New Jersey Public Pensions – A Comparative Perspective

By Michael P. Riccards

One of the major foundations in this country, operated by the Pew group, is a center devoted to the states which examines the challenges that impact pensions in the fifty states. The comparative study of public pensions offers conclusions that we in New Jersey would do well to heed.

The study completed in 2008 shows serious problems in the funding mechanisms of most jurisdictions, but generally the states in 2008 had enough assets to cover about 87 percent of their liabilities.  In the last several years, the worth of many of these public pensions (as well as private pensions) has dropped appreciably.  In the case of New Jersey the pension system had once achieved a balance of $86 billion. Now assets are closer to $56 billion.

According to Pew, the total bill coming due in the state is $109.6 billion.  This does not include calculations for other benefits, most notably medical costs, costs that are rapidly rising from the early Pew calculation of $21.6 billion.  Medical costs are complicated by the role that the Federal government may soon play, but we do know that New Jersey has put $0 aside to cover the other benefits costs as of now.

Nationally, the total US bill for pensions and benefits in the public sector is $2.73 trillion over the next several decades.  New Jersey has consistently fallen short with its contributions.  Some states like Georgia and Oklahoma require that any proposed benefit increase be complimented by an actuarial calculation of costs.

One interesting development is the offering of hybrid plans in at least four states that combine elements of defined benefits and defined contribution plans.   The first plan assures the retiree a specific dollar amount. The second, the idea of a defined contribution, is one in which the employer is committed to put into the account a specified amount of money.  Some states like Oregon blend both mythologies.  By 2000, about half of the states’ pensions systems were fully funded, largely due to the strong performance of the stock market.  But the movement to equities and the great recession of the last two years has resulted in huge declines in the worth of state portofolios.

In New Jersey, the state’s legislative representatives proposed replacing the traditional defined budget plan for newly elected and some appointed officials, and prohibited professional service contractors from being part of the state’s pension plan as of January 2008.  The state also approved a 10 percent increase in contributions for some public employees.  Critics have argued however that state changes have not gone into effect in  ways that had been anticipated.

Across the nation, state pension problems have been aggravated by the costs of other post retirement benefits—most especially health care.  With the current national debate over health care and the acceleration costs of medical technology and testing, the issue of guaranteeing medical care for all retirees in the public sector has become extremely complicated.

The Pew study concludes that “New Jersey has done an abysmal job of keeping up with annual funding requests for its pension system.”  In addition, the state is facing a bill of over $21 billion for other benefits, and the costs are growing rapidly.  No funds have been set aside for the latter commitment.  Officials in New Jersey have too often discounted concerns about the pension fund, insisting that the least bit of criticism is partisan inspired.  It is impossible to make that accusation against Pew.  Like it or not, New Jersey is becoming the General Motors of the states: bloated, slow moving, unconcerned about quality, union driven, and unreceptive to change, reform, and readjustment.


Police Abuse and the Mentally Ill: An Unacceptable Consequence of Limited Training

By Salvatore Pizzuro

The recent beating of Ronnie Holloway, a mentally ill adult male, by Passaic Police Officer Joseph R Rios III, has brought attention to a long-existing problem. Quite often, mentally ill people, because of communication barriers that may exist as a result of their disability, become the victims of police abuse. In some cases, the abuse leads to injury and death.

Ronnie Holloway was simply walking through his home neighborhood, in Passaic, New Jersey. A surveillance video tape showed Holloway standing outside Lawrence’s Grill and Bar. A police car pulled up and Holloway was asked by a female officer to zip up his sweatshirt. Holloway complied, yet he was subject to a savage beating by Officer John Rios III with fists and a police baton, before being thrown into a police car and taken into custody.

Ronnie Holloway spent the night in a jail cell, with no medical attention paid to his injuries. Worse still, a short list of offenses were fabricated and levied against the disabled adult in order to justify the arrest.

The world would have learned little more about this had it not been discovered that a surveillance video tape from a camera outside Lawrence’s Grill and Bar had recorded the entire incident. Holloway was simply standing on the street corner, committed no evident crime, and did not resist arrest. Clearly, there appeared to be no justification for the policeman’s actions.

Ronnie Holloway does not have a criminal record and is not a threat to society. He is a citizen with a significant disability who became an assault victim. The very people who were worn to protect him became his oppressors.

The incident occurred on May 29, 2009. Since June 5, 2009, the video has been shown around the world. Perhaps more significant than the beating itself is the action of fabricating charges against Holloway, including intent to purchase drugs and resisting arrest. This, in itself, is a serious criminal action, requiring the most complete prosecution of the law against those who helped to facilitate the fabrication.

The victimization of the mentally ill continues. According to Eugene O’Donnell of Newsweek:

From coast to coast, mentally ill people, without reliable access to the costly on-demand care they need, are left to fend for themselves. In the aftermath of the movement in the 1970s to close large mental asylums, many of today’s mentally ill are left to their own devices; they are often homeless and without full-time advocates. With government unable or unwilling to properly serve this population, the criminal-justice system is left to pick up the slack.

Contrary to what many assume, the mentally ill are most often the victimized, not the victimizers. A 2005 study by researchers at the Feinberg School of Medicine at Northwestern University suggested that persons with serious mental illnesses are 11 times more likely than the general population to be victims of violent crime, with perhaps as many as 1 million crimes committed against those with serious mental-health issues each year.

But relying on the police to address the problem has too often resulted in tragedy, not only on the mean streets of big cities but in quieter places as well. (Newsweek Web Exclusive, July 31, 2008).

The influence of a civilian disability, whether developmental, intellectual, physical, or behavioral, on police behavior during a crisis intervention, has been studied by psychologists, legal experts, and civil rights activists, for decades. A result of this examination was the creation of the “Memphis Model”, a crisis intervention plan by a police agency that has garnered nationwide attention.

The model was initially created because, during emergency situations, police would encounter behavior or communication barriers among people with disabilities that could not be correctly interpreted. The Model was created to enable the Memphis, Tennessee Police to train a Crisis Intervention Team to react properly to people with mental illness during emergency responses.

New Jersey State Assemblyman Fred Scalera (D., 36th Legislative District) sponsored Legislation that will similarly serve citizens with Autism and other disabilities. The Assembly Health and Senior Services Committee released this legislation that has since been passed by both the Senate and Assembly and has become law. Assemblyman Scalera sponsored the bill to establish an autism awareness training course for emergency medical technicians, police and firefighters.

According to Scalera:

Although New Jersey is a national leader in providing care and support for those with autism, it is essential that our first-responder network is sufficiently trained to recognize autism and how to handle individuals who have this disorder.

This new law will require the Department of Health and Senior Services (DHSS) to create a mandatory autism awareness training course and curriculum. Individuals currently certified as emergency medical technicians would be required to complete a continuing education course in autism recognition and response techniques, and prospective emergency medical technicians would be required to complete the DHSS administered course prior to being certified.

Asemblyman Scalera also points out that:

New Jersey’s police officers and firefighters need the tools and training to understand and help individuals with autism. This autism awareness program will make police officers and firefighters better professionals.

The legislative measure will require currently employed police officers and firefighters, along with volunteers, to complete a continuing education course in autism recognition and response. The Division of Fire Safety and the Police Training Commission will also be required to implement the DHSS training course curriculum as part of the training of police recruits and firefighters.

The aforementioned Memphis Model has been used to train Crisis Intervention Teams (CIT) to recognize a special population that needs special care, treatment, and service. According to the Memphis Model:

Traditional police methods, misinformation, and a lack of sensitivity cause fear and frustration for consumers and their families. Too often, officers’ respond to crisis calls where they felt at a disadvantage or were placed in a no-win situation.

Unfortunately, it is usually after a tragedy that police departments look for change. As a proactive program, CIT acts as a model committed to preventing tragic situations and finding “win-win” solutions for all persons concerned.

By offering an immediate humane and calm approach, CIT officers reduce the likelihood of physical confrontations and enhance better patient care. As such, the CIT program is a beginning for the necessary adjustment that law enforcement must make from a traditional police response to a more humane treatment of individuals with mental illness.

The City of Memphis lists some of the benefits of the CIT Model:

• Crisis response is immediate
• Arrests and use of force has decreased
• Underserved consumers are identified by officers and provided with care
• Patient violence and use of restraints in the ER has decreased
• Officers are better trained and educated in verbal de-escalation techniques
• Officer’s injuries during crisis events have declined
• Officer recognition and appreciation by the community has increased
• Less “victimless” crime arrests
• Decrease in liability for health care issues in the jail
• Cost savings

Many similarities exist between the goals of Assemblyman Scalera’s Training for First Responders in New Jersey and those of the Memphis Model. Perhaps the most important similarity may be that effective communication techniques should be utilized by law enforcement, fire, and other agencies when attempting to apply crisis intervention at a site where the civilians are compromised by limited communication because of a disability.

Regarding the Ronnie Holloway case, all too often when similar incidents have occurred in the past, there have been efforts by local officials to “cover it up and hide the facts”. Hopefully, the widely released video has prevented this from happening. Nevertheless, the criminal action of fabricating charges against Holloway must be prosecuted. This is not only important to Holloway and all people with mental illness; it is required to protect every private citizen from such abuse.

Prayer and the Public Arena

By Michael Riccards

I pray.  Yes, you have read it here. I pray for family, friends, people I have never met, for intercessions, for special intentions, and in thanksgiving.  Prayers are special communications with God and/or saintly people asking them to honor one’s petitions.  So I have nothing against prayer in general.  And I don’t make fun of the idea that with 6 or 7 or 8 billion people on this planet, some Almighty Being cares about my needs.  I just accept it, and move on from there.

So you will now feel less uncomfortable with my deep reservations about National Prayer Day.  The notion of a national prayer day is an old idea. President Thomas Jefferson rejected the call for such observations saying that it was inappropriate for a civil magistrate to be mandating such religious observations.  But President Harry Truman, in the midst of the Cold War against atheistic communism, decided to declare such a remembrance, and conservative Ronald Reagan and George Bush II got maximum political advantage out of it.  Now President Obama simply acknowledged it, but did not turn the White House over to the fundamentalists as Bush did.

Governor Jon Corzine of New Jersey issued a proclamation, and about 50 people showed up in front of the state house to fight the forces of secularism and relativism on a rainy day. They were mainly Protestant fundamentalists who spoke about the spiritual state of the state, scriptures in the schools, the high court, cabinet and Congress, black genocide, the media, youth, the military, peace in the Mideast, children, state government, cultural assaults on the family, the economy, Spanish ministry, business, the restoration of the nation, and police and fire fighters.

I feel uneasy in appropriating prayer day and praying in a civil observance.  First, prayer should be a very personal and special call to God, and not a rallying cry for my political agenda.  Second, it is not the purpose of the president or the governor to mandate that I “pray for […].”  That really is none of their business.  But it does not mean that religious beliefs do not influence what people do in politics, or what they say on high occasions.

Nor am I making an observation about this being a multi cultural, multi- religious society—although it surely is and has become more so lately.  I don’t just pray in church, but often by myself…but that is really my business, and not that of the government or its elected officials.  If they pray, I guess that is good, but I am more likely to judge them by how they make important decisions than how many hours they spend at prayer ceremonies, beating their breasts in front of others, for it is only your Father who knows your heart.

I also think that prayer in the public arena lends itself to clergy using religion to push their own agendas.  I could not notice without disdain how the National Catholic Prayer Service turned into an anti-Obama rally, featuring reactionary justice Antonio Scalia and the extremist bishop of St. Louis who has decided to chastise Catholics for voting for Democrats.

That is the problem with the fusion of church and state. In the end they both grow weaker and more vulnerable.  Jefferson was right—there should be a wall of separation which in turn protects them both.  Bishops and ministers who preach the politics of division are as bad as presidents who use the Bible to perpetuate anti Moslem stereotypes.

Vera Glaser: A Journalist’s Ode to Offbeat Washingtonian Politics


In 1969, President Richard Nixon made the mistake of placing a journalist on the White House’s Task Force on Women’s Rights and Responsibilities. The group issued a report that documented gender-based inequities everywhere. The Task Force made 20 recommendations – 19 of which became law. (Only the Equal Rights Amendment was overlooked.) When the White House refused to release that report to the public in 1970, the journalist secretly passed the document to her friend women’s page editor Marie Anderson who ran the report in the Miami Herald. That journalist was Vera Glaser, who died in November 2008.

Although not well known, Glaser’s Washington journalism career was long and influential. In the beginning, she had seen politics from the inside. In the 1940s she began doing public relations work for the National Republican Party and later she served as a press secretary for a senator. But it was covering politics as a journalist where Glaser made her mark. She became the first female Washington Bureau chief in the 1950s – working for the North American Newspaper Alliance. (This was well before the media started documenting female firsts.) She also appeared on Meet the Press and local Washington radio programs.

Glaser had come by her feminism awareness early. She was born and raised in St. Louis, Missouri. She was interested in journalism in high school and graduated first in her class. That position typically meant a scholarship to Washington University. Instead, the honor went to a male student who had only been at the school for a few months. Decades later, she credited that snub, plus some workplace discrimination, for turning her into “a fighting feminist.” This was a title she wore proudly.

Glaser was enlightened well before the second wave of the women’s movement, and her stories on inequalities pre-date any of the more visible feminist events such as marches and protests. She was covering women’s issues before Betty Friedan and Gloria Steinem were household names, as was noted by her good friend and feminist Catherine East who helped with stories. East was mid-level government employee beginning with the Kennedy administration. (Friedan nicknamed East the midwife of the women’s movement. East’s friends called her Deep Throat for her secretive relationship with the media.)

It was Glaser’s question to President Nixon in 1969 that led to the friendship with East. It was the President’s second press conference and it was televised. Glaser was lucky enough to be in the third row – reporters further back were unlikely to be called upon. When it was Glaser’s turn, this was her question: “Mr. President, since you’ve been inaugurated, you have made approximately 200 presidential appointments, and only three of them have gone to women. Can we expect some more equitable recognition of women’s abilities, or are we going to remain the lost sex?”

The question led to chuckles from the male reporters, and the president also initially responded as if it was a joke before seeming to realize he was on television. This was at a time when nearly every question from a female reporter led to laughter. Nixon then said he would look into the issue. This question led to stories across the country, crediting Glaser for raising the topic. Glaser was surprised to get a letter later in which East wrote, “I gather from the tone of your question, you might be interested in a few statistics.” East found a kindred spirit with Glaser and they worked together to make government more responsive for women.

The women’s partnership eventually led to Glaser’s 1969 five-part syndicated series on feminism that ran in newspapers across the country. According to Glaser, many of the facts about discrimination came from East. It was the first mainstream media explanation of women’s issues by a woman. It is difficult to overestimate how hostile journalists were to the messages of feminism. For anecdotal evidence, consider how ABC’s Evening News explained the peaceful 1970 Women’s Strike for Equality march in New York City: “Three things have been difficult to tame. The ocean, fools and women. We may soon be able to tame the ocean, but fools and women will take a little longer.”
While Glaser was an advocate, she had a whimsical spirit and added humor to the revolution. Rather than complaining that women sources were often unfairly described by their appearance in media accounts, she described male politician’s hair and fashion. At one point, she questioned whether a male official had been coloring his hair. After all, if reporters were going to describe the appearance of women, it was only fair to do the same for men.

She had a tongue-in-check approach to opening eyes to exclusion at a time when banning women in Washington was typical. This is one of her leads: “The last bulwark of congressional privacy has crumbled. A woman has invaded the secret massage parlor of the Old Senate Office Building. This reporter made the historic breakthrough. Astronauts, move over.” She went on to describe the facility in extreme, almost mocking, detail. She was a reporter with a column.

Glaser became a partner of veteran Washington journalist Malvina Stephenson on election night in 1968. They snuck into Nixon’s inner sanctum on the 35th floor of Waldorf Towers while hundreds of other reporters were stuck in the press room on the third floor of the hotel. By the time they were spotted by Nixon’s director of public relations, they already had numerous exclusive interviews and had found a copy of the campaign director’s confidential guide to election returns. They then broke the story.
Together, the two women wrote the Knight-Ridder-syndicated “Offbeat Washington” political column for five years in the late 1960s and early 1970s. They were billed as the female Evans-Novak. They were the kind of reporters of the old black-and-white movies. They broke numerous stories always looking for a unique angle, and their reporting led to them being described as “a couple of hustlers.”

Their exploits often allowed them to scoop the other Washington media. One time the pair booked a room at New York’s Roosevelt Hotel over the chief of the Chinese Mission to the United Nations. The group was new to the country and no reporter had gotten access. Instead, the journalists were kept behind a chain-link fence. Using the back stairs, the women visited the contingent’s quarters and gained interviews. It was the first look at the Chinese U.N. Mission by the American press.

Later, they interviewed an Army Chaplain who had just returned from Vietnam. The chaplain was candid about what he had seen – things were not going well. The resulting column led to an outcry to publisher John Knight from the Chaplain who denied making the remarks. The women were off the hook though – they had taped the conversation, hiding a tape recorder in the bowl of breadsticks at lunch. On their beat, they believed they had to tape everyone. They were a pair to be reckoned with and the politicians knew it.

They noted that CIA Director Richard Helms and a Russian newspaper correspondent, Boris Strelnikov, lived in the same Washington, D.C., apartment building. In a column beginning “Who is spying on whom,” they noted that the foes slept under the same roof and shared the same plumbing. They wrote about the Nixon administration’s use of expensively trained astronauts in non-space positions. They quoted an Ohio Representative who said of one such astronaut, “He is as qualified to hold that job as a pig is to be a figure skater.”

In 1971, Glaser was elected the president of the Washington Press Club. Women journalists created the organization in 1919 because women were not allowed to be members of the National Press Club. Ironically, she was the presiding president when men were finally allowed to become members the Washington Press Club. In her papers at the University of Wyoming is a letter from a new male member who found it discriminatory that there were so many female officers in the club. He recommended that more men should be elected. (The two clubs finally merged in 1985 allowing both men and women as members.)

In later years, Glaser wrote for the Mature News Network and the Washingtonian magazine. She was married to Herbert R. Glaser, an administrative officer with the National Labor Relations Board, and had a daughter, Carol Barriger. Glaser’s legacy for women and journalism is worthy of remembrance. She laid the groundwork for the women and investigating journalists who followed her. Glaser was featured in the book about Washington newswomen, Don’t Quote Me! The authors wrote of these Washington women correspondents, “They are keeping the watch on the Potomac, and because they have to work harder than men to keep afloat, their wits are often sharper.” That’s a fitting description of Glaser.

Presented at the American Journalism Historians Association-Association for Education in Journalism and Mass Communication, History Division, Meeting, March 2009, New York City.

New Jerseyans with Disabilities: Our State’s Underclass

Salvatore Pizzuro
Disability Policy Specialist

New Jerseyans with disabilities have three times the unemployment rate of their non-disabled peers. Consequently, the disability community is stunned by the State’s current plan to cut $3.8 million dollars from the program that enables non-profit agencies to prepare people with disabilities for the workforce.

People with disabilities also have a much higher rate of homelessness, and are less likely to receive adequate health care. The optimum alternative is to have as many members of the disability community serving in the workforce, paying taxes, contributing to the economy, and serving as an asset, rather than a liability, for society.

The current downturn in the economy will affect all New Jerseyans and all Americans. The State’s response to economic woes appears to be administrative belt tightening that will result in fewer people in the workforce, and fewer spending money, thus continuing a downward spiral that can end with a true economic meltdown.

An effort that has taken the disability community decades to add its members to the workforce can be setback over night. A slow moving, yet modestly successful movement can be set back thirty years. The State Administration has to launch initiatives that will truly stimulate the economy, rather than engage in cost saving measures that will only result in eliminating the little growth that is left.

Certainly, People with disabilities will increasingly move from underemployment to living on public assistance. They will increasingly become wards of the State or welfare recipients. A responsible goal for all levels of government would be to ensure that as many of these individuals as possible become employable and employed, paying taxes and contributing to society in some way. Unfortunately, the current economic crisis may eliminate many of the gains that people with disabilities have achieved over the past thirty years.

The cuts that were recently reported will be taken from a program that was designed to engage New Jerseyans with disabilities in the workforce. Unfortunately, the Corzine Administration is desperately searching for additional cost saving measures. Furthermore, it has become apparent that State income could be as much as six billion dollars less than was originally anticipated. Not only will State services be in jeopardy, but the generic standard of living will be impacted, as well.

Nevertheless, cuts in the job training programs may not save the State money in the long run if, as previously mentioned, the result is additional public money being spent on welfare programs for unemployed people who would otherwise have been members of the workforce.

The future for New Jerseyans with disabilities appears bleak. We are in danger of creating a permanent “underclass’ that will experience a lifestyle that is distinctively separate from that of their non-disabled peers. People with disabilities, including highly educated and trained professionals, remain second class citizens in New Jersey and nationally. Unfortunately, legal mandates will not change public attitudes. The concept of people with disabling conditions must change in the hearts and minds of all citizens before these individuals will receive the opportunities that they have earned and deserve.

We know that this distinctly separate lifestyle for people with disabilities exists among highly trained professionals, including medical doctors, lawyers, and others. Despite high academic and professional achievement, such individuals have experienced limited opportunities because of their disabling conditions. Sadly, efforts by the State to move these individuals into an active status in their chosen professions will continue to wane. Having such highly trained professionals sitting on the sidelines, rather than contributing to society and their professions is self-defeating for New Jersey and America.

Quite simply, New Jersey must make greater efforts to prepare for and place people with disabilities in the workforce. This effort should be intense during good economic times and bad. Acceptance of an underclass of New Jerseyans with disabilities should never be an option.

Should Bank Executives Apply for Unemployment Insurance?


I recently signed a petition sponsored by to fire Ken Lewis, the CEO of the Bank of America. The petition was obviously inspired by the Obama administration’s removal of the President of General Motors.

Of course, Lewis is an easy target. As an historian, I immediately began to compare Lewis with the founder of the Bank of America, Amadeo Giannini. The following story is well-known, even legendary in the history of the Bank of America. More than a century ago, Giannini headed a bank that catered primarily to immigrants and which lacked the resources and privileges of the bigger banks in San Francisco.

During the great San Francisco earthquake of 1906, fires devastated the city. Giannini’s bank did not have a fire proof vault, because it could not afford it. He and his associates brought the deposits out of the burning city by hand, whereas the bigger, established banks kept their money in their fire proof vaults. Giannini then cornered the market on Northwest lumber for rebuilding the city, gaining a huge advantage over his rivals.

The story is often cited as an example of capitalist “initiative,” but I see it in a different light. Giannini profited hugely from the disaster that befell San Francisco and used the profits made from that crisis to build the Bank of America. He profited by speculating on the value of the raw materials that helped rebuild San Francisco, but, of course, the earthquake was a natural disaster.

The profiteering and speculation by current Bank of America CEO Lewis and his fellow transnational bankers, either praised or winked at by the US government for decades, has largely brought on the disaster, and they are now seeking to profit yet again from it. They are not even suggesting any actions or policies on their part to foster any of the “three Rs” of the New Deal government during the Great Depression: relief, recovery, and reform (which again should be central to discussion today, because they concretely address the crisis).

The banks have said nothing about providing relief for the millions facing home foreclosures and bankruptcies, general economic recovery which will stem the rising tide of unemployment and declining real purchasing power, and reform of the entire banking system.

Assuming that the new CEOs will continue to act in a corporate culture with no real accountability to or respect for either the government or the public, is the firing of CEOs in itself a solution?

My suspicion is that new CEOs, if the same overall power structure and corporate culture remains in place, would most likely set up “Potemkin villages,” i.e., paper projects to convince the government and the people that they are doing something while they are really doing nothing. (Potemkin villages are named after the 18th century Russian general who set up building facades to convince the Czarist government that he was carrying out real construction projects.)

The appeal goes on to catalogue Bank of America’s transgressions in helping to create the present global crisis. This seems generally accurate to me and can of course be applied to the leaders of other high managers of finance capital conglomerates – transnational banks, insurance companies and brokerage houses. We should remember that these “institutions” are continuing to put the squeeze on homeowners, small business owners, middle-sized and even in some instances large corporations along with tens of millions of working people with crippling credit card debt while they receive hundreds of billions from those very people as taxpayers.

Homeowners, small business owners and working people in credit card debt face a sort of economic “redlining.” Banks in working-class and minority neighborhoods in the post Word War II era of expansion and suburbanization took their depositors’ money and used it to provide capital for suburban development while refusing to fund businesses and projects in their own communities. This discriminatory policy contributed to a decline in employment, housing and general living standards in those communities – in effect defunding them with their own money.

Banks today are refusing to use the hundreds of billion that they are receiving from the public to address the needs of the people who are threatened by the economic crisis. If anything, they appear to be engaging in a new form of redlining: hoarding capital in the Keynesian meaning of that term, that is, seeking to protect their “institutions” and creditors by not investing in recovery. Instead of acting as middlemen in the funding of recovery, they are at this point funding themselves, looking to the federal government to absorb their bad debt (“toxic assets”) as they ride out the storm. It appears that the banks are trying go back to business as usual without serious reregulation, much less public control over the banking-insurance system and major protection for homeowners, small business owners, and working people caught in the credit trap.

Removing CEOs (or creating pressure on CEOs through the threat of removal) won’t go far enough, unless it is connected to restructuring the administrative boards of the banks in question and also providing clear relief, recovery and reform policies for the new administrative officers of the banks to advance.

For example, banks receiving stimulus aid should be required to channel investment into communities and businesses that will both foster recovery and provide relief for those working families and low-income communities most threatened by the crisis – in effect an overall industrial policy. Since the Bank of America was one of the pioneers of the dissemination of mass credit cards beginning in the 1960s, it might take the lead in restructuring that debt in the interest of the people, sharply reducing the crippling interest payments which would be considered usurious through most of history (payments at 15 percent and above).

A more comprehensive long-term solution could be nationalization, that is, making the Bank of America, or at least a number of its major divisions (mortgages, auto sales and credit cards) into a public corporation and providing working people with public credit cards that would keep goods flowing in the economy as against undermining purchasing power through outrageously high interest payments.

Many are speaking abstractly about “nationalizing the banks” without coming forward with specific policies for a nationalized banking system that the people could understand and identify with. Similarly, General Motors could become the first publicly owned and publicly managed industrial corporation, reorganizing its labor relations in the interest of its workers. Such a move could revive the US auto industry through policies that would both provide incentives to Americans to purchase American cars and produce American cars that would be environmentally friendly.

These are the kinds of policies that the broad left should be advancing now, policies that begin to reach out to and educate working people. We have to advance proactive solutions now, because this period is one in which “change” can go in a number of directions. We could see either far-reaching progressive reforms in the direction of socialism or repressive forms of state capitalism with possible fascist trappings that will revive and expand the worst aspects of the Reagan-Bush policies.

The First One Hundred Days of Barack Obama


Ever since the presidency of Franklin Delano Roosevelt, the first one hundred days of an administration have been judged by a special standard concerning activity and inspiration. After dealing with the banking crisis, FDR decided to keep Congress in session and to push though, with little debate, his New Deal agenda which focused on centralized efforts to limit and control production in both factories and farms. For a people used to a very weak national government and very limited responsibility for the well being of the economy, this flurry of legislation was breathtaking. It set in stone for many Americans of that generation, the image of a benevolent activist president—an image that served FDR and the Democrats well for years to come.

Now, during the end of the Bush Administration and the beginning of the Obama Administration, we are facing a series of economic problems. By all the polls, the American people are wishing the new president well and are also supportive of his efforts. Obama too has had to deal with crippling sectors of the economy crumbling at once: housing, banks, the stock market, the automobile industry, and the overall structure of financial lending. None of us realized all those areas were so vulnerable, and that their assets were, in the new idiom, “toxic.” Greed characterized the 1920s and greed characterized our time. Reformers, conservative and liberal, wanted to roll back the FDR controls on the financial institutions, and even wanted to get us to invest our Social Security in the market. Are we lucky that Congress, in a rare moment of lucidity, did not touch the Social Security system as we know it?

In the Obama One Hundred Days we have seen the president trying to deal with some of the same problems FDR did, and often in the same ways. The basic assumption of the Obama economists is different from the early or first New Deal. They are Keynesians and they believe that we need to dump federal dollars of incredible proportions into the blood stream of the economy. But in doing so we are saving industries that should not be saved, such as GM and Chrysler which will inevitably go bankrupt. There are two camps of critics: conservatives who oppose expenditures but have no alternative plans to the Bush-Obama strategy and academic liberals who are complaining that the federal government needs to print even more money to get the economy going again.

For one hundred days Obama has followed the liberals and has also reminded Congress of the need to pour money into medical care, education, and environmentally safe alternative energy. As with the New Deal, the Obama plan provides states and thus communities with billions of dollars to help them meet their obligations and avoid bankruptcy.

Obama’s world is one in which international trade is critical to recovery, much more so than in the 1930s. FDR’s fear was deflation and he tried to control consumption and production by instituting codes of industrial conduct and raising minimum wages. Obama’s fear has to be bringing on a wild bout of inflation from all the spending he is unleashing. Both presidents have to face the fact that unemployment is an intractable problem. So much of the stimulus package is targeted at blue collar construction, as it was during the New Deal. But many more of our people are white collar professionals and are not going to benefit from bridges and highways.

Obama’s one hundred days have also tried to deal with our image abroad by apologizing (perhaps too much) for US leadership, war making, and even torture. FDR dealt very little with foreign policy in his first months of his administration.

Obama has become an international rock star, in part because he is young and fresh, and in part because of the novelty of having an African-American in the White House. No other figure could have received such receptions abroad. His is so different from the animosity of the Bush-Rumsfeld-Cheney view of the world. For one hundred days, it is not a bad record so far.