Saturday, January 4, 2014

13 Game-Changing Reforms For America

Game Changer #1: Get Money Out of Politics and Address Corruption in Corporate Boardrooms
  1. Get money out of politics.  Go with all Federal money for national campaigns--no private contributions should be permitted. 
  2. Ban lobbyist money too.  Ban SuperPacs.  Just say no.  Make all contributions to national politicians illegal.
  3. Downsize and basically eliminate the NSA.  Change the focus of the NSA to the monitoring of all the financial transactions, emails, and phone calls of our national politicians and bureaucrats to enforce the ban on contributions to national politicians.  See Game Changer #3 below.
  4. We need the "fresh air" of shareholder democracy at our corporations.  Pass rules that shareholders must approve executive pay packages including stock options, etc. Complete disclosure of pay packages must be made for shareholder vote.  Pass laws that major investors like public pension funds must be on the Boards of Directors (by law).  
Game Changer #2:  Banking and Financial Reforms; Hold Bankers Responsible for Financial Malfeasance and Improve Financial "Visibility"
  1. Repeal Dodd-Frank (it's already 5200 pages and not finished nor completely implemented) or bring back the Glass-Steagall separation of regular banking from investment banking.  Limit leverage in both "regular" banks and "investment" banks to 12 to 14 times capital (ie.,conservative).
  2. Make bankers responsible for bank failures. Pass laws against "financial malfeasance" where, if convicted, bankers would be liable for jail time and salary claw-backs for serious "financial malfeasance."  If a bank requires government assistance, then the entire executive suite and board should be tried in court for financial malfeasance and face possible jail time.  That will do wonders!
  3. No off-balance sheet items---make everything clearly stated on the balance sheet and shareholder reports (and filings with the government regulators). 
  4. Put derivatives on exchanges and have banks/investment houses mark-to-market all hedging positions at the end of each day.
Game Changer #3: Restore Constitutional Guarantees
Repeal the Patriot Act and vastly downsize the NSA.  Instead, turn the remaining NSA surveillance focus on the monitoring of all emails, phone calls and transactions of all of the national politicians and the lobbying groups to prevent politicians from being paid for political favors as above.  
Game Changer #4: Immigration Reform Using a Point-Based Ranking System
  1. Institute a point-based immigration system similar to Canada's immigration system.  ALL applicants could apply to various categories of immigration and be admitted through quotas and ranked objectively by a point system.  Illegal and undocumented Latinos already in the US should be required to register and should be given a one year visa (with permission to work) then given consideration only through the point-ranking system. Speaking English should be one significant source of "points" for most categories other than "agricultural worker" or "unskilled laborer." See Bring On an Immigration Point System and Canadian Immigration System is Far Superior to the US.
  2. Expand immigration from Developed areas of the world and less from 3rd World Nationalities.
  3. Invite foreign graduate students, master's and doctoral candidates, to immigration interviews.
  4. Allow local law enforcement in The States to check documentation during routine law enforcement. This will appropriately send a message that we are tough on illegal immigration.
Game Changer #5:  The Shale Energy Revolution Gives Our Country Time To Transition to Safer Thorium Reactor Technology and a Low Carbon Future
The shale energy revolution is helping to reduce our oil imports and this trend will continue for the next 10 or 15 years.  This gives us time to transition to the next long term solution for our nation's energy supply:  thorium (molten salt) reactors. The US invented these reactors but instead China and Norway are already beginning to use them on a small scale before adopting them for widespread use.  There are many advantages to the use of these reactors compared to Uranium reactors.  See my blogs Thorium Reactors May Solve World's Energy Crisis and How Thorium Reactors Work.

Our nation's future would be secure with widespread use of Thorium Reactors.  It's much more efficient, vastly safer, vastly less quantity and hazard to Thorium waste products.  Thorium reactors can be built intrinsically safe.  Obviously there's no carbon emissions.  Thorium is 4 times more abundant than Uranium.

We need to streamline Federal design requirements, regulation and approvals to encourage rapid adoption of this energy source.  First, we should be using them now on a small scale, pilot plant basis as China and Norway are doing now.  We need pilot plants to work out any design problems before widespread adoption.  All of this will take 10 years, so we need to start now.

The future of this country is electric cars and electric mass transit powered inexpensively by Molten Salt Thorium Reactors.
Game Changer #6: Reform US Tax Code to Bring Back Manufacturing Jobs from Asia
Reform Corporate Tax Codes and bring back manufacturing jobs from Asia!  High corporate tax rates in the US, the highest in the world, creates an incentive for companies to locate and/or stay overseas.  The rest of the world has been lowering their rates and attracting our companies!  And it's worked--to our disadvantage!!  See Businesses Export Jobs Because of High US Corporate Taxes.  
Manufacturing jobs throw off many jobs for the bottom marginally skilled 50% of our population who are suffering so much.  Could anything be more clear?  
 Game Changer #7: Address Income Inequality: Reform the Federal Reserve and Change the Federal Gov't Policies, Rules, Laws and Tax codes that Create the Income Inequality
  1. Eliminate the mortgage interest deduction for mortgages for well-off taxpayers (at least) and the preferred capital gains treatment for house sales.  There is no need to encourage speculation in housing and the "flipping"of housing.  These preferred tax treatments helped cause the last bubble/bust that continues to hurt this country.  Another bubble/bust is coming absent reforms.
  2. End the never-ending money printing program at the Federal Reserve putting trillions of dollars in the hands of the top 0.01%.  This is inflating all of the assets held by the wealthy and probably creating the next bubble/bust.
  3. End the ZIRP policy (Zero interest rates) now: normalize short-term interest rates to match or exceed current inflation rate (ie.,establish a normal fed funds rate).  This helps mom and pop savers and retirees who are trying to scrape-by collecting money on CDs and deposits.
  4. Stop the insane policies of the Fed to further increase inflation when it's already near 2%.  This hurts most people and actually helps the top 10% (who can afford inflation hedges).  A target of 2% will causes prices to double every 36 years.
  5. End the dual mandate and reform the Federal Reserve.  Their sole functions should be maintain zero inflation and be a lender of last resort only.  The Fed should be mandated to maintain zero inflation (or less) by using rule-based methods to control the growth of debt and monetary aggregates to something like 2 or 3% per annum (consistent with the real growth rate of the economy) which will stabilize prices.  Without excessive credit growth, prices should be steady or decline--not rise.  Imagine people being able to afford housing, medical care and get an education!  Their 2nd mandate has always been to be "a lender of last resort" in a financial crisis consistent with it's original purpose.  First and foremost: the Federal Reserve should NOT be the CAUSE of more financial crises!!!  See Booms and Busts Due to the Federal Reserve.
  6. End the insane addiction to the failed Keynesian economics.  Paper money is NOT wealth. Increasing paper money does not increase wealth.  Government spending does not create wealth either.   It causes inflation, hampers growth, distort trade balances, debases the dollar, and hurts the least well-off while helping the wealthy who have 'hedges.' 
  7. Balance the Federal Government Budget and keep it balanced. Excessive government spending inflates medical and education costs. Austerity on THE GOVERNMENT itself will be healthy for the real economy and eventually help ordinary people.
Game Changer #8: Replace ObamaCare, Reform Insurance and Curb Medical Costs

ACA will end badly as it doubles down on a broken system.  Fix the system instead and focus on reducing medical costs. The program promises subsidies for 60% of the population. Who's going to pay for that?  How is that going to work?  ObamaCare is already causing huge distortions in health insurance pricing and is too coercive: doctors are fleeing, hospitals are fleeing and most ordinary people would like to flee if they had a choice.   Replace ObamaCare, Reform Health Insurance and Curb Medical Costs
  1. Give the States "block grants" of money to spending on Medicaid and Medicare.  Cap the growth of these Federal entitlements to 2% or less.  Let the States spend the money and take steps to better take care of their citizens.  State money would be added onto Federal money as is seen fit by each State.
  2. Tort reform to reduce medical costs.
  3. Shift individuals to their own medical policies and away from employer coverage (making them portable).  This is the main reason that people get stuck with pre-existing conditions.  Give individuals the tax breaks to have their own insurance policies instead of companies.  Companies would then pay the monies that they would have spent for medical policies directly to employees.  The employees wouldn't pay tax on that money.  Companies could pay health care monies into employees health savings plans.
  4. Further encourage/expand medical savings plans which allow for more high-deductible policies (people paying more of their bills; questioning pricing and demanding the lowest price, more "skin in the game"),
  5. Transition sick people without coverage and pre-existing conditions to high risk pools with state and federal government support.  BTW, These high risk pools are being eliminated as part of ACA!
  6. Reform or replace the Medicaid system to a substantial "premium support" or outright voucher program so that people shop for their own policies. Again government expenditures should be fixed or limited rather than open-ended.  Limiting government expenditures should truly moderate medical cost inflation.
  7. Encourage more supply of medical professionals including physicians assistants.
  8. "Bust the trusts" of AMA and Big Pharma: outsource drug supply via worldwide bidding and graduate more doctors
  9. Allow pharmacists to dispense medicine without a doctor's prescription.  Pharmacists can handle most issues and they know when they don't know enough.
Game Changer #9: Eliminate Public Unions and Reduce the Cost of Government
  1. Outlaw public sector unions at local, state and national levels. Even FDR advised this. Teachers unions are hurting our kids and not helping, all other public unions only extort taxpayer money. Government employee benefits are estimated to be 45% too high compared to private sector.  Pensions are driving cities to bankruptcies already and expect more. Zero interest rates are NOT helping pension plans either.
  2. Cut public employee costs; kill defined benefit plans for public workers and scrap Davis-Bacon and all prevailing wage laws for public workers.  (hat tip to Mike Shedlock at  Globaleconomicanalysis Blogsite)
  3. Pass national "right to work" laws to allow individuals true freedom to join or not join unions.
  4. Freeze Federal employees salaries and reduce benefits which have ballooned 45% higher than similar jobs in the private sector.
Game Changer #10: Bring Back Sound Money: Downsize and Reform the Federal Reserve.
  1. Downsize the Federal Reserve. Require ordinary citizens and businessmen representation on Federal Reserve boards. Alternatively eliminate Fed Reserve boards all together.  Go with a rule-based system to automatically guide monetary policy.  See item #3.
  2. Change the current dual mandate of maintaining full employment and controlling inflation to this dual mandate:  a) maintain ZERO inflation  and b) function as a lender of last resort. Creating a lender of last resort was the original purpose of the Fed.  The Fed was created to reduce the number banking crises and panics that led to prolonged recessions.  That's fine but if money is lent out in an emergency, it must be sterilized and reversed promptly.  No more of this targeting of 2% inflation rate!!  That's terrible! 
  3. Change the Fed's charter to require that the Fed abide by a rule-based policy of controlling debt and/or monetary aggregates to allow a increase by 2 to 3% per annum to match the real growth rate of the economy.  Inflation would average at zero percent with this rule, with fluctuations above and below zero.  This has all the advantages of a gold standard but less disadvantages. Yes, short term interest rates would be much more volatile but that's OK.
  4. Outlaw money printing (which now stands at $4 TRILLION and threatens future inflation)
Game Changer #11: Require that the Federal Government Balance It's Budget
a)  Consider passing a constitutional amendment or b) Pass a Federal law to require that the Federal Government must balance it's budget just like the vast majority of States.  If there is war, then taxes should rise to pay for them as they did in the past.  I'm leery of exceptions for "national emergencies." Alternatively, hold the line on further debt limit increases.  See The New Civil War: No More Debt!

Balance the budget now.  A reduction of government spending amounting to 4 or 5% of GDP, our current deficit, would have less effect on the economy than is commonly feared.  The US cut government spending from 1945 to 1947 from over 50% of GDP to about 11% of GDP and there was not a huge problem.  Spending was cut sharply after the Korean War as well.  We can balance the budget now.  It would have surprisingly little negative impact (it had relatively small effect when deficits soared).
Game Changer #12: Acknowledge that about 40 to 50% of Blacks and Hispanics Don't Have the Intellectual Capability to Graduate from US High Schools, We Need An Alternate Path
Black and Hispanic births are already the majority of births in this country; on the way to a white minority by 2040.  But about half of those students don't have the intellectual capability to graduate our current "academic" high schools----so let's focus on teaching them practical job skills and life skills. We need to create a "vocational high school" path for young people who can not graduate an "academic" high school.  It should all be voluntary. The vocational option might appeal to even more young people who are doing fine in our high schools, as currently defined.
There has been no change in the performance of black students on standardized tests despite 40 years of affirmative action and increased spending. We need to be realistic and acknowledge the facts that about 1/2 of those populations will not complete high school. They need a great, practical alternative other than jail or the military. There is no sense to continue trying what is obviously not working.
Game Changer #13: Acknowledge that the Drug War is Lost: Legalize some drugs like Marijuana, tax it and regulate it.
Eliminate Federal laws against marijuana, and possibly for cocaine and minor drugs. Allow the States, the true incubators of public policy, to lead the way as in Colorado. Take away the drug cartel's power! See my blog: It's Time to Legalize Marijuana.

No comments: