Alternative Trickle-up Plans Beyond Paulson, September 2008

Hazel Henderson,
September 2008

On balance, it may be a good thing that Paulson’s $700 billion TARP plan was voted down. Prospects of a rich pot of tax dollars to bail out bad mortgages may actually have slowed banks’ necessary process of de-leveraging.

New proposals that can and should now be implemented immediately include:

  • Raise the FDIC’s guaranty of all insured banks’ depositors from $100,000 (now inadequate due to past inflation) to $500,000 for each individual account and $1 million for each corporate account – while beefing up the FDIC’s fund by $200 billion.
  • Making all regulated money market funds permanently insured beyond the $50 billion guarantee enacted through the Emergency Stabilization Fund.
  • Support the SEC and the FASB’s new guidance rules allowing “significant judgment” on “fair value” modification of the “mark to market” rules, while providing greater transparency.
  • Strengthen SEC oversight of credit derivatives, swaps, etc. and create a well-regulated, transparent clearinghouse and market for all such derivatives.
  • Bring back the uptick rule and regulate short-selling. Prosecute naked shorting and other such criminal activities.

All these proposals, coming from many experts from across the political and ideological spectrum can be implemented without congressional legislation.

Longer-term, Congress can, for a start:

  • Re-create an updated Home Owners Loan Corporation (HOLC) from the 1930s.
  • Re-instate the very small tax on stock transactions of .25% as in the Securities Turnover Excise Tax enacted in 1914 and repealed in 1966. Many other countries in Europe and Asia levy such a tax, which curbs speculation and would bring in the USA some $150 billion per year.
  • Pass the extension of Production Tax Credits for renewable energy and add $150 billion to develop solar, wind, geothermal and upgrade our electric grid.
  • Invest in restoring and maintaining US infrastructure.
  • Re-instate federal revenue sharing with states.
  • Extend unemployment insurance to laid off employees!


Shiller, Robert J. The Subprime Solution, Princeton University Press, 2008.

Sirota, David, author of The Uprising. Campaign for America’s Future,


Hazel Henderson is author of Ethical Markets: Growing the Green Economy (2007). is president of Ethical Markets Media LLC, USA, and co-creator of the Calvert Henderson Quality of Life Indicators regularly updated at