is certain. As long as the creation and cost of credit is controlled by Wall Street and the Fed, recessions will come and go and come again. The time to begin breaking free of that cycle is now, so we don’t get stuck again in a few years with the same bad choices.

Mike Krauss, formerly of Levittown, is a former officer of Bucks County and Pennsylvania government and chair of the Pennsylvania Project. www.papublicbankproject.org Email: mike@mikekrausscomments.com

The fiscal cliff sell out

The thanks of a grateful 1 percent

By Mike Krauss

Bucks County Courier Times

Many weeks ago in this column I forecasted an Obama victory. It was an obvious call.

Mr. Romney was and is a poster boy for Wall Street and the 1 percent. He represented a party – at least those who have done its talking for thirty years – that veers between indifference and hostility to gays, Hispanics, African Americans, the unemployed, uninsured, homeless and women.

Who was left to disdain?  

So Obama’s victory was assured. Now the question is, what will he do with that victory? The answer is again obvious. He will do as he did after his first election, and protect the interests of the 1 percent.

Obama came to the presidency with more good will and political capital among the American people than any new president in modern times. But even before he took office, he and House Speaker Pelosi ran to Wall Street’s rescue and rounded up the votes to pass the bail out.

Then as president, Mr. Obama stood up for Wall Street. He surrounded himself with Wall Street’s minders and errand boys, legitimized Wall Street’s greed and fraud, put Wall Street’s boys at Treasury, Justice and the Fed. He stood up for Wall Street as he sat down on unemployment and foreclosure, and instead led the nation off into the health care wilderness.

Not that health care is unimportant. But even a second rate political strategist could have told you that if Obama had gone after Wall Street, put the barons on the run and in the dock, his approval rating would have gone from 60 plus percent to about, well, about 99 percent.

The president could then have gotten any jobs and foreclosure bills he wanted, the American people and economy would have come roaring back, and he could finally have gotten the health care reform most Americans have long supported - a single payer system for all Americans.

He didn’t want to. His re-election should have been impossible. But the GOP and the 1 percent served up Romney and Obama won – big.

And it was a big victory. Not just the contest for president, but across the board in the Senate and House, the GOP got hammered, and Obama immediately stepped up to talk  - compromise.

It is as if, when the treaties were signed to end World War II, the U.S. had then asked the Germans and Japanese how much of Europe and Asia they would like back.

Do you think, if Romney and the GOP had won, they would be talking compromise? Of course not.  They would be talking “mandate” 24/7. And there would be bills tomorrow to “save” what is left of the safety net by cutting more holes in it, complete with continued historic low taxes for the already wealthy and more corporate subsidies.

And there will be such bills and soon. Mr. Obama will give cover to those Democrats in Congress who Wall Street and the 1 percent have already purchased, and an opportunity for the true believing predators in the GOP to push for cuts in the safety net that will make the coming sell out sound reasonable.

It is the same drill that got the bail out through Congress in 2008, led by Democrats Obama and Pelosi and a national media that hectored the American people night and day with the specter of a “credit freeze” and collapse of the economy.

The bail out was enacted and Americans got – an economic collapse. This time it is the even more ominous sounding “fiscal cliff” which is trotted out day and night to frighten Americans into burning down their own house. And the result will be more hardship and poverty for most Americans, and more wealth for the already wealthy.

It is time to ask, if you have not yet, whether the two major national political parties in the U.S. any longer can make a claim to represent average Americans; or whether both have been reduced to puppet parties, the strings of each pulled by Wall Street and the 1 percent, going through election “extravaganzas” as scripted as any professional wrestling match, outcome predetermined: the 1 percent win and the 99 percent lose.

There were some hopeful signs in the elections for Congress, most notably the election of Elizabeth Warren as Senator from Massachusetts. But that is one reason why Wall Street and the 1 percent are trying to stampede the nation now, and get this deal done with the lame duck Congress, before anybody is in place to head them off.

It does not take a political genius to forecast harder times still for most Americans. Likewise, it is obvious that the fight for simple justice and the prosperity of the 99 percent will not be led from Washington. It will be led from America’s municipalities, counties and states, rebuilding an American community, or it will not be led at all.

And four years from now Mr. Obama will retire with the thanks of a grateful 1 percent and we can try again to elect a president of the people, by the people and for the people.

Road to Ruin

Only jobs can stop the drift

By Mike Krauss
Bucks County Courier Times

It was a throw away, seven words in a sentence at the end of a recent editorial in this newspaper encouraging a write in vote for former Pennsylvania Gov. Ed Rendell for U.S. Senate.


The editors found insufficient reason to endorse either incumbent U.S. Senator Bob Casey or his GOP challenger Tom Smith, and suggested that Rendell could bring much needed leadership to a dysfunctional U.S. Senate, immobilized by partisanship — and here are the seven words — “even as the nation drifts toward ruin.”

And there it is: the truth, the whole truth and nothing but the truth, in black and white and right between the eyes.

We are drifting toward ruin.

It begins at the beginning, with the oath the president took to “preserve, protect and defend the Constitution of the United States against all enemies, foreign and domestic.”

Mr. Obama has foresworn that oath and is trashing our constitution, shredding the rights to due process, habeus corpus and the protection against unreasonable search and seizure.

The war on terror has become a war on liberty.

Americans may now be arrested at will — that of the president, urged on by some nameless functionary, and imprisoned indefinitely without evidence before a judge or a warrant. The president has taken upon himself the power to execute alleged “bad guys,” including American citizens, without recourse to any judge or trial.

His opponent, Mr. Romney has had this to say about this Caesar-like power grab by the nation’s chief executive — nothing.

So we drift away from our constitution, as we drift away from our democracy.

The election for president and members of Congress will hit new spending records, of itself not all that surprising. It takes a lot of money to stage a two year circus.

But there is almost no way to know where all the money comes from and no way to limit the influence of the corporate elite that now buy elections as they buy votes in Congress.

The nation drifts as the unemployed and homeless drift. God only knows how this faceless army is faring in the aftermath of “The Storm.” It was bad enough before the storm hit.

Better Markets (www.bettermarkets.com) is a non-profit and non-partisan organization that promotes transparency, efficiency and integrity in the nation’s finance industry and markets. Its director is a high power lobbyist, Dennis M Kelleher, who has been described as “Occupy’s suit wearing cousin.”

In late September they released a report that quantified the damage inflicted on the nation in the other catastrophic storm of recent memory, the collapse of Wall Street. The report puts its message in its title: “The Cost of the Wall Street-Caused Financial Collapse and Ongoing Economic Crisis Is More Than $12.8 Trillion.”

The report describes the reality of America: five years since Wall Street failed and was rescued, the nation is stuck in “the worst economy since the Great Depression, which touches every corner of our country.”

The $12.8 trillion represents the losses that can be quantified: “destruction of human capital from long-term unemployment, lost household wealth, foreclosures, government bailouts, emergency spending measures, and the other actions that were necessary to prevent a second Great Depression.”

But the report also notes the difficult to quantify, but very real losses that all the “feel good” propaganda in the world cannot mask: the “widespread human suffering that has resulted from the surge in poverty, homelessness, and hunger.”

“Surge.” Like the tide that hit Lower Manhattan and the Jersey shore, with similarly devastating consequences.

The report concludes that this suffering and deprivation will continue “for many years to come.” Or, as another report put it some months ago, the nation is in the midst of a “slow moving social catastrophe.”

Drifting toward ruin.

What will arrest the drift and get the nation moving forward again?

A psychological lift would help, something we could all cheer, like jailing some of the banskters on Wall Street or a moratorium on home foreclosures. But more is needed: jobs — good paying jobs.

Jobs are everything. Jobs for the middle aged Americans now out of work for years, unemployment exhausted, home foreclosed, future bleak, winter coming on.

Jobs for the debt shackled and unemployed recent college grad. Jobs for the 50 percent unemployed minority youth. Jobs for the laid off teachers, cops and firefighters. Jobs.

It is so achingly obvious.

Jobs eliminate the need for public assistance and create taxpayers, economic activity, local tax revenue and hope. Jobs create buyers for products and services and the need to increase production, capacity and employment that all the tax breaks and corporate profit serving deregulation in the world can never produce.

Where will those jobs come from? Washington? Wall Street? The Federal Reserve?

Doubtful.

Perhaps, in the aftermath of “The Storm” there will be funds to rebuild and some will be put to work in the areas affected. But expect the Congress to cry poor, as cover to legislate a windfall for major donors and the one percent. It’s the new American Way.

Maybe, by some miracle, the elections will produce a president and a Congress who are on fire to put America back to work, the deficit be damned. But again, don’t hold your breath.

To arrest the drift, jobs must be created on a massive scale. New models are needed. The old and failed must be discarded.

Prophet of profit

Why Romney won't win

Bucks County Courier Times

I promised myself I would not write about the GOP and Democratic conventions until both were over. But then I figured, since I am writing about U.S. politics, where all promises are made to be broken and no one seems to care, what the hell.

Mitt Romney is headed to defeat.

It should not be possible. Most Americans now realize that the election of Mr. Obama was the result of the greatest “bait and switch” marketing campaign in the history of American politics, but he will be re-elected.

Mr. Obama drove Wall Street’s get-away car, his attorney general riding shotgun. He chose to stand aside while millions lost their homes. He has proved unable/incompetent/unwilling (Pick one) to put Americans back to work. His big domestic initiative has not made health care more affordable, and so it is less available when and where it is needed. He has kept America at war.

Mr. Obama swore the great oath to “preserve, protect and defend the Constitution of the United States against all enemies, foreign and domestic,” but is quite possibly the greatest threat to that Constitution in the history of the nation.

He has assumed powers and trashed constitutional protections in the manner of a Roman Caesar or a Tudor king.

The president and his apologists are compelled to embarrass themselves and argue that Americans are better off today than they were four years ago; and if they are not, well, he had nothing to do with that.

Mr. Obama should go down in a landslide. But he won’t. How is that possible?

For the answer, you need look no further than Mr. Romney’s acceptance speech.

The Nielson Agency says about 800,000 more Americans watched the GOP Convention than did so in 2008. It also reports that the audience was overwhelmingly 55 years or older. It did not say, and did not need to say, that the audience was also overwhelmingly white.

That is the GOP base. And Gallup reports that Romney’s speech got “the lowest ratings of any Gallup has measured since 1996.”

Trouble in River City. Why?

No one trusts the man. He has changed positions on issues more frequently than most men change underwear. And while he has strengths, they cannot be spoken.

He was a reasonably effective governor. But he has disavowed almost every policy he championed then, in an effort to hide out among the tea party that would impress a chameleon.

And his other strength — that of a deal making businessman — only serves to remind Americans that in the U.S. today, it is often only the deal maker who wins. Romney could only allude to it, and he had to rewrite history to do it.

Romney said, “He (Mr. Obama) took office without the basic qualification that most Americans have and one that was essential to his task. He had almost no experience working in a business.”

The most effective presidents in modern time had no experience with business. Teddy Roosevelt, FDR, Eisenhower, Johnson and Nixon spent their entire adult lives in public service, and Reagan’s only brush with business was as a sportscaster and actor.

There is a vast difference between a life devoted to public service and a life devoted to profit, which is all that business is about. Period. And most Americans know it.

Maybe not the latter day Republicans who now dominate that party, but most Americans know that a life organized around profit will be fundamentally different that a life organized around service, and that while each has its place in America, neither can be successfully directed like the other.

Mr. Obama has failed not because he has no business experience, but because he had insufficient experience of American government, perhaps even insufficient experience of America, and got rolled by Wall Street.

And Mr. Romney appears to fit right in with that same crowd of parasites in pinstripes. I don’t see Americans jumping from the frying pan into the fire.

Mike Krauss is chairman of the Pennsylvania Project and was executive director of the Pennsylvania Republican State Committee in the Thornburgh administration. Email: mike@mikekrausscomments.com