The Need for a New “New Deal” for the 3 “R”s “Relief, Recovery and Reform” and the Re-Instate​ment of the Glass-Seag​all Act, among others – 09/02/2011

For Your Entertainment (FYE)

http://en.wikipedia.org/wiki/New_Deal
http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Act
http://en.wikipedia.org/wiki/Middle_way

“The programs were responses to the Great Depression, and focused on what historians call the “3 Rs”: Relief, Recovery, and Reform. That is, Relief for the unemployed and poor; Recovery of the economy to normal levels; and Reform of the financial system to prevent a repeat depression. ”

“The New Deal produced a political realignment, making the Democratic Party the majority (as well as the party which held the White House for seven out of nine Presidential terms from 1933 to 1969), with its base in liberal ideas, big city machines, and newly empowered labor unions, ethnic minorities, and the white South. The Republicans were split, either opposing the entire New Deal as an enemy of business and growth, or accepting some of it and promising to make it more efficient. The realignment crystallized into the New Deal Coalition that dominated most American elections into the 1960s, while the opposition Conservative Coalition largely controlled Congress from 1938 to 1964.”

“The New Deal had many programs and new agencies, most of which were universally known by their initials. They included the following. Most were abolished during World War II; others remain in operation today:
Reconstruction Finance Corporation (RFC) a Hoover agency expanded under Jesse Holman Jones to make large loans to big business. Ended in 1954.
Federal Emergency Relief Administration (FERA) a Hoover program to create unskilled jobs for relief; replaced by WPA in 1935.
United States bank holiday, 1933: closed all banks until they became certified by federal reviewers
Abandonment of gold standard, 1933: gold reserves no longer backed currency; still exists
Civilian Conservation Corps (CCC), 1933–1942: employed young men to perform unskilled work in rural areas; under United States Army supervision; separate program for Native Americans
Homeowners Loan Corporation (HOLC) helped people keep their homes, the government bought properties from the bank allowing people to pay the government instead of the banks in installments they could afford, keeping people in their homes and banks afloat.
Tennessee Valley Authority (TVA), 1933: effort to modernize very poor region (most of Tennessee), centered on dams that generated electricity on the Tennessee River; still exists
Agricultural Adjustment Act (AAA), 1933: raised farm prices by cutting total farm output of major crops and livestock; replaced by a new AAA because the Supreme Court ruled it unconstitutional.
National Industrial Recovery Act (NIRA), 1933: industries set up codes to reduce unfair competition, raise wages and prices; ended 1935. The US Supreme Court ruled the NIRA unconstitutional
Public Works Administration (PWA), 1933: built large public works projects; used private contractors (did not directly hire unemployed). Ended 1938.
Federal Deposit Insurance Corporation (FDIC) insures bank deposits and supervises state banks; still exists
Glass–Steagall Act regulates investment banking; repealed 1999
Securities Act of 1933, created the SEC, 1933: codified standards for sale and purchase of stock, required awareness of investments to be accurately disclosed; still exists
Civil Works Administration (CWA), 1933-34: provided temporary jobs to millions of unemployed
Indian Reorganization Act, 1934: moved away from assimilation; policy dropped
Social Security Act (SSA), 1935: provided financial assistance to: elderly, handicapped, paid for by employee and employer payroll contributions; required 7 years contributions, so first payouts were in 1942; still exists
Works Progress Administration (WPA), 1935: a national labor program for more than 2 million unemployed; created useful construction work for unskilled men; also sewing projects for women and arts projects for unemployed artists, musicians and writers; ended 1943.
National Labor Relations Act (NLRA) / Wagner Act, 1935: set up National Labor Relations Board to supervise labor-management relations; In the 1930s, it strongly favored labor unions. Modified by the Taft-Hartley Act (1947); still exists
Judicial Reorganization Bill, 1937: gave the President power to appoint a new Supreme Court judge for every judge 70 years or older; failed to pass Congress
Federal Crop Insurance Corporation (FCIC), 1938: Insures crops and livestock against loss of production or revenue. Was restructured during the creation of the Risk Management Agency in 1996 but continues to exist.
Surplus Commodities Program (1936); gives away food to poor; still exists as Food Stamp Program
Fair Labor Standards Act 1938: established a maximum normal work week of 44 hours and a minimum wage of 40 cents/hour and outlawed most forms of child labor; still exists, hours have been lowered to 40 hours over the years.
Rural Electrification Administration, (REA)one of the federal executive departments of the United States government charged with providing public utilities (electricity, telephone, water, sewer) to rural areas in the U.S. via public-private partnerships. still exists.
Resettlement Administration (RA), Resettled poor tenant farmers; replaced by Farm Security Administration in 1935.
Farm Security Administration (FSA), Helped poor farmers by a variety of economic and educational programs; still exists as Farmers Home Administration. ”

“The Banking Act of 1933, Pub.L. 73-66, 48 Stat. 162, enacted June 16, 1933, was a law that established the Federal Deposit Insurance Corporation (FDIC) in the United States and introduced banking reforms, some of which were designed to control speculation.[1] It is most commonly known as the Glass–Steagall Act, after its legislative sponsors, Senator Carter Glass (D—Va.) and Congressman Henry B. Steagall (D—Ala.-3). Some provisions of the Act, such as Regulation Q, which allowed the Federal Reserve to regulate interest rates in savings accounts, were repealed by the Depository Institutions Deregulation and Monetary Control Act of 1980. Provisions that prohibit a bank holding company from owning other financial companies were repealed on November 12, 1999, by the Gramm–Leach–Bliley Act, named after its co-sponsors Phil Gramm (R, Texas), Rep. Jim Leach (R, Iowa), and Rep. Thomas J. Bliley, Jr. (R, Virginia).[2][3]
The repeal of provisions of the Glass–Steagall Act of 1933 by the Gramm–Leach–Bliley Act effectively removed the separation that previously existed between investment banking which issued securities and commercial banks which accepted deposits. The deregulation also removed conflict of interest prohibitions between investment bankers serving as officers of commercial banks. Some economists believe this repeal directly contributed to the severity of the Financial crisis of 2007–2011 by allowing Wall Street investment banking firms to gamble with their depositors’ money that was held in commercial banks owned or created by the investment firms.”

“The argument for preserving Glass–Steagall (as written in 1987):
Conflicts of interest characterize the granting of credit (that is to say, lending) and the use of credit (that is to say, investing) by the same entity, which led to abuses that originally produced the Act.
Depository institutions possess enormous financial power, by virtue of their control of other people’s money; its extent must be limited to ensure soundness and competition in the market for funds, whether loans or investments.
Securities activities can be risky, leading to enormous losses. Such losses could threaten the integrity of deposits. In turn, the Government insures deposits and could be required to pay large sums if depository institutions were to collapse as the result of securities losses.
Depository institutions are supposed to be managed to limit risk. Their managers thus may not be conditioned to operate prudently in more speculative securities businesses. An example is the crash of real estate investment trusts sponsored by bank holding companies (in the 1970s and 1980s). ”

“The argument against preserving the Act (as written in 1987):
Depository institutions will now operate in “deregulated” financial markets in which distinctions between loans, securities, and deposits are not well drawn. They are losing market shares to securities firms that are not so strictly regulated, and to foreign financial institutions operating without much restriction from the Act.
Conflicts of interest can be prevented by enforcing legislation against them, and by separating the lending and credit functions through forming distinctly separate subsidiaries of financial firms.
The securities activities that depository institutions are seeking are both low-risk by their very nature, and would reduce the total risk of organizations offering them – by diversification.
In much of the rest of the world, depository institutions operate simultaneously and successfully in both banking and securities markets. Lessons learned from their experience can be applied to our national financial structure and regulation.”

“The Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203, H.R. 4173) is a federal statute in the United States that was signed into law by President Barack Obama on July 21, 2010. The Act is a product of the financial regulatory reform agenda of the 111th United States Congress and the Obama administration.
Journalist Gretchen Morgenson argues that the Dodd–Frank Act is not strong enough, arguing that it fails to protect consumers adequately, and, more importantly, fails to cut big and interconnected financial entities down to size.
Think-tanks such as the CEE Council have argued that the dismantlement of the Glass–Steagall Act was only the symptom of a much deeper problem: the emergence of a new economic paradigm associating the worst interpretations of Keynesian monetary stimulus with unbridled deregulation that came to define the Clinton and Bush eras (1993–2009). In that perspective, they view the Dodd–Frank Act as insufficient, lacking the broad provisions necessary to restore financial orthodoxy and minimize conflicts of interests.”

“The Middle Way is a dynamic teaching as shown by the traditional story that the Buddha realized the meaning of the Middle Way when he sat by a river and heard a lute player in a passing boat and understood that the lute string must be tuned neither too tight nor too loose to produce a harmonious sound.”

“In Zen Buddhism the Middle Way describes the realization of being free of the one-sidedness of perspective that takes the extremes of any polarity as objective reality.”

“When light is ended, then there is darkness. By the means of light, darkness manifests; by the means of darkness, light manifests. [Their] coming and going are mutually proximate causes and become the meaning of the Middle Way.’”

All these “isms”……..”anarchism”,”capitalism”, “communalism”, “communism”, fascism”, “individualism”, “socialism”, and all “other” “isms” have to learn moderation and that the “middle way” is the ‘top”……….;We transgress it at our peril!………;+)

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