Obama and Biden unveil bold and significant gun control reform proposals

If they can get it through Congress, this would be a ban with teeth.

“If there is even one step we can take to save another child, or another parent, or another town, from the grief that has visited Tucson, and Aurora, and Oak Creek, and Newtown, and communities from Columbine to Blacksburg before that — then surely we have an obligation to try.” That was the pledge made by Barack Obama on16 December, at a prayer vigil in Newtown, Connecticut. Yesterday, he followed through on the promises he made that day. Taking the podium along with Vice-President Joe Biden, he announced sweeping executive orders and crucial legislative proposals designed to ensure that America will no longer have to witness the horror of mass shootings again on such a terrible, relentless, regular basis.

“No one can know for certain if this senseless act could have been prevented,” said Biden, introducing the President, “but we all know we have a moral obligation — a moral obligation — to do everything in our power to diminish the prospect that something like this could happen again.” It looks as though he meant it.

Then Obama took the stage. Pointing out that more than 900 Americans have been killed by gun violence since Sandy Hook, Obama read from a series of letters from schoolchildren he received in the aftermath, saying: “These are our kids. This is what they’re thinking about. And so what we should be thinking about is our responsibility to care for them, and shield them from harm.”

His speech included the signing of 23 executive orders that give sweeping new powers to those working in law enforcement and mental health care; aim to enforce and vastly strengthen the background-check system; and the Attorney General will review the categories of people who aren't allowed guns, review safety standards on gun-safes and locks, provide training for first responders and school officials in how to deal with school shootings, strengthen mental health care's ability to provide the care needed, as well as its ability to flag up cases where it sees danger, and several that aimed to take real steps towards a national dialogue on guns in the US, including mandating research into the causes of violence.

But the biggest announcements today, and they are huge, were the two policy proposals that every parent, every reasonable man, woman and child had been hoping to hear: the introduction of a general background check for anyone purchasing a gun, and a real ban on military-style assault weapons and high-capacity magazines, a ban with the teeth required to prevent arms manufacturers from just circumventing it the way they did last time.

The next battle, therefore, will be in Congress. Obama has made it very clear that he is going all-out on this policy, though he warned that it wouldn't be easy. He is right; the battle will be hard-fought. The power of the pro-gun lobby and the NRA over a large swath of congress is incredible — 213 members of the House of Representatives received NRA campaign donations last year — but it is waning.

At each new legislative announcement, the assault weapon ban and the background check, Obama said “the majority of Americans agree with me on this” — a message to congressmen and woman from both sides of the aisle; effectively, saying in the clearest possible terms that he is speaking with the vox populi today: "defy me — and them — at your peril", he seemed to say.

That means that if this legislation ever had a chance of passing, that chance is now. A Washington Post/ABC News poll released this week shows that more than 50 per cent of those polled said that the Sandy Hook shooting had made them “more supportive” of gun control legislation, while 58 per cent now say they support the reintroduction of the ban on assault weapons. Obama and Biden are betting that, while a majority of the Republican-controlled House of Representatives oppose the ban, they will be reluctant to be seen opposing it in the face of overwhelming national support. The President will have the support of the Democratic-controlled Senate, too.

“I have no illusions about what we’re up against or how hard the task is in front of us,” said Biden. “But I also have never seen the nation’s conscience so shaken by what happened at Sandy Hook. The world has changed, and it’s demanding action.” To a very great extent, it needs to be pointed out, this was Joe Biden's day as much as Obama's — it was he who was given the wide-ranging brief to come up with solutions; in 33 days he took more than 229 meeetings and has been prepping Congress for the coming storm. These proposals were based on his hard work.

Now it is Obama's turn to lead the fight; he must steer Congress into supporting the legislation, and make sure the national momentum is not lost in doing so. The congressional GOP has proved itself cowardly, and likely will dig its heels in, so the President must do everything he can to bully, cajole, persuade and shame them into making this legislation law. From his speech today, it sounds like he's ready.

The full text of his plan is available here (pdf). You can also watch the video of the announcement below:

Biden and Obama during the press conference at the White House. Photograph: Getty Images

Nicky Woolf is a writer for the Guardian based in the US. He tweets @NickyWoolf.

Ralph Orlowski / Getty
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Labour's investment bank plan could help fix our damaging financial system

The UK should learn from the success of a similar project in Germany.

Labour’s election manifesto has proved controversial, with the Tories and the right-wing media claiming it would take us back to the 1970s. But it contains at least one excellent idea which is certainly not out-dated and which would in fact help to address a key problem in our post-financial-crisis world.

Even setting aside the damage wrought by the 2008 crash, it’s clear the UK’s financial sector is not serving the real economy. The New Economics Foundation recently revealed that fewer than 10% of the total stock of UK bank loans are to non-financial and non-real estate businesses. The majority of their lending goes to other financial sector firms, insurance and pension funds, consumer finance, and commercial real estate.

Labour’s proposed UK Investment Bank would be a welcome antidote to a financial system that is too often damaging or simply useless. There are many successful examples of public development banks in the world’s fastest-growing economies, such as China and Korea. However, the UK can look closer to home for a suitable model: the KfW in Germany (not exactly a country known for ‘disastrous socialist policies’). With assets of over 500bn, the KfW is the world’s largest state-owned development bank when its size is measured as a percentage of GDP, and it is an institution from which the UK can draw much-needed lessons if it wishes to create a financial system more beneficial to the real economy.

Where does the money come from? Although KfW’s initial paid-up capital stems purely from public sources, it currently funds itself mainly through borrowing cheaply on the international capital markets with a federal government guarantee,  AA+ rating, and safe haven status for its public securities. With its own high ratings, the UK could easily follow this model, allowing its bank to borrow very cheaply. These activities would not add to the long-run public debt either: by definition an investment bank would invest in projects that would stimulate growth.

Aside from the obviously countercyclical role KfW played during the financial crisis, ramping up total business volume by over 40 per cent between 2007 and 2011 while UK banks became risk averse and caused a credit crunch, it also plays an important part in financing key sectors of the real economy that would otherwise have trouble accessing funds. This includes investment in research and innovation, and special programs for SMEs. Thanks to KfW, as well as an extensive network of regional and savings banks, fewer German SMEs report access to finance as a major problem than in comparator Euro area countries.

The Conservatives have talked a great deal about the need to rebalance the UK economy towards manufacturing. However, a real industrial policy needs more than just empty rhetoric: it needs finance. The KfW has historically played an important role in promoting German manufacturing, both at home and abroad, and to this day continues to provide finance to encourage the export of high-value-added German products

KfW works by on-lending most of its funds through the private banking system. This means that far from being the equivalent of a nationalisation, a public development bank can coexist without competing with the rest of the financial system. Like the UK, Germany has its share of large investment banks, some of which have caused massive instabilities. It is important to note that the establishment of a public bank would not have a negative effect on existing private banks, because in the short term, the UK will remain heavily dependent on financial services.

The main problem with Labour’s proposal is therefore not that too much of the financial sector will be publicly owned, but too little. Its proposed lending volume of £250bn over 10 years is small compared to the KfW’s total financing commitments of  750 billion over the past 10 years. Although the proposal is better than nothing, in order to be effective a public development bank will need to have sufficient scale.

Finally, although Brexit might make it marginally easier to establish the UK Investment Bank, because the country would no longer be constrained by EU State Aid Rules or the Maastricht criteria, it is worth remembering that KfW’s sizeable range of activities is perfectly legal under current EU rules.

So Europe cannot be blamed for holding back UK financial sector reform to date - the problem is simply a lack of political will in the current government. And with even key architects of 1980s financial liberalisation, such as the IMF and the economist Jeffrey Sachs, rethinking the role of the financial sector, isn’t it time Britain did the same?

Dr Natalya Naqvi is a research fellow at University College and the Blavatnik School of Government, University of Oxford, where she focuses on the role of the state and the financial sector in economic development

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