This weeks signing of the Dodd-Frank Bill has brought little change in the way of financial change. In a recent article former Gov. Spitzer writes about how disappointing the lack of real reform is and offers forth some suggestions that the administration could do to actually make improvements:
Behind the Dodd-Frank celebrations and Rose Garden linguistic bouquets, nothing really changed about the financial sector: The same regulators are in charge, the same CEOs are still running bigger, more concentrated financial institutions, and, oh, by the way, the pay czar announced last week that TARP beneficiary institutions overpaid their executives by $ 1.7 billion—yet nothing will or can be done about it. The TARP IG reported last week that the Treasury-department mortgage reformation program has been a disaster: Fewer than 400,000 mortgages have been altered. And while Goldman was paying a fine of two weeks’ profits to give the SEC cover, there was no structural reform in the securities industry. A decade has gone by with no net private-sector job growth, initial unemployment claims last week jumped to 464,000, the average duration of unemployment is the longest in modern history, and the deficit for fiscal year 2010 is projected to exceed 2009’s 1.41 trillion dollars.
The White House needs to do something to transform this dreadful political moment. How about a simple, three-part proposal?
- Adopt a carbon tax (supported by virtually all in the environmental community and some conservatives as well; see Pete Peterson in the Wall Street Journal) .
- Offset the revenues from the carbon tax with a reduction or even elimination of the payroll tax for all new hires.
- Increase the retirement age for Social Security one year for every two calendar years over the next six years (a net increase in three years on the retirement front), and start to put in place some obligation for the wealthiest to pay more for Medicare. These are simple but necessary bargains.