Third Party & Independents Archives

Makes A Populist Want To Cry!

One year after the failure of Leman Brothers, President Obama unveiled his administrations plan for a 21st century regulatory system. President Obama cited a four part plan: (1) establish a Consumer Protection Agency that would have oversight authority for the various regulatory agencies, (2) stop firms from shopping around for the regulatory agency that best meets their goal, (3) manage too big to fail institutions through regulation that would require a collection of like institutions bail out a failing institution, and, (4) have people take more responsibility for their actions, alluding to pay for performance as opposed to receiving big bonuses for driving a company into failure.


The 9/11 incident gave the government leeway to grow the government by putting another layer of bureaucracy over the intelligence agencies, in the name of Homeland Security. Also, the government was able to start two wars, still ongoing and both lasting longer than WWII. This latest recession, brought about by the government though appeal of depression era regulations, gives the government the nod to further increase the size of government by adding another agency. In thinking back a few years you may recall that the Islamic militants were blowing up US Embassies around the world. It took the State Dept. a good ten years to figure out they might should beef up security at those locations. I don’t recall any government official accepting accountability for that lack of intuition. I recall people musing about ‘we are just buying time, when will they attack the US”. Then we had the first bombing of the Trade Center, which, one would think, would have been a heads up for the government. Later, came the 9/11 incident, with the government unwittingly facilitating the militants, in every way possible except for flying the planes for the militants. Each had visas and several had drivers licenses, some from multiple states. To this day, no government official has accepted responsibility for any of this. Instead of reacting to the actions of a dozen or so militants by tightening up internal security and securing our borders, which has not been done, the government chose to go to war in two countries. IMO, the Iraq war was started specifically to acquire oil contracts. The bottom line is, the taxpayer paid the bill and the government has accepted no responsibility.

Now we have this recession, brought on largely through deregulation by government officials. Brought on by a government regulatory system saying ‘trust me’ to the unwitting homebuyer. And, the government acted, as one would expect based on history. The government chose bailouts and recovery spending, indebting US citizens for generations to come. Not done yet, government is using the recession to add yet another layer of bureaucracy on to an ever-burgeoning Corpocracy. And, of course, it is the taxpayer who will pay to have corporations and institutions regulated. This, when a half dozen sentences could be added to the regulatory policy of three or four existing regulatory organizations. For example, the credit card and financial industry would get a sentence to the effect “no loan shall be made exceeding a 10% finance charge”, and the SEC would get a sentence to the effect that “crude oil is not a commodity like corn and can’t be traded in hedge fund markets”. Should we hold Phil Gramm accountable for his part in the 2002 Commodities Futures Modernization Act? Anybody? Of course not, but do put all the risk on the taxpayer.

Well, I believe that addresses my opinion on number one. Best not belabor two, three or four or the servers want be able to hold it. Interesting that President Obama stressed he is a great proponent of free trade and looks forward to enacting more trade agreements. That means compliance with the WTO. That means transitioning from USDA subsidies and giving up all forms of protectionism such as ‘Buy America’. In the meantime, Brazil just won a case through the WTO for $300 million against the US for subsidizing cotton. The entire sanctions will amount to something like $800 million of your tax dollars. Do remember that your tax dollars paid for the original cotton subsidy as well. Emboldened, Brazil plans to go after US tariffs set to protect the US ethanol manufacturers. Recently, President Obama has stated he has the legal wherewithall to put a 60% tariff on Chinese manufactured tires. Today, in response, China has filed a complaint with the WTO. Where will it all go? Not sure. But, with this governments trade policies resulting in the greatest transfer of wealth in the history of mankind and with China buying our recession debt we now owe China and the oil patch trillions of dollars and you can bet, the US government will accept no accountability and the taxpayer will continue to get the bill.

Otherwise, we have the Corpocracy we deserve!

Posted by Roy Ellis at September 14, 2009 4:28 PM
Comments
Comment #288080

Roy, your lay person perspective on regulation is defensible as a voter. But, from a legal perspective, entirely and woefully inadequate.

One sentence to limit interest to 10% ? That is very legally naive. There are a host of different kinds of defacto interests which finance companies collect, and most of them are not even labeled interest, such as annual fees.

Simple leaves grand canyons open for the irresponsible and criminal to drive trucks through. Which is why law is so voluminous and legal education so expensive.

As for the current slate of legislation to enforce regulation and oversight, it is largely all good and deserved in my opinion. My major disagreement is with Barney Franks proposal to substitute industry absorption of failed institutions as in lieu of enforcing anti-trust regulations and modifying it to force the break up of any and all financial institutions whose bankruptcy would pose a threat to the economic well-being of the nation.

Frank’s idea would be an appropriate adjunct to break-up, but, alone, only represents the potential of some financial institutions becoming too big to fail by absorbing another failed institution, as I understand it.

Posted by: David R. Remer at September 14, 2009 6:32 PM
Comment #288084

Yes, I failed to note that anti-trust was not mentioned in his speech. Its clear the Corpocracy wants to keep leveraging them up to conglomerate status, maybe for international competition in a global economy. With the broken government we now have the last thing needed is another nonfunctional government agency.
And, his statements on trade are bewildering. He is for free trade and wants more trade agreements but talks of putting up trade tariffs against China, of all countries. China has a couple of T in sovereign funds just waiting for the green light to buy us lock stock and barrel and they own a couple of T of our debt. Leaves me scratching all reachable body parts simo.

Posted by: roy Ellis at September 14, 2009 8:12 PM
Comment #288085

There are a lot of issues tossed into this salad of things that “make a populist cry” that don’t really connect with each other, at least not clearly. Connecting 9-11 with Obama’s trade proposals, and further connecting both with regulation of the banks, would require quite a lot more than what’s given here, which is not to say that it couldn’t be done. Just that it hasn’t.

The 9/11 incident gave the government leeway to grow the government by putting another layer of bureaucracy over the intelligence agencies, in the name of Homeland Security.

So is this an argument for or against putting another layer of bureaucracy and regulation over the financial system? How does pointing to this example reinforce your point?

What’s more, one of the 9-11 Commission’s chief findings was that there was TOO MUCH bureaucracy and a lack of inter-agency communication, both of which led to slowness is connecting the dots and then responding to the incipient threat. Establishing the Department of Homeland Security was supposed to streamline things by putting different agencies under one umbrella and getting them to share resources—to break down the famous “firewall” that existed between them.

So if what was intended hasn’t happen, what warning does that give us about what the government accomplishes when it tries to create “21st century” solutions by increasing and consolidating its power? Makes you wonder. Doesn’t it?

Posted by: Paul at September 14, 2009 8:13 PM
Comment #288087

Roy,
Although I can understand your concerns, I do believe that most Americans missed the point of the Presidents’ Speech. For why it will take time for any acrion out of Congress, I thought it was a shot at the intellect of Wall Street and Consumers that they can bring about more change in a matters of days than our elected officials can in the next 10 years.

For why the banks and others believe they are to big to fail, they are not to big to loss enough business that forces their doors to close. The question is do We, as Americans have enough political will to take the matter in our own hamds. Since, no Corporation can afford to lose half of their Investors and Consumer base and still remain profitable.

Hence, which group is going to make the list of Businesses to big to fail and call for their willfull dismantling through the Natural Course of Economic Events?

Posted by: Henry Schlatman at September 14, 2009 9:13 PM
Comment #288088

Paul, I was trying to say that the Corpocracy is looking for any incident that will give them a segway to more power and control placed in the Corpocracy and that the taxpayer gets stuck with the bill in every instance. I don’t portend to be a writer or a politician, but until someons oomes along that can write and stand up for a 3rd party with a different political attitude I’ll keep rattling along.
Henry, the people have a hard time deciding which duopoly candidate to vote for. Should we expect them to be able to discern the good from the bad among 5000 or so companies? No. They will just sit and wait to see what the next great thing the corpocracy can come up with. They won’t have long to wait.

Posted by: Roy Ellis at September 14, 2009 9:53 PM
Comment #288093

Roy, it appears to me that you’re talking about this “Corpocracy” in the same way people used to talk about the Illuminati, as if corporations taken together make up some kind of monolithic group who hide in the shadows and control everything for some kind of insidious purpose.

It’s way more complicated than that. First of all, corporations cannot be so simplistically opposed to the “taxpayer,” who you see them as victimizing. Not only because they are taxpayers themselves but because taxpayers work for corporations, depend on products and services produced by corporations, and in general have their own interests inextricably tied up with the interests of corporations. Corporations do more than just exert power and control over our lives (although they do way too much of that). They also make our lives and our life-styles possible.

Even a public school teacher, a fireman, or a social worker will have a retirement account with funds invested in the stock market, and when the “corpocracy” looks after its own bottom line, it’s also looking after the bottom line for a whole lot of little guys.

I’m not saying that you don’t realize this, and nobody likes to see undue influence peddling and corrruption (which is a serious problem in our politics), but none of this is as simple as good guys on one side and bad guys on the other, which means that the solutions can’t be simple either. Simply punishing corporations or acting like their interests do not matter is not a solution.

Take your proposal for a 10% cap on interest rates. While it’s nice to imagine that people would be helped if they had to pay less interest on their loans, there are huge numbers of people who would simply not be given any loans under such a system. There are good reasons why many can’t find lower interest rate loans—such as their credit history and their incomes or the level of risk associated with whatever they want the money for. Banks have formula for determining whether they’re more likely to make money or lose it before offering a loan, and higher interest rates reflect the level of risk they are taking. And what’s more than that, when loans aren’t paid back, or when banks fail to make a sufficient profit, it’s not just the bank that suffers—as our recent mortgage meltdown demonstrates. Everybody suffers—anybody with a retirement account or other investments, and anybody who is just looking for a job or who works in an industry which is sensitive to an economic downturn. Credit is necessary to the economy, and when extending credit isn’t profitable, it doesn’t happen, and it isn’t just the corporations that suffer.

Posted by: Paul at September 14, 2009 11:05 PM
Comment #288099

Roy,
Why it is clear most private citizens would have a problem figuring out which Fail Safe Companies to target, IMHO a group like Fact Check.org could be established to keep both the Left and Right in line as America works toward dismantling these time bombs. In fact, Financial Reality.org sounds like a good name and would extend to the Economists and Wall Street a sound platform to make sure some of the Tricks of the Trade gets checkmated before anyone is taking in by false claims.

For example; Can anyone tell us why the Health Insurance and Medical Companies need higher rates? And why I will admit some logical reasons exis, I wonder if the lobbyists and pundits had to publicly defend those claims. Would anyone believe the Truths or the Falsehoods?

Posted by: Henry Schlatman at September 15, 2009 12:36 AM
Comment #288100

Paul,

I think you’ve touched on a serious issue here. Credit can be boon or bane, as we have seen.

Credit in the form of the Coal Companies script which was simply a form of enslavement isn’t helping the poor.

Credit used judiciously can help grow an economy in a productive way, and elevate the poor, as Bush advocated with home ownership.

The trick is finding the balance.

Posted by: gergle at September 15, 2009 12:38 AM
Comment #288139

Gergle,
I agree that credit and risk thereof should be balanced; however, the burden should be placed on banks and lenders since they are suppose to have the expertise to deal with such complex issues.

Additionally, I do believe that Congress and SEC should limit the amount of Margun and Calls allowed in the Market at any given time. Because why I understand that a lot of money can be made or loss in a matter of seconds on Wall Streetusing this method, the idea that the price of a stock can rise or fall on such foolishness is/has indeed lead to much of the mess we find ourselves in today. Since if they won’t learn from the up-tick rule than maybe they will learn if their investments does not add or subtract to the bottom line.

Posted by: Henry Schlatman at September 15, 2009 7:32 AM
Comment #288150

Roy, btw, Obama’s remarks directly to those working in board rooms, as exec. mgt., and on Wall St., were the most apropos’ remarks to that group, I have ever heard. I actually believe some in that group hearing Obama’s words, may be reevaluating their ability and willingness to respond appropriately to the nation’s and public’s needs as well as their own profit motives. And for those who don’t, his message carried a warning, which was also extremely timely and well deserved.

Posted by: David R. Remer at September 15, 2009 11:31 AM
Comment #288152

It’s hopeful that the judge rejected the SEC’s plea deal with BofA over Merryl.

Posted by: gergle at September 15, 2009 12:03 PM
Comment #288153

At my bank last week, they were handing out fliers with postcards attached, addressed to Durbin, Burris, and Schakowsky, about Congress changing the rules on the use of credit and debit cards, “interchange legislation”. I wonder if Wal-Mart is going to start issuing their own cards and Congress is paving the way for them.

Posted by: ohrealy at September 15, 2009 12:37 PM
Comment #288175

The talk and the change will be to close old loopholes while creating new ones that won’t materialize to the public for a few years. I find it hard to believe there is anyone gullible enough trust the Corpocracy.
Beck sez he will have another bombshell tonight. He is putting a lot of pressure on ACORN and Congress, fer shure. I heard that last Friday night Congress relieved the SEIU of census counting.

Posted by: Roy Ellis at September 15, 2009 4:41 PM
Comment #288186

“Beck sez”

Ohrealy sez, there are 8 soap operas on TV. Guiding Light ends this week after 70 years on radio and television. They run the days episodes on Soapnet overnight. Record them all and watch them and forget about Beck. It’s starting to sound like a crush. Watch fiction, read non-fiction.

Posted by: ohrealy at September 15, 2009 7:28 PM
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