WSJ: "Banks Face Loss of Debt Guarantee" reports the FDIC started an emergency debt guarantee program during the height of the crisis to help unfreeze the credit markets. The FDIC is certainly not credited enough for all their great work. The program "allowed banks, for a fee, to issue new debt with government backing that protects investors in the event of a collapse." The thing about Bair is that she helps to get the market going without favoring the banks, like any good citizen who gave a damn about society would do. She therefore is planning to allow the program to expire as it is supposed to because the FDIC's purpose is not to make the government the main engine for lending or the main vehicle for bank profits. If this were the Fed, they'd run the program until half of all of our middle class were gone.

Because we support people who do good work and fight to take away power from those who do bad work, we have a petition called "No new powers for the Fed". Because the Federal Reserve have not responsibly worked in the public's interest in the past 80 years, evidence of which came out during the economic crisis, we've been looking at how they have overwhelmingly colluded with the banks over the safety and soundness of the American taxpayer. Our conclusion is that the Fed should not get more of the kind of power they have already abused, period. Sign on to tell the Fed and the world that the Fed did a bad job and they need to make up for it. Recently dubbed "No Fed", see the petition and sign on here.

Our position is that the Fed should be audited as Ron Paul has pushed for and that there needs to be a regulator of the economy that is completely independent of the banks. We have enough academic and practicing economists outside of Wall St that we can reliably work with.

The Nation has an article from the Institute for Policy Studies -- we've had contact with them when their Boston effort, Common Security Clubs helped us with our forum organizing. This article gives an extremely good lay of the land on the economic crisis from last year until next year.

"For Americans eager to know whom to blame, we have some suggestions: Vikram Pandit, Lloyd Blankfein, Kenneth Chenault and James Dimon. Pandit is the CEO of Citigroup, where he received a compensation package worth $38 million in 2008, while slashing 75,000 workers and taking $50 billion of taxpayer bailout funds. The other three executives, CEOs of Goldman Sachs, American Express and JPMorgan Chase, respectively, all made at least $35 million in 2008 while accepting billions from taxpayers and cutting thousands of jobs. "

Here are some really exciting developments:
"A number of groups are working collaboratively to develop innovative proposals for change. Americans for Financial Reform has garnered the support of dozens of groups to press for a strong Consumer Financial Protection Agency and other important protections against future crises. The New Economy Working Group, to which IPS belongs, is charting a transformational agenda that would break up large banks like Citigroup and ban the casinolike financial instruments that sparked the crisis. Jobs with Justice and its grassroots allies like Right to the City are creating momentum behind a National Investment Bank."

On the same note, look at the CEED Program - their director just got in touch. They are starting a non-profit bank that will give out loans to local green businesses. They're excited to offer this opportunity for change while Congress is busy being Congress.

Chuck Collins, who has been really helpful to the ANWF fight helped to produce IPS' recent report on "Executive Excess". I am more and more in love with IPS' work.

Not sure if economist James Galbraith is answering these questions directly, but I think he makes an important point about where we are with the economy - have we rebounded as Obama said last night? The answer is we're not seeing it on the housing end. From the Economist.

"Q: Some economists fear a double dip back into recession next year and sluggish growth for years to come. Are we looking at a 'Lost Decade' similar to Japan in the 1990s?

A: "There's no way we're going to tolerate a Lost Decade in this country. It's a fantasy, because the House of Representatives has elections every two years. The country is not going to tolerate 10 percent unemployment indefinitely. People (in power in Washington) need to be aware of that. If they don't take the opportunities now . . . someone else will."

Q: There are economists who think the recession may already be over. When will it start to feel like recovery?

A: "This one it's very hard to see, in part because it is so rooted in the collapse of (fast-rising) credit and home values. It's hard to see a similarly rapid end and turnaround. That's the challenge for policymakers, whose time horizons are probably focused on next year's election.""

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