| The Questions The American banking crisis may not have a singular cause nor can one action fix the mess this nation faces but the extremely positive effects of regulating the banking industry once again are undeniable. There is a big problem with Ben Bernanke's sly metaphor. "I think it's very important for us to try to put out the fire. I think it's good advice in general, that if there's a fire burning, you try to put it out first, and then you think about the fire code." And that problem is the history of our government. If they do manage to throw enough of our taxpayer dollars to make it appear that the formerly free market banks are functioning again the political will to restore those fire codes will be gone. Since the maturation of lobbyist influence there is no history of our government attempting to fix a big campaign donation sector unless that sector is on fire. It is not that our elected officials are bad people but the history of lobbyist influence is the root of this nation's financial crisis. And because of the fact that our representatives fell over themselves to bailout the banks with taxpayer dollars our own money is now increasing banker influence in Washington. Just like another financial crises issue Fanny May and Freddie Mac, taxpayer dollars have found another way to influence decision making on Capital Hill. There is no doubt that the banks have been winning and the people have been losing for decades and it has served no one but the banking big wigs and the representatives cashing their campaign donations. The shareholders have gotten screwed, the taxpayers are getting the shaft and regulatory improvements are uncertain. Our elected officials won't admit it but their own deregulation has caused pain and suffering throughout the entire world and now it should be the people's turn. Foreign investors upon whom this "too big to fail" nation has grown so dependent are watching in utter disgust. When shareholders see that the bailed out financial industry still paid $18.4 billion in bonuses after a disastrous 2008 they know their money can't be trusted there. With those bankers transforming our tax dollars into bonuses now Democratic representatives including our new president are discussing "fixing" Social Security while offering a stern word or two to the bankers. Can you find any sort of representation in that? Just like the Great Depression this is a crisis of confidence and much of that lost confidence is in our government's ability to fix that which they broke. There is no Franklin D. Roosevelt this time. Unfortunately Barney Frank and Chris Dodd are not on top of this, our media that generates a great deal of income from banks won't present this and not repairing the damages caused by deregulation represents the path of least resistance. The Answers On January 15 an economists' forum named the Group of Thirty released a report called Financial Reform: A Framework for Financial Stability. The report addresses flaws in the global financial system and provides 18 specific recommendations to: improve supervisory systems by redefining the scope, boundaries, and structure of prudential regulation; enhance the role of the central banks; improve governance practices and risk management; address pro-cyclicality via capital and liquidity standards; enhance accounting practices; strengthen the financial infrastructure; and increase coordination internationally. Paul Volcker, the head of President-elect Barack Obama's special economic recovery advisory board was the lead author. "The issue posed by the present crisis is crystal clear," said Volcker. "We [must] restore strong, competitive, innovative financial markets to support global economic growth without once again risking a breakdown in market functioning so severe as to put the world economies at risk." Mr. Jacob Frenkel, another Chairman of the Group of Thirty and a Vice Chairman of of one of the largest corporations that received a government bailout, pointed out that we can't get out of this U.S. government induced mess until investors can believe again. "Financial markets today are fragile and highly vulnerable. These conditions require that policy initiatives must focus on restoring stability and rebuilding confidence in the system as a whole. For confidence to be fully restored, markets must be reassured that there is a coherent agreement on a comprehensive reform of the regulatory and supervisory system. We believe that policymakers must adopt changes that improve prudential regulation and supervision. We must also improve risk management, enhance transparency, strengthen the market infrastructure, and assure a greater degree of international consistency and coordination among regulators and supervisors." Talk about Change We Can Believe in. Reading through the pdf. presentation the recommendations are almost all about government regulation and banking enforcement but the sweeping new regulations cover almost everything. Unlike our politicians the report acknowledged charges that flaws in the U.S. financial system are to blame for starting the current global economic crisis and emphasizes the fact that banks, having become too big to fail, have become a threat to our own national security. The Group of Thirty calls for simplification of banks and restoring the division between banks and brokerage houses just like we had ten years ago. There is a call for higher standards of transparency in both banks and brokerage houses. It calls for something most Americans once thought we had, strict regulation of money market mutual funds. A call for one government agency scrutinizing all capital including money market accounts, mutual funds, even private hedge funds that rely on borrowed capital, financial derivatives, over the counter trades and all of those credit default swaps that are still ticking like a $47 billion time bomb. Close regulation and supervision by one government body of all investments may sound a bit Homeland Securityish but a central agency looking out for systemic risk would put an end to regulators pointing their fingers at other government bodies. This nation regulatory agencies have descended from concrete regulations to a mix between "supervisory guidances" and "sound asleep." The Securities and Exchange Commission has proven to be totally worthless and Barack Obama's choice to clean it up must be a joke. Confidence through subjecting private pools of capital to public scrutiny, paying greater attention to liquidity and risk management practices with executives being forced to produce reliable financial stability reports regularly or "new parameters for a firm's risk tolerance." There is a call for the government to be given a place in the board rooms and they ask for responsible and balanced board membership including an accounting background presence in board rooms. Although there is already a clash in the Obama administration there is a call for common international standards of accounting, a single set of global accounting standards to be administered by the International Accounting Standards Board. Restoration of confidence in rating agencies is also stressed, so companies that declare bankruptcy with an AAA rating will be a thing of the past. Fannie Mae and Freddie Mac should be transformed entirely into government agencies or regulated as independent mortgage brokers to remove government conflicts of interest. Even the two issues that our television news media and many of our elected officials seem to think this crisis of confidence are all about are addressed. The recommendations call for setting guidelines on executive pay and separating hedge funds from clearing houses so there won't be another Bernie Madoff scandal. This may all seem so radical after decades of propaganda from supply side pundits and our our elected officials becoming paid advertisements for the banking industry but it is not. Not too long ago rules for banks watched out for the people. Good Government On June 16, 1933 when President Franklin D. Roosevelt signs the Glass-Steagall Act it ended the banking insanity that was judged to be the primary cause of the Great Depression. It was enacted as an emergency response to the failure of nearly 5,000 banks during the Great Depression. The act was originally part of President FRANKLIN D. ROOSEVELT's NEW DEAL program and became a permanent measure in 1945. It gave tighter regulation of national banks to the Federal Reserve System; prohibited bank sales of SECURITIES; and created the FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC), which insures bank deposits with a pool of money appropriated from banks. On that day in 1933 consumer banks were transformed into unexciting dependable institutions that oversaw the flow of capital for six decades of American growth. Separated from the investment banks that would ride the economic roller coaster through those decades the consumer banks were a rock of solid footing. Strict banking regulations saw this nation emerge from the Great Depression, World War II and the Baby Boom that followed. The nation grew through the Korean conflict, Cold War and the War in Viet Nam with the restricted banks financing the people's needs through it all with hardly a problem. Compared to today these were very good times as far as personal finance was concerned. Enhanced by the solid performance of the banks the politicians continued to show good judgment and solidified the two Glass-Steagall Acts as late as 1956 when the Bank Holding Company Act was passed. The debate that government regulations went too far was not an unsound argument. Banks were judged as a hindrance to American savings. Interest rates were artificially low and the dependable dividends to shareholders were often twice as high as banks highest saving rates. Investors saw no reason that banks should not be allowed to become to big to fail and because of the regulations restricting growth banks also traded at artificially low price to earnings ratios. But while the voice of conventional bankers that wanted the growth (and paychecks) of the investment bankers grew louder,claiming those regulations were "outdated, unfair, and unworkable regulations" our financial system was the envy of the entire world. Bad Government The American financial system is no longer the envy of the entire world. Now the American banking system deserves credit for the global financial meltdown. There is plenty of blame to go around but the history of the Great Depression was repeated by our elected officials in a deregulation orgy. A PBS FrontLine chronology called the long demise of Glass-Steagall describes the unraveling of our once trustworthy banking system. Beginning in the 1960s, banks lobby Congress to allow them to enter the municipal bond market, and a lobbying subculture springs up around Glass-Steagall. Some lobbyists even brag about how the bill put their kids through college. Through the 1970's as investment banks encroached on commercial banks, still more lobbyist put many more kids through college the bankers began chipping away at regulations. The 1980's began with a good president signing the Depository Institutions Deregulation and Monetary Control Act but there was bad on the horizon. The Regan administration set the stage for totally undermining the the safety net signed by Franklin Delano Roosevelt. In December 1986, the Federal Reserve Board, which has regulatory jurisdiction over banking, reinterprets Section 20 of the Glass-Steagall Act, which bars commercial banks from being "engaged principally" in securities business, deciding that banks can have up to 5 percent of gross revenues from investment banking business. The Fed Board then permits Bankers Trust, a commercial bank, to engage in certain commercial paper (unsecured, short-term credit) transactions. In the Bankers Trust decision, the Board concludes that the phrase "engaged principally" in Section 20 allows banks to do a small amount of underwriting, so long as it does not become a large portion of revenue. This is the first time the Fed reinterprets Section 20 to allow some previously prohibited activities. Even in 1987 Paul Volcker got it and everything he suspected proved true. In the spring of 1987, the Federal Reserve Board votes 3-2 in favor of easing regulations under Glass-Steagall Act, overriding the opposition of Chairman Paul Volcker. The vote comes after the Fed Board hears proposals from Citicorp, J.P. Morgan and Bankers Trust advocating the loosening of Glass-Steagall restrictions to allow banks to handle several underwriting businesses, including commercial paper, municipal revenue bonds, and mortgage-backed securities. Thomas Theobald, then vice chairman of Citicorp, argues that three "outside checks" on corporate misbehavior had emerged since 1933: "a very effective" SEC; knowledgeable investors, and "very sophisticated" rating agencies. Volcker is unconvinced, and expresses his fear that lenders will recklessly lower loan standards in pursuit of lucrative securities offerings and market bad loans to the public. For many critics, it boiled down to the issue of two different cultures - a culture of risk which was the securities business, and a culture of protection of deposits which was the culture of banking. 1987 was the same year that a former director of J.P. Morgan Alan Greenspan became the chairman of the Federal Reserve Board but his lust for banking deregulation had only just begun and the Savings and Loan disaster did not have such a disastrous effect on the commercial banks. Consider the last housing crisis that started off in 1987 and in the early 90's did leave the recently deregulated Savings and Loan associations insolvent creating quite a mess in this nation's financial industry. That was not seen as a signpost by our elected officials? 1990 should have been another signpost of disaster but the indications were ignored. Even though commercial banks were only allowed to have ten percent of assets in unsafe waters the junk bond crisis of 1990 did threaten the nation's banking industry, causing insolvency and liquidity problems. It wasn't like there were no signposts yet our elected officials continued down the road to deregulation. On November 12, 1999 banking lobbyist did more than just put their kids through college as our elected officials cashed all of those campaign finance checks from Sanford I. Weill and his kind while guaranteeing the present financial melt down. A lot of blame has sloshed around for the sub-prime meltdown, from greedy borrowers to greedy mortgage brokers to Alan Greenspan, but if you want the real culprit, it was the repeal of the Glass-Stegall Act. On November 12, 1999, the champagne must have been shooting from the walls at Citigroup, which had worked behind the scenes for over 30 years to get the act overturned. After recovering from their hangover, they and their banking buddies went on a sub-prime lending orgy. It was a ten year downside that helped create Bush's false economy and prevented the necessary market correction that should have come after the end of the tech bubble. The banks were free to create a housing bubble. Since turnover in Congress is very slow America are depending on many of the same people to fix this problem of their own creation. An even larger number of these so called representatives are still in office from the days when they were telling Americans that the only problems the banks had was deadbeat consumers. Then the Credit Card Congress offered a "law that was literally written by the credit-card industry" called The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 but they forgot the consumer protection part. It is hard to believe in people who have so few qualms about the corporate kickbacks known as campaign finance in this nation. Those same people who for years have been getting letters from the working poor for years about $45 late fees and $45 over limit fees added to their 30% A.P.R. credit cards but felt no urge to do anything about it. The Present Government Everyone wants to believe that the 111th Congress will be above all that but as the Senate proved last week with foreclosures up 81% for 2008 and actually increasing in December, they still had more TARP money for the supply side and so little for the ailing demand side. There is certainly confidence that Barack Obama will put this TARP money to better use but with everyone asking "What happened to the first $350 billion?" Democrats are saying "We were in a hurry." This time Barney Frank was not in such a big hurry but the Senate crushed oversight of the next infusion of TARP and even thought we have a good president virtual cart blanche is another bad sign. It is good and there is much hope in the fact that Barack Obama has surrounded himself with people like Warren Buffet and Paul Volcker but these Group of Thirty recommendations have to go through the same government that put this nation here in the first place. Back in November when Barack Obama selected one of the most experienced men in the financial world as the Chairman of this new Economic Recovery Advisory Board that will be staffed by people from outside of government the nation and the world was reassured. Now these recommendations are being taken by some as another sign of a promising future. Obama has pledged to present a package of reforms to prevent another round of the financial crisis that began in the United States, ahead of a summit of world leaders in London this April. Observers saw in Thursday's report potential building blocks of Obama's plan. Observers saw in Thursday's report potential building blocks of Obama's plan. Although issued by the Group of 30 -- an organization of international economists and financial policymakers -- its lead author is Paul Volcker, the chairman of the Federal Reserve during the Carter and Reagan administrations who will serve as a special adviser to the Obama White House. Part of Volcker's role is to help mastermind what could become the biggest overhaul of the U.S. financial system in decades. "I think this is a clear sign that the new administration is going to push for a major overhaul, for major structural reforms of the regulatory system," said Steven Schrage, the Scholl Chair in International Business at the Center for Strategic and International Studies. "Having this highly esteemed group backing that proposal is going to put pressure to present those changes before [the] April summit." But and it is a very big but in this campaign finance focused nation. The report's recommendations may find support among those in the United States and Europe who have called for tighter regulation over the financial system in the wake of the current economic crisis. But elements of the plan were already opposed Thursday by some in the financial industry, where some worry that the push for tighter government regulation may go too far. Most newspapers make this framework that seems to be an answer to the gross mismanagement of this nation and the stresses placed on the entire world by the previous leadership sound like a done deal. Bloomberg which explains this regulatory crackdown quite well offered; "The worst Wall Street financial crisis has gone global, and not a regulator worth his salt will back down from tightening up the regulatory regime," Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report was released. "Volcker has Obama's ear and there is no doubt that the U.S. will be on the same page as most of these G-30 recommendations for greater financial- services regulation." But this is a complicated maze and would encounter so much resistance that unless everyone is talking about it the turf battles between different parts of the federal regulatory structures and the herd of cats that represent our interest not to mention the concerted efforts of the banking industry will do exactly what has been done so far. Regulation goes on the back burner and money gets handed out. And of course this is an independent study that is not necessary the opinion of Barack Obama. As pointed out in the report it "does not reflect the official views of those in policymaking positions or in leadership roles in the private sector" and Paul Volcker's own words. Volcker said he would press the new administration to consider the measures, "but it's up to the administration to decide what they want to do." And there are signpost in the Obama administration too. Paul Volcker is not the only man who has Obama's ear. The president-elect's choices for his top economic advisers - Timothy Geithner as Treasury secretary, Lawrence Summers as senior White House economics adviser and Peter Orszag as budget director - are past protégés of Rubin, who held two of those jobs under President Bill Clinton. Even the headhunters for Obama have Rubin ties: Michael Froman, Rubin's chief of staff in the Treasury Department who followed him to Citigroup, and James Rubin, Rubin's son. Remember when Clinton ran on Robert Reich economics but gave the nation Robert Rubin instead? Rubin helped precipitate the Asian financial crisis which has inflicted untold suffering on tens of millions, orchestrated the bailout of foreign bankers and investors in connection with the Mexican and Asian financial disasters, and crafted or helped implement domestic policies that ensured the overwhelming portion of benefits from economic growth would go to the rich -- but none of this managed to sully the reputation of the Secretary Rubin. Rubin never met a deregulation he didn't love and not only did he pave the road to ruin, he still has a high place in Democratic economics even though he brokered himself a deal with the main benefactor of banking deregulation as he pushed it through. Dubbed by Clinton the "greatest secretary of the Treasury since Alexander Hamilton," Rubin left the administration and joined Citigroup, the nation's largest financial conglomerate, whose very existence was made legal by the deregulation measures he had convinced Clinton to accept. According to The Wall Street Journal, Citigroup has so far paid Rubin more than $100 million to serve as chairman of its executive committee, and leaves him free to serve as a key economic adviser to Barack Obama. If Barack Obama does intend to enforce the the advise of Paul Volcker he will face another challenge. These recommendations would be a tough decision for a new president that may cost political capital. The economy of the two banking frontier states, South Dakota and Delaware, would be devastated if national regulations are enforced. Many of these banking and finance schemes created many jobs. With a nation bleeding jobs, a regulated financial industry would be a smaller employer. For instance Paul Volcker's study calls for oversight of those modified derivatives called credit default swaps. These unregulated insurance policies that are the same as taking out insurance on your neighbors house would not be made illegal. But the Group of thirty calls for underwriters to have adequate funds to cover these credit default swaps just like conventional insurance policies. Since the founders of these schemes don't have approximately $47 trillion laying around that market would dry up and all those jobs would be lost. The fact that those credit default swaps can only be estimated to be $47 trillion is testament to how bad our government has become. The government doesn't know what is outstanding and doesn't want to know. What is known is that when Leahman Brothers went from investment grade bonds to bankruptcy overnight ten time the value of Leahman Brothers bonds were outstanding in CDS's. At the time American corporations had about $6 trillion in outstanding debt and there was $58 trillion of Credit Default Swaps being wagered on that debt. It was an insane asylum of legalized gambling and our government still does not care to put a stop to it. with that as an example, the 18 recommendations that would virtually restore the Glass-Stegall Act and address the banking schemes invented since Franklin Delano Roosevelt signed that bill is a very tall order. On Paul Volcker With only a few newspaper stories floating around the supply side economist didn't even have to come out against Paul Volcker but since just about ever newspaper story stresses that Volcker has Obama's ear, they may. At least they will if any of his recommendations are taken seriously. Since there have already been stories about how FDR extended the Great Depression I'm sure the economist on the banking payroll will be claiming the Paul Volcker extended the recession of the 1970's and 80's. Paul Volcker is old school. So old that he spent more of his life in the real banking regulation era as oppose to the bubble era that most of us know. At eighty-one he's been around since before many of today's media economist were born and in his long history where he held far more important jobs than his present one Mr. Volcker earned many decades of praise. About the best assessment I can find of this market icon are his own words in an old speech he made before Bush's eight years of insanity. An excerpt of this speech that was made on January 27, 2000 in Bangkok, Thailand, a country that now seems to have a more stable economy than the United States, points to great strength of character. As one concerned with banking supervision and the structure of financial markets for many years in my own country, I welcome that emphasis. The often expressed concerns about the importance of open and fair business practices, of respect for the rule of law and open competition are at least as relevant. In that connection, I can't refrain from expressing a point that seems to me crucially important for any market-oriented economy. It is a particularly critical point for nations without a long and strong tradition of financial stability. A strong central bank, well insulated from partisan politics, professional in its staffing and fiercely protective of its integrity, is an invaluable national resource. With nationally and internationally recognized leadership and an established record of continuity, a strong central bank will command respect for its policies and enhance confidence in a nation's currency, invaluable assets at a time of crisis. That may seem a rather parochial point by an old central banker. But it is a lesson that has been taken to heart in recent years by most countries, large and small, right around the world. A world of convertible paper currencies, a world that has long since abandoned the discipline of gold, and a world in which money can move so freely, necessarily requires high confidence in its basic monetary institutions. Some feel that a dose of Volcker style sanity may have dashed Jimmy Carter's hopes of reelection but he is a tough minded disciplinarian who has always worked for "responsible budgetary and monetary policies," always worked for financial system based on a stable foundation, stood up against the shadow banking system and commands the respect of both Democrats and Republicans. "Without Paul Volcker's toughness and guts, we may never have broken the grip of rising inflation and declining productivity that plagued the United States during the 1970s," former Securities and Exchange Commission Chairman Arthur Levitt wrote in the foreword of Joseph Treaster's 2004 biography "Paul Volcker: The Making of a Financial Legend." Another glowing review points out; Volcker is the larger-than-life former Federal Reserve chairman who held the post from 1979 to 1987. He crushed inflation in the early 1980s and ushered in two decades of economic prosperity. The Resistance Since the inauguration Mr. Volcker has not seemed larger-than-life. Ever since those 18 serious methods of fixing the financial crisis he has gone pretty unnoticed. No surprise there since the work of this man is the sort of thing our present media and government would have an allergic reaction to. Cynics may refer to it as a case of regulating the barn door after the horse has died but Mr. Volcker's voice of reason should be very reassuring. The only problem is that most cynics did not hear about these recommendations. With almost nobody talking about Paul Volcker there is little hope. The timing of these 18 recommendations could not have been worse. With The Obama Express, the outgoing prez patting himself on the back and the Miracle on the Hudson not even PBS got around to this story in a television dependent nation. CNN and MSNBC doesn't have a clue what news is and even Keith has been busy with other stories. CNBC with all of their banking and brokerage commercials plus their endless line economist that haven't been right yet waiting to offer "We need to be careful about overacting" ignored the story all day. Because it was only seen in a few newspapers Fox News didn't even need to spin the information to protect bankers. Had the recommendations from the Group of 30 made headlines in the financial newspapers and been features on finance channels it would have had the same result as back in November when Barack Obama selected one of the most experienced men in the financial world as the Chairman of the new Economic Recovery Advisory Board, a market rally. The Economic Recovery Advisory Board that will be staffed by people from outside of government reassured the nation and the world. In a capitalist nation where the capital is so messed up this news should have more impact. "But I like to think the crisis is an opportunity," Volcker added. "It's an opportunity to do some things that in ordinary circumstances, in quieter circumstances, would not begin to be possible." Now two weeks have passed and there is still so little information about those 18 recommendations. This week on the Sunday morning news cycle almost ever discussion was about the failing economy. There was some talk of nationalization of banks because of what is going on in Great Britain. There was much talk about federal aid money and how it is being spent. Did you see any serious talk about banking regulation? The Fed is calling for "all available tools" but not that one. A stimulus plan passes the house but when will there be time for reassurance? When regulations do make the news all we hear is nonsense. If these recommendations don't see a great deal of sunshine from the progressive blogs, they may just be dead on arrival. Besides the fact that Helicopter Ben sat before Senate Banking Committee on September 23 to tell Senators that they need to be very respectful of the banks when giving taxpayers money away or the banks might not accept the cash, he should have erased all confidence anybody gave him when he claimed that the Office of the Inspector General at the Federal Reserve was "very effective." A month later Robert Auerbach, a former banking committee investigator pointed out the need for oversight. The billions of dollars taxpayers are paying to bail out banks, especially the trillion-dollar superbank financial holding companies, should not obscure the need to fix underlying and continuing causes of the financial crisis. Under Alan Greenspan's leadership of the Federal Reserve Bank, the nation's central bank, it had a defective bank examination process. ...One root cause of poor regulation of banks by the Federal Reserve is the underlying conflicts of interest at the 12 Federal Reserve Banks. Two-thirds of the board of directors in each of these Fed banks are voted onto the boards by the banks in the district. So the bankers are charged with regulating themselves. After all of this banks are still regulating themselves and with elected officials making suggestions about how the banks should regulate themselves better things don't look good. When the best our new president can do is offer a tongue lashing to those bankers who wrote themselves $18.4 billion in bonuses for 2008 things are looking really bad. But the biggest problem these rules face is lobbyist talking down our representatives so they will say the same thing as people like Scott Talbott and those always wrong economic pundits. Campaign finance is the reason we pay for half the military in the world, the reason we have 49 million Americans without health insurance and the reason many baby boomers who have been saving for a rainy day no longer have a retirement pot to pee in. There will most certainly be some action taken at some point but the service of the American people is doubtful. Making our representatives in both the House and the Senate aware that Americans know about and want these regulations is a worthy effort. A few opinions about the Group of 30's recommendations at Change.gov won't hurt neither. And these regulations getting a whole lot of sunshine here in the blogosphere would be helpful too. The notion that the U.S. government cannot do two things at the same time is false. As they smother this fire in taxpayer money they should be restoring that fire code. For the most part they are not even discussing restoring regulating the hand that feeds them and what seems to be going on is our leadership desperately seeking a new bubble, a new false economy with even less air than that housing bubble we are trying to recover from. "The pervasive and deep-rooted financial crisis has amply demonstrated that our financial system is broken and it requires thorough-going repair."
-Paul Volcker | 
Tell the Senate and President Obama, "No, thank you, to the Nuclear Industry and Coal Industry. We want safe, alternative energy and soon - not later! We want a Stimulus Bill that produces truly green jobs now!" 
OK, so, to make an egregiously long story merely excessively long, a very strange thing happened on the road to the Stimulus Package. As 
Now, it is quite true that some "sexy" rail transport projects really aren't shovel ready. It will take six years to electrify our main freight rail lines and provide 110mph Rapid Passenger Rail to most of the country. Bullet trains in California and the Northeast Corridor (NEC) will take fifteen to twenty years. These require medium to long term plans and funding. 
Some ideas to get the list started:
We are spending $2.4b on the chimera of "clean coal", just to buy protective cover for the real sustainable energy spending ... and there is just $1.1b on regional rail transport. 
