Perhaps time for some populism

I've written about the disastrous ruling by the Supremes to allow corporations to enter politics with a wide open wallet. Jonathan Alter in Newsweek says that using a constitutional amendment to reverse that decision is not a good idea because it tampers with the First Amendment and sets a bad precedent. Instead it is time for public financing of campaigns. Raise a particular amount of money (like $50K for House races) in donations of $100 or less and the candidate gets a significant amount (like $900K for the House). Yes, candidates can get a lot more from corporations but those who don't can brag about their clean financing. Several states have tried this already and voters go for the clean candidates. If Obama gets behind it he could easily get his 13 million campaign contributors to get Congress to act. It's time. Disclosure requirements are a good idea too.


Michael Hirsh and Daniel Gross on Newsweek comment on Obama taking up the populist chant. Populism can drive politicians to do some dumb things, but it can also guide them to some smart ones. Here are a few for the current Washington mess.

* Cut Wall Street compensation. The big guys say they need those huge bonuses to keep the best talent. It would be better if the rest of corporate America had access to that talent to solve useful problems, like those in medicine.

* Force investors to cut what is owed in bad mortgages. There was talk of "moral hazard" -- the idea that if borrowers had their debt reduced they would be come careless with their debit. Funny that wasn't brought up when big banks walk away from debt.

* Fix "too big to fail." Big Finance no longer has to play by free-market rules.

* Restore basic commodities to market prices by curbing speculators.

* Reform tax policy. The general wisdom is we should tax something if we want to discourage it (which means a big gasoline tax is the only way to get to more fuel efficient cars, which Europe has done well). So if we want jobs we should reduce payroll taxes. Lessen Wall Street speculation by taxing it. The tax climate for investing was the best it has ever been during the last decade -- and stocks did mighty poorly.