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A project of Common Dreams

For Immediate Release
Contact: Taruna Godric: 416-916 5202 ext 414,Email:,smcommunications@therealnews.,com

Obama Should Save the Banks, Not the Bankers Pt.5

Tom Ferguson: The federal budget must stop being largely a subsidy for the rich


The financial
crisis isn't a result of stagnant wages in relation to productivity in
the US, according to Tom Ferguson, political science professor at
University of Massachusets and

author of Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political System.

"This was a domestically caused crisis and it started, as far as I can tell, in the financial sector," Ferguson said.

It was always apparent that productivity growth was not largely
benefitting the working class, but mainly making the rich more wealthy.
Ferguson believes the economic model must be re-shaped to allow full

question boils down to what can you do about wages?" Ferguson asked.
"The first thing you've got to do is run a fiscal and monetary policy
that will allow you to get to full employment, I also think you've got
to deal with exchange rate misalignment, then I would certainly think
about wage subsidies and above you've got to redo the federal budget."

funding should also be directed to provide adequate social services
like education and health facilities according to Ferguson.

"If you re-did the tax system you would...make the lives of an awful lot of Americans much easier," he said.

Watch the full story:

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