Inequality Against Democracy: 10 Facts About the 1 Percent

Richard Eskow

 

Economic inequality inspired Occupy Wall Street, a movement that in a few short months transformed our political discourse with the concept of the “1 percent” and the “99 percent.” Today the presidential candidacy of Bernie Sanders is altering the political landscape with a call to reduce inequality.

Why does this theme resonate with so many voters? How does it intersect with other issues like social justice, national security and the environment? Is inequality irreversible?

We are living through the greatest “wealth grab” in history. But inequality is not produced by immutable forces. It’s the result of a legislative agenda promoted by the rich and executed by their political allies. The struggle to change this agenda and end inequality is inseparable from the other critical struggles of our time.

What follows are 10 facts about the 1 percent – but they’re not just statistics. They’re a paint-by-numbers picture of an economy, and a democracy, in urgent need of change.

1. Not so long ago, growth and prosperity were more widely shared in this country.

There was a time in living memory when the growth in American productivity was shared much more broadly than it is today.

As economist John Schmitt wrote in 2013, “From the end of World War II through 1968, the wages for workers in the middle, and even the minimum wage, tracked productivity closely.”

This led to the growth of a middle class whose members could meet their own needs, afford some luxuries, and raise and educate their children – often on a single working person’s income.

While many people, especially people of color, were shamefully excluded from this prosperity, the postwar American experience shows us that it is possible to promote broadly shared economic growth.

2. Then something changed.

But then, as Schmitt observes, something changed. Increases in prosperity were no longer being shared in the same way. He writes:

“Between 1979 and 2012, after accounting for inflation, the productivity of the average American worker increased about 85 percent. Over the same period, the inflation-adjusted wage of the median worker rose only about 6 percent, and the value of the minimum wage fell 21 percent. As a country, we got richer, but workers in the middle saw little of the gains, and workers at the bottom actually fell behind.”

If the national minimum wage had kept pace with productivity, says Schmitt, it would have been $22 per hour by 2013.

Instead it’s $7.25 today.

A slightly more conservative calculation from economist Dean Baker said the minimum wage would have been $18.42 per hour in 2015 had it kept pace with productivity. This graph illustrates the broadening of this gap:

3. Most of the nation’s income gains are now going to the top.

On the other end of the spectrum, income gains for the top 1 percent now dwarf those of other households. In 2011 the Congressional Budget Office (CBO) found that “between 1979 and 2007, income grew by: 275 percent for the top 1 percent of households; 65 percent for the next 19 percent; just under 40 percent for the next 60 percent; and 18 percent for the bottom 20 percent.”

And most of the gains since the 2008 economic crisis have gone to the wealthiest among us.

Meanwhile, in what is sometimes called “the middle-class squeeze,” the middle-class cost of living has risen significantly. Even after wages are adjusted for inflation, middle-class income has failed keep up with increases in such costs as child care, higher education, health services, retirement, and housing – expenses that disproportionately affect middle-class households.

4. Wealth inequality has returned to levels not seen since the Roaring ’20s.

Economists Emanuel Saez and Gabriel Zucman found in 2014 that the concentration of wealth held by the top 0.1 percent has reached levels not seen since the 1920s:

Source: Saez and Zucman

Saez and Zucman found that in recent years there has been, as the caption to one chart puts it, “a surge in top wealth shares concentrated in (the) top 0.1 percent.”

5. The 0.01 percent – a tiny group of people – controls a vast amount of wealth.

As a result of this surge, 16,000 Americans hold as much wealth as 80 percent of the nation’s population – some 256,000,000 people – and as much as 75 percent of the entire world’spopulation.

The combined wealth of these 16,000 people is more than $9 trillion.

6. 536 people, $2.6 trillion dollars

A few billionaires are even wealthier. In the United States, 536 people had a shared net worth of $2.6 trillion at the end of 2015. These days even the top 0.01 percent isn’t immune from inequality.

7. CEOs are taking up a bigger piece of the pie, and workers are getting less.

Fortune 500 CEOs earned about 42 times as much on average as the typical worker in 1980. Today they earn 373 times as much.

In fact, seven of this country’s 30 largest corporations paid their CEOs more than they paid in taxes.

8. The average American household is falling behind on wages.

The median household income in the United States fell by more than 7 percent between 1999 and 2014. It’s now slightly over $53,000.

9. The average American owns less wealth than people in many other developed countries.

The median wealth of an American adult is roughly $34,316.

That’s far below that of adults in countries like Japan ($78,862), Luxembourg ($78,453), the United Kingdom ($75,734), Norway ($54,362), the Netherlands ($52,649), Switzerland ($43,700), and Australia ($47,477.)

10. More than one child in five lives in poverty.

The U.S. poverty rate for children is over 20 percent, higher than that of all other major developed countries. The only other nations in the OECD with similarly high rates are Chile, Israel, Mexico, Spain, and Turkey.

By contrast, child poverty is less than 9 percent in the Nordic countries and Austria, and is less than 10 percent in the United Kingdom. Even those rates, which are less than half the American rates, should be considered unacceptable.

Overall, more than 48 million Americans live in poverty.

The Challenge

According to experts like Nobel Prize-winning economist Joseph Stiglitz, the expansion of the financial sector has contributed significantly to the current crisis. So has the lack of jobs and growth in minority communities; lax federal oversight of banks and corporations; the stock market’s focus on short-term gains over long-term growth; the waning influence of labor unions; the offshoring of American jobs; and tax policies which have increasingly favored corporations and ultra-wealthy individuals.

Political choices are shaping a new class of super-wealthy Americans. And, conversely, the super-wealthy are shaping our political choices. A Princeton study by political scientistsMartin Gilens and Benjamin Page concluded that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence.”

A government controlled by wealthy individuals and large corporations will be much more likely to harm the environment and subvert democratic processes. It will cater to the defense industry abroad and the for-profit prison industry at home. It will hamper racial justice, because true equality cannot be achieved without effort and cost. Its policies are likely to foster growing instability at home and abroad, affecting virtually every aspect of foreign and domestic policy.

That is why runaway inequality is the central issue of our time. It stifles democracy and leads to a more dangerous world. We should, of course, demand that political candidates advocate the right social, foreign policy, and environmental decisions. But even the best candidates will find it impossible to consistently carry out the best policies in a society where so few have so much and so many have so little.

Here’s the good news: Today’s inequality was created by choice, which means we can make different choices. We can end the great wealth grab – by strengthening collective bargaining rights, regulating Wall Street and large corporations, fixing our tax system, and renegotiating bad deals like NAFTA while blocking such deals in the future. Ending the great wealth grab will improve life for most Americans, and will make it easier to reclaim our democracy.

It can be done. To say otherwise is to encourage a false cynicism that breeds permanent despair. It’s true that it will take a major political shift, the kind of mass movement Bernie Sanders calls a “political revolution.” But it can be done, once we understand and accept the challenge that lies before us.

None of the post-2008 reforms have “significantly diminished the likelihood of financial crises!

When the ground from under Wall Street opened up in autumn 2008, there was much talk of letting the banks get their just desserts, jailing the “banksters”, and imposing draconian regulation. The newly elected Barack Obama came to power promising banking reform, warning Wall Street, “My administration is the only thing that stands between you and the pitchforks”.

Yet nearly eight years after the outbreak of the global financial crisis, it is evident that those who were responsible for bringing it about have managed to go completely scot-free. Not only that, they have been able to get governments to stick the costs of the crisis and the burden of the recovery on their victims.

How Wall Street Won

How did they succeed? The first line of defence for the banks was to get the government to rescue the banks from the financial mess they had created. The banks flatly refused Washington’s pressure on them to mount a collective defence with their own resources. Using the massive collapse of stock prices triggered by Lehman Brothers going under, finance capital’s representatives were able to blackmail both liberals and the far-right in Congress to approve the US$700 billion Troubled Asset Relief Program (TARP). Nationalization of the banks was dismissed as being inconsistent with “American” values.

Then by engaging in the defensive anti-regulatory war that they had mastered in Congress over decades, the banks were able, in 2009 and 2010, to gut the Dodd-Frank Wall Street Reform and Consumer Protection Act of three key items that were seen as necessary for genuine reform: downsizing the banks; institutionally separating commercial from investment banking; and banning most derivatives and effectively regulating the so-called “shadow banking system” that had brought on the crisis.

They did this by using what Cornelia Woll termed finance capital’s “structural power”. One dimension of this power was the US$344 million the industry spent lobbying the U.S. Congress in the first nine months of 2009, when legislators were taking up financial reform. Senator Chris Dodd, the chairman of the Senate Banking Committee, alone received US$2.8 million in contributions from Wall Street in 2007-2008. But perhaps equally powerful as Wall Street’s entrenched congressional lobby were powerful voices in the new Obama Administration who were sympathetic to the bankers, notably Treasury Secretary Tim Geithner and Council of Economic Advisors’ head Larry Summers, both of whom had served as close associates of Robert Rubin, who had successive incarnations as co-chairman of Goldman Sachs, Bill Clinton’s Treasury chief, and chairman and senior counselor of Citigroup.

Finally, the finance sector succeeded by wielding their ideological power, or perhaps more accurately, hitching their defense to the dominant neoliberal ideology. Wall Street was able to change the narrative about the causes of the financial crisis, throwing the blame entirely on the state.

This is best illustrated in the case of Europe. As in the U.S., the financial crisis in Europe was a supply-driven crisis, as the big European banks sought high-profit, quick-return substitutes for the low returns on investment in industry and agriculture, such as real-estate lending and speculation in financial derivatives, or placed their surplus funds in high-yield bonds sold by governments. Indeed, in their drive to raise more and more profits from lending to governments, local banks, and property developers, Europe’s banks poured US$2.5 trillion into Ireland, Greece, Portugal and Spain.

The result was that Greece’s debt-to-GDP ratio rose to 148 percent in 2010, bringing the country to the brink of a sovereign debt crisis. Focused on protecting the banks, the European authorities’ approach to stabilising Greece’s finances was not to penalise the creditors for irresponsible lending but to get citizens to shoulder all the costs of adjustment.

The changed narrative, focusing on the “profligate state” rather than unregulated private finance as the cause of the financial crisis, quickly made its way to the USA, where it was used not only to derail real banking reform but also to prevent the enactment of an effective stimulus programme in 2010. Christina Romer, the head of Barack Obama’s Council of Economic Advisers, estimated that it would take a US$1.8 trillion to reverse the recession. Obama approved only less than half, or US$787 billion, placating the Republican opposition but preventing an early recovery. Thus the cost of the follies of Wall Street fell not on banks but on ordinary Americans, with the unemployed reaching nearly 10 percent of the workforce in 2011 and youth unemployment reaching over 20 percent.

Big Finance’s Victory in the US and Europe

The triumph of Wall Street in reversing the popular surge against it following the outbreak of the financial crisis was evident in the run-up to the 2016 presidential elections. The U.S. statistics were clear: 95 percent of income gains from 2009 to 2012 went to the top 1 percent; median income was US$4,000 lower in 2014 than in 2000; concentration of financial assets increased after 2009, with the four largest banks owning assets that came to nearly 50 percent of GDP. Yet regulating Wall Street has not been an issue in the Republican primary debates while in the Democratic debates, it was a side issue, despite the efforts of candidate Bernie Sanders to make it the centerpiece.

The political institutions of one of the world’s most advanced liberal democracies were no match for the structural power and ideological resources of the financial establishment. As Cornelia Woll writes, “For the administration and Congress, the main lesson from the financial crisis in 2008 and 2009 was that they had only very limited means to pressure the financial industry into behavior that appeared urgently necessary for the survival of the entire sector and the economy as a whole”.

In Greece, the austerity policies provoked a popular revolt – expressed in the June 2015 referendum on the bailout in which over 60 percent of the Greek people rejected the deal – but in the end their will was trampled on as the German government forced Tsipras into a humiliating surrender. It is clear that the key motives were to save the European financial elite from the consequences of their irresponsible policies, enforcing the iron principle of full debt repayment, and crucifying Greece to dissuade others, such as the Spaniards, Irish, and Portuguese, from revolting against debt slavery. As Karl Otto Pöhl, a former head of Germany’s Bundesbank, admitted some time back, the draconian exercise in Greece was about “protecting German banks, but especially the French banks, from debt write-offs”.

Pyrrhic Victory

Yet, the victory of the banks is likely in the end to be Pyrrhic. The combination of deep austerity-induced recession or stagnation that grips much of Europe and the U.S. and the absence of financial reform is deadly. The resulting prolonged stagnation and the prospect of deflation have discouraged investment in the real economy to expand goods and services.

Meanwhile with the move to re-regulate finance halted, the financial institutions have all the more reason to do what they did prior to 2008 that triggered the current crisis: engage in intense speculative operations designed to make super-profits from the difference between the inflated price of assets and derivatives based on assets and the real value of these assets before the law of gravity causes the inevitable crash.

The non-transparent derivatives market is now estimated to total US$707 trillion, or significantly higher than the US$548 billion in 2008, according to analyst Jenny Walsh. “The market has grown so unfathomably vast, the global economy is at risk of massive damage should even a small percentage of contracts go sour. Its size and potential influence are difficult just to comprehend, let alone assess.” Former U.S. Securities and Exchange Commission Chairman Arthur Levitt, the former chairman of the SEC, agreed, telling one writer that none of the post-2008 reforms has “significantly diminished the likelihood of financial crises”.

The question then is not if another bubble will burst but when.

Winning the Next Round

Then the next question is, will it take this coming crisis to finally achieve what the reaction of the 2008 financial crisis failed to do – place finance capital under restraints? In his classic book The Great Transformation, Karl Polanyi talked about the “double movement” whereby the excesses of capital create a counter-movement among the people, which forces the state to restrain and regulate it.

In this we can learn from Iceland’s unique experience. In October 2015, Iceland’s judicial system sent the heads of the country’s biggest banks to jail, along with 23 of their lieutenants. The sentencing was the culmination of a process in which Iceland took a different course from the U.S. and the rest of Europe. It let the banks go under instead of bailing them out as “too big to fail”. It did engage in bailout operations but these were to rescue ordinary citizens rather than bankers, forgiving mortgage debts that went above 110 percent of the actual value of the home linked to the loan.

The economy of Iceland did not collapse when its biggest banks were allowed to fail. As one article pointed out,

Iceland returned to economic growth much faster than skeptics expected after breaking from the conciliatory approach toward financial industry actors that most countries took in the wake of the global collapse. The tiny economy’s growth rate outpaced the average for European countries in 2012. It halved its unemployment rate since the peak of the crisis.

That the country was able to tame the finance industry was perhaps due to several factors. One was the relatively small scale of its democracy. With a population of only 329,000 people, most of them in the capital city, Reykjavik, Iceland’s elected officials were susceptible to very direct pressure from the electorate, many of whom had suffered massive losses. Another is that with finance having emerged relatively recently as the main driver of the economy, the financial elite had not achieved the massive structural and ideological power that finance capital had achieved in the U.S., the U.K. and the rest of Europe.

Iceland may have been the exception to the rule, but it shows that democratic control of the banks is possible.

To avoid further crises with huge tragic social costs, we have an urgent task to bring finance back under democratic control, to reconfigure society’s relation to finance capital, indeed, to Capital itself.

If it were up to me, I would put in jail every sandal-wearing, scruffy-bearded weirdo who burns the American flag. But I am not king,”Justice Antonin Scalia said.

Paul Morigi/Getty ImagesJustice Antonin Scalia died on Saturday, February 13.

Justice Antonin Scalia, a colorful and by far the most influential member of the Supreme Court’s conservative wing, died on Saturday at a ranch in West Texas. He was 79.

The cause of death was not immediately known. A staunch Catholic, Scalia received last rites from a local priest, according to The New York Times.

Chief Justice John Roberts said in a statement that Scalia’s death is a “great loss to the Court and the country he so loyally served.”

“On behalf of the Court and retired Justices, I am saddened to report that our colleague Justice Antonin Scalia has passed away. He was an extraordinary individual and jurist, admired and treasured by colleagues,” he said.

Speaking from the White House, President Barack Obama remembered Scalia as “larger than life” and “one of the most consequential judges and thinkers to serve on the Supreme Court.”

Obama also said he plans to fill his now-vacant seat.

“I plan to fulfill my constitutional responsibility to nominate a successor in due time,” he said, adding that he expects the Senate to confirm him in due course. He also expressed condolences to Scalia’s wife, Maureen, and surviving family.

The looming nomination and future of the Supreme Court has already raised the stakes of the 2016 presidential election — with leading conservatives in Congress saying that the task should be left up to the next president.

But Scalia’s sudden death also leaves in flux a slate of high-stakes cases the court has already heard or is about to hear — including contentious battles over immigration, affirmative action, abortion and the future of public-sector unions.

Without Scalia’s voice or vote, these deeply politicized cases — expected to be decided along ideological lines — are at risk of resulting in 4-4 ties. That means the decision will leave whatever prior court ruling as the final word and will not create any legal precedent.

BRENDAN SMIALOWSKI/GETTY IMAGES

A candle is seen at the steps of the U.S. Supreme Court on Saturday following the announcement of the death of Justice Antonin Scalia

Scalia had served on the Supreme Court since his 1986 appointment by President Ronald Reagan. At the time of his death, he had been the longest sitting justice on the Supreme Court — which, under the court’s seniority rules, sat him just to the right of Chief Justice Roberts.

Known for his clear, sometimes bombastic prose, he was a leading proponent of “originalism” — the belief that the text of the U.S. Constitution should be interpreted as the founders would have understood the document.

Scalia admitted the method was imperfect, but defended it as better than any alternative method of constitutional interpretation.

“I don’t have to prove that originalism is perfect… It’s not perfect,” he said. “The question is whether it’s better than anything else. And it is.”

Originalism’s imperfections were in full view in 2008’s District of Columbia v. Heller, one of Scalia’s most controversial — and history-making — decisions.

Writing for a five-justice majority, Scalia used historical definitions to argue that the Second Amendment conferred an individual the right to own a handgun for self-defense in the home. It was the first time that the Supreme Court had enshrined such a right in constitutional law — but the ruling threw the law on guns into confusion, and to date the court has refused to clarify it.

As Scalia liked to point out, originalism didn’t always lead him to the result he would have personally preferred. He frequently discussed his vote with a 5-to-4 majority in Texas v. Johnson, in which the court held that flag burning was protected under the First Amendment, as an example of when originalism had led him to a conclusion that was against his personal preferences.

If it were up to me, I would put in jail every sandal-wearing, scruffy-bearded weirdo who burns the American flag.

“If it were up to me, I would put in jail every sandal-wearing, scruffy-bearded weirdo who burns the American flag. But I am not king,” he said.

Scalia’s lesser-known but far more influential legacy on the court and the law is what is now known as textualism — the faithful adherence to what the text of the law, as written by Congress, says. That view led him to really dislike divining congressional intent from committee reports, floor statements and other legislative action that didn’t make it into written legislation.

In a back-and-forth with Sen. Chuck Grassley (R-Iowa) during his 1986 confirmation hearing, Scalia sharply disagreed with Grassley on the importance of committee reports for the interpretation of statutes.

“Senator, Congress does not act in committee reports,” Scalia said. “I will say that flat out. Congress acts by passing a law.”

Today, both liberal and conservative judges and scholars largely agree that is the legislative text that prevails when interpreting statutes, and that secondary materials should be consulted only as a matter of last resort.

When not leaving a mark with his jurisprudence, Scalia left a mark with his scathing, often sarcasm-riddled dissents — protesting vociferously on every major pro-gay rights ruling and the two big challenges to the Affordable Care Act.

Dissenting in last June’s Obergefell v. Hodges, which declared same-sex marriage legal nationwide, Scalia said he’d rather “hide my head in a bag” than join the court’s vapid majority opinion.

“The Supreme Court of the United States has descended from the disciplined legal reasoning of John Marshall and Joseph Story to the mystical aphorisms of the fortune cookie,” he said. That’s only a small sampling of a large oeuvre.

The Supreme Court of the United States has descended from the disciplined legal reasoning of John Marshall and Joseph Story to the mystical aphorisms of the fortune cookie.

He was also extremely close friends with Justice Ruth Bader Ginsburg, one of the court’s most liberal justices. The two shared a love of opera and were even photographed together riding an elephant during a 1994 trip to India.

Scalia didn’t appear to have any plans for retiring from the Court anytime soon, telling The Associated Press in October that he would step down once he felt he no longer could do his job to the best of his ability.

“As soon as I think I’m getting lazier and I just can’t do the job as well, I’m going to get off there. I want to preserve whatever reputation I have,” Scalia said. “If you’ve lost your smarts, yeah, you should get off. But that hasn’t been the case.”

It’s extremely rare for a sitting Supreme Court justice to die while on the bench. Thelast time it happened was in September 2005, when Chief Justice William Rehnquist died.

Born to Italian immigrants in Trenton, New Jersey, in 1936, Scalia received his undergraduate degree from Georgetown University and the University of Fribourg, Switzerland, before earning an LLB degree from Harvard.

Prior to serving on the Supreme Court, Scalia served on the U.S. Court of Appeals for the D.C. Circuit — often seen as the second-most important federal court in the country.

Here’s a Way to Hold Wall Street Accountable

By Margaret Flowers and Jill Stein

r. nial bradshaw / CC-BY-2.0

The year 2016 is off to a rocky start for the stock market, not just in the United States but also globally. Many economists are predicting a financial crash this year or next. Stocks are overvalued without a foundation to hold them up, production is down and debt is high. Central banks, such as the Federal Reserve, have run out of solutions, and investors have run out of confidence in them. The grand illusion of economic recovery is about to be exposed.

Financial fraud is at the heart of the coming crisis. In 2008 when a sector rife with fraud crashed, instead of having to face responsibility the too-big-to-fail banks were bailed out with public dollars. The public, meanwhile, bore the cost not just in dollars but also in lost jobs, lower wages and home foreclosures.

We don’t have to stand by and watch the next crisis, which will hurt millions, unfold. There are steps that should be taken right now by the president to stop financial fraud and stabilize the economy. A new group of financial fraud experts, Bank Whistleblowers United, created a 19-point plan that could be implemented within 60 days, with minimal action by Congress. President Obama could start putting the plan in place now, but so far he has not even prosecuted bank executives responsible for the 2008 crash.

To create a finance system that works for everyone, the next president needs to commit to taking on Wall Street, restoring the rule of law and rooting out corruption. We invite all presidential candidates to join us in endorsing the 19-point plan. And there are additional, essential steps we must take to end Wall Street’s grip on our communities.

In the past 15 years, the U.S. has weathered devastating aftereffects of two financial bubbles: the “dot-com” bubble in the late 1990s, which burst in early 2000, and the housing bubble, which burst in 2008. Many pundits contend that the 2008 financial crisis is over and that we are in recovery, but the reality is that the “recovery” has really been only for those at the top who were bailed out by the Treasury Department and Federal Reserve. Foreclosures and high levels of non-participation in the economy continue, as do underemployment, temporary jobs and wage stagnation.

Half the people in this country have no savings and two-thirds cannot handle an unexpected expense of more than $500, including not being able to borrow what they need from family or friends. The low-wage “recovery” has devastated the middle class, with 51 percent of workers now earning under $30,000 a year. Economist Jack Rasmus describes the current situation:

“The real US economy since 2008 has grown at only roughly half to two-thirds its normal rate. Decent-paying jobs in manufacturing and construction today are still a million short of 2007 levels. Median wages for non-managers are still below what they were in 2007, and households are piling on new debt again to pay for rising medical costs, rents, autos, and education. Retail sales are slowing.”

In fact, major retail chains in the U.S. are planning to close hundreds of stores this year, and many that stay open are carrying low inventories of goods.

Part of the reason for the “recovery” was a massive buyback of bonds and toxic derivatives that were based on risky mortgages that brought on the crash. This was done in the form of “quantitative easing,” through which the Federal Reserve bought up tens of billions of bonds and bad bank debt each month for a total of $3.5 trillion. A2011 audit of the Federal Reserve found that $16 trillion had been allocated to banks and corporations for “financial assistance” after the 2008 collapse. As a result, the Fed is currently leveraged 77 to 1—more than double what Lehman Brothers was when it failed in 2008.

According to Rasmus, this massive infusion of liquidity has created a new set of corporate and government bond bubbles. Additionally, the “leveraged loans and debt markets are now helping to fuel a record boom in mergers and acquisitions.” And “retail investors are over-exposed as they desperately search for … higher returns on increasingly risky investments” in exchange-traded funds (ETFs).”

Instability is compounded by other problems. Stocks are overvalued and are starting to “correct”—or represent their actual worth—and manufacturing is falling because there is an excess of goods. Commodities are also falling, especially oil.

All of this is causing global financial instability so that the economy is bouncing along the bottom. At some point there will be a trigger and the global economy will crash, perhaps worse than what we have experienced before. This time around, the central banks around the world that are trying to prop up economies are running out of tricks.

How did we get into this mess? If you’ve seen “The Big Short,” you have a sense of the extent of the breadth and depth of the fraud and corruption that lie at the heart of Big Finance.

Bill Black, an associate professor of economics and law at the University of Missouri, Kansas City, and a financial fraud expert, says that “fraud is “pervasive” among “most elite financial institutions.”

The reality is that there are no ethics on Wall Street. Everyone is playing against each other and using whatever tools there are—even some they do not fully understand—to make money without regard to the impact they will have on others. It is an “As long as I get mine, then screw the rest” mentality. This mentality has been enabled over the past decade or so by the lack of meaningful oversight. Basically, this behavior occurs because those involved are getting away with it and raking in millions, if not billions, of dollars as their reward. If fraud creates wealth, people will engage in it until they are stopped.

During the savings and loan debacle in the late 1980s, Black oversaw the re-regulation of the industry. He reports that the savings and loan crisis was 1/160th the size of the 2008 financial crisis, yet it led to 30,000 criminal probes, which in turn led to 1,000 felony convictions. In the 2008 crisis, no top-level bank executive has been held accountable for the widespread fraud.

According to Black, “The three epidemics that drove the [2008] crisis are appraisal fraud, ‘liar’s’ loans (collectively, these were the loan origination frauds), and the resale of those fraudulently originated mortgages through fraudulent ‘reps and warranties’ to the secondary market and the public.” In liar’s loans, the bank agrees not to verify important information, such as income of the borrower.

Contrast this with the response to the 2008 financial crisis in Iceland. There they prosecuted the heads of the banks, sending 29 to jail, and let the big banks fail and nationalized them without taking on their outstanding debt. Iceland also maintained its social safety net, unlike the United States, by rejecting austerity measures. The result is that today Iceland’s economy is stable.

If the U.S. had followed a similar path out of its crisis, we would probably be in a better situation than we are today. It’s not too late to take action.

Bill Black recently co-founded Bank Whistleblowers United (BWU) with three other whistleblowers. Their biographies are impressive. Gary Aguirre, a lawyer, is a Securities and Exchange Commission whistleblower. Richard Bowen, a Citigroup whistleblower, has 35 years of banking experience. And Michael Winston blew the whistle on Countrywide Financial’s liar’s loans.

The founders of BWU created a 19-step plan that a president could implement within a minimum of 60 days, without much action by Congress, to rein in the corruption on Wall Street and immediately shrink the big banks. They are currently reaching out to President Obama and all of the presidential candidates, looking for someone who has the courage and integrity to implement the plan.

At its foundation, the plan uses existing law to go after top executives, the “lions,” rather than chasing the “mice,” largely those at the bottom who were following instructions from the higher-ups or were victims of fraud themselves. It also strives to end industry influence over regulatory agencies and to end the revolving door between industry and government. It sets limits on the risk that financial institutions can carry, which would cause them to downsize. And it rewards whistleblowers (not monetarily) for their honesty in calling attention to corruption in the system in hopes of inspiring others to come forth. The full plan and an explanation of it can be viewed on their website, New Economic Perspectives.

In addition to holding the lions of Wall Street accountable, BWU founders hope that acting on their plan now would mitigate damage from the coming economic crash. Financial executives would be much less likely to engage in risky and fraudulent behavior if they knew they would be held personally responsible. And banks would scale back if they were forced to respect minimum capital requirements.

The alternative—not taking action now—evokes a frightening scenario. As Ellen Brown writes in “A Crisis Worse Than ISIS? Bank Bail-Ins Begin,” in the next crisis, too-big-to-fail banks will not be bailed out again by the public. Instead, under the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law in 2010, the big banks were required to develop a plan for what they will do if they become insolvent. Their solution, as we witnessed in Cyprus, is to use a “bail-in”—essentially, converting deposits into bank stock.

Brown explains that “the goal of the bail-in scheme is to place losses on private creditors. Alternatives that allow them to escape could soon be blocked.” This is already happening outside the U.S. in the form of negative interest rates and steps being taken to move to a cashless society. Negative interest rates mean that instead of paying interest on deposits, the bank charges interest to hold the funds. If that is combined at the depositor level with a ban on cash transactions in favor of digital, most of us would be forced to keep our money in banks where it could be subject to negative interest rates and fees and could become altogether worthless in a crash.

So far, negative interest rates are being imposed by central banks in Japan and the European Union on commercial banks, but there is no guarantee that negative interest rates won’t trickle down in some way, overtly or through fees, to depositors. Most banks are reluctant to do this out of concern that people will switch banks. Onefinancial institution in Switzerland has started to use negative interest with large depositors.

There are signs that negative interest rates could spread to the United States. On Thursday, Janet Yellen, head of the Federal Reserve, told the Senate Banking Committee that her agency is studying negative interest rates again in case they become necessary. And recently there have been murmurs of large financial institutions urging a move to a cashless society.

As late-stage capitalism rears its ugly and predatory head, we have a narrowing opportunity to tame, and hopefully defeat, the beast. Money is an institution that can be used for public good or as a weapon to drive widening wealth inequality. It’s up to us as a society to decide.

We can bail out the people through bottom-up approaches such as a basic universal income, which would immediately eliminate poverty. We can invest in local solidarity economies. We can create public banks at the municipal, county and state level to fund infrastructure projects and local needs, and postal banks to provide services to the unbanked, who make up nearly 30 percent of the population. We can even rein in Wall Street and end the culture of corruption.

These solutions and others are already being put into place. The city of Utrecht in the Netherlands is experimenting with a basic income. Latin American countries such asBrazil and cities in the U.S. including New York are building solidarity economies that promote worker-owned cooperatives and other forms of community wealth-building entities. Public banks are common in other countries, and movements for public andpostal banks in the U.S. are gaining ground. North Dakota has had a public bank for nearly 100 years.

It’s up to us to be aware that these solutions exist and take action collectively to demand that they be enacted. This begins by asking the basic question: Will we continue to allow the financial elites to control the global financial system and extract wealth from us and our communities, or will we take control collectively and democratically to create economic institutions that serve everyone?

If you believe, as we do, that Wall Street’s looting and plundering should end and money should serve the public interest, then we urge you to raise awareness of the BWU’s 19-step plan. And we urge you to find out what you can do in your community to take back control of money from Wall Street. In addition to the sources cited above, we recommend the Democracy Collaborative as another resource for information on how to do that.

A different world is possible.

Margaret Flowers, M.D., is a Maryland pediatrician seeking the Green Party nomination for a U.S. Senate seat. She is co-director of PopularResistance.org and a board adviser to Physicians for a National Health Program and is on the leadership council of the Maryland Health Care Is a Human Right campaign. Read her endorsement of the Bank Whistleblowers United plan here.

Jill Stein, M.D., is a Massachusetts internist seeking the Green Party nomination for the presidency. She was the party’s 2012 presidential nominee. She is an internationally known public health advocate and a former co-chair of her state’s Green Party. Read her endorsement of the Bank Whistleblowers United plan here.

The Sad State Of The GOP – Seriously, this is insane. The GOP is destroying itself

    Jeb Bush and Donald Trump at the Republican debate in South Carolina. (CBS)

Speaking only hours after Supreme Court Justice Antonin Scalia’s death, Jeb Bush, Donald Trump and the other candidates began Saturday night’s debate by declaring the 2016 presidential election an opportunity to either cement or lose the Supreme Court’s conservative majority.

Some of the last fireworks of the night came when Cruz attacked Trump’s supposedly “very, very liberal” policies.

“Flexibility is a good thing, but you shouldn’t be flexible on core principles,” Cruz said. “I like Donald. He is an amazing entertainer. But his policies for most of his life … have been very, very liberal.”

Cruz continued:

For most of his life, he has described himself as very pro-choice and as a supporter of partial-birth abortion. Right now today as a candidate, he supports federal taxpayer funding for Planned Parenthood. I disagree with him on that.

“You are the single biggest liar,” Trump shot back. “You probably are worse than Jeb Bush. … This guy lied about Ben Carson when he took votes away from Ben Carson in Iowa and he just continues.”

Trump also accused the Cruz campaign of running robo-calls saying that Trump was not going to run in the South Carolina primary:

Today, we had robo-calls saying, “Donald Trump is not going to run in South Carolina,” where I’m leading by a lot. … “Vote for Ted Cruz.” This is the same thing he did to Ben Carson. This guy will say anything. Nasty guy. Now I know why he doesn’t have one endorsement from any of his colleagues.

Moderator John Dickerson cut in and told Cruz to “just pick from the buffet there” in order to issue his response to the attacks.

“I will say it is fairly remarkable to see Donald defending Ben after he called him pathological and compared him to a child molester, both of which were offensive and wrong,” Cruz replied.

REUTERS/Jonathan ErnstTrump and Rubio.

Cruz continued by saying that Trump “didn’t disagree with the substance that he supported taxpayer funding for Planned Parenthood.”

“Donald has this weird pattern,” Cruz added. “When you point to his own record, he screams, ‘Liar, liar, liar.'”

Trump started shouting over him, saying, “Where did I support it? Where did I support it?”

After some more back and forth over Planned Parenthood, Cruz said that if Trump were president, the Second Amendment would “go away” and that Trump would appoint liberals to the Supreme Court. The attack came hours after Justice Antonin Scalia’s sudden death earlier in the day.

As Trump and Cruz kept going at it, Carson cut in and said, “My name was mentioned twice.” Carson indicated that he wanted to respond. Bush also cut in and noted that Trump had called him a “liar,” but Dickerson wanted to move on.

“We’re in danger of driving this into the dirt,” Dickerson said.

He was too late. He invited Rubio to jump in, but Bush kept talking.

“He also denigrated one of my heroes, Ronald Reagan,” Bush said.

Dickerson went back to Cruz, who fired back at Trump for highlighting Cruz’s past support for Chief Justice John Roberts. Trump pointed out that Roberts had a decisive role in the two rulings upholding the constitutionality of crucial parts of Obamacare.

“I did not nominate John Roberts,” Cruz said. “I would not have nominated John Roberts.”

“You pushed him. You pushed him,” Trump said. “You worked with him and you pushed him.”

Trump and Cruz kept shouting over each other.

“Donald, Donald, Donald, adults learn not to interrupt each other,” Cruz said.

“Why do you lie?” Trump asked, adding sarcastically: “Yeah, yeah, I know. You’re an adult.”

AP Photo/John Bazemore

Earlier in the debate, Trump and Cruz went back and forth in a wild exchange that had Trump questioning the judgment of former President George W. Bush, Jeb Bush’s brother, in the aftermath of the September 11, 2001, terror attacks.

“Obviously the war in Iraq was a big, fat mistake,” Trump said. He then attacked Jeb Bush for waffling earlier in the campaign on whether the war was a mistake.

“It took him five days before his people told him what to say, and ultimately he said it was a mistake,” Trump said.

Jeb Bush said that he was “sick and tired” of President Barack Obama blaming his brother for problems within his own administration.

Bush continued:

I could care less about the insults that Donald Trump gives to me. It’s blood sport for him, he enjoys it, and I’m glad he’s happy about it. But I am sick and tired, I am sick and tired of him going after my family. My dad [former President George H. W. Bush] is the greatest man alive in my mind. While Donald Trump was building a reality TV show, my brother was building a security apparatus to keep us safe. And I’m proud of what he did.

“The World Trade Center came down during your brother’s reign,” Trump retorted. “Remember that.”

The crowd booed loudly.