financial reform

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America! Is it too late?

“Should it really matter if some other country is richer and more militarily powerful? Who cares if some other country has economic supremacy as long as your country is prosperous and can manage its own internal affairs. For example the countries of Denmark, Sweden and Norway, each economically advanced, seem to have no qualms about who rules the world as long as they are left alone to be prosperous and peaceful, though their attitude might well change were whoever held the purse strings to start to curb their freedoms and encroach upon their way of life. But until that happens, whether the global financier is China, Russia or America seems, for them, largely irrelevant.” How the West Was Lost Dambisa Moyo

America is losing it and it will take drastic action for us to get back on course. Why has this happened?

  • We forgot, never learned, how to compete. 
  • Consumption 
  • We allowed our government to fail 
  • We put ourselves in too much debt and became over leveraged. 
  • We mortgaged the future. 
  • Education has taken a back seat and thus, so has our future.
Failing to Compete:  We were spoiled by the greatest generation. They won World War II and there was no competition standing after that horrific event. As a result we indeed did prosper;  however, we did not learn to compete globally because there was no one to compete against.

Consumption: We learned how to consume and became addicted to it. We consumed for the sake of consuming without paying attention to the economic progress that was being made by the rest of the world. Eventually we began to distribute our wealth to the rest of the world by our addiction to consumption.

Government Failure: Our Politicians, who in fact are us, also got intoxicated with consumption. They failed to look out for the general welfare of the Union. They have allowed the free markets’ power to create wealth and goods to be destroyed by oligopolies. Our representatives failed to create and enforce rules that would guarantee the freedom of “free markets”. Instead, these oligopolies have bought off our representatives as a result of their addiction to consumption.

Further the politicians bought off many voters by allowing the creation of expensive pension plans, both private and public, that are not totally funded. This shoe has yet to drop.

Over Leveraged:  We borrowed money from future generations and have no plans in place to pay them back. We have not used the money to invest; but rather, we used it it to feed our addition to consumption. The sub prime crisis brought it to a head, but the problem has existed for some time. The problem is further exasperated by the enormous amount of unfunded and hidden costs of future pension benefits that we are obligated to fund.

We are Squandering our Education System: When you have an addiction,  education is neglected. Our education system use to be the best in the world. We are slipping and parts of society do not look at dollars spent on education as an investment. Instead, it is looked at as something that limits our ability to consume even more.

To solve these problems, we must take drastic action; sooner rather than later. I don’t think we have the will to do it. Do You?
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    Banking Scandals And Politicians

    The dirty laundry showing in the banking industry is also worn by our politicians. Why is not Obama and Romney talking about what is going on in banking; not only the LIBOR scandal, but the huge trading losses incurred by JP Morgan Chase. In traditional politics our candidates would get free air time in all news outlets and be on television front and center. Further, politicians in America  are much quieter about this scandal than their counter parts in the U.K..


    In years gone by Romney would be shouting “it is happening on Obama’s watch.” Obama would be uttering “let’s get those scoundrels.” The legislative branch is just as silent. Congressman Spencer Bachus, Chairman of the House Committee on Financial Services and Tim Johnson, Chairman of the Senate Committee on Banking, Housing and Urban Affairs would be holding hearings and issuing subpoenas calling bankers on the carpet like they did during the collapse of the auto industry. I still remember Senator Shelby publicly demeaning the auto executives. Where is he now?

    The silence is obvious. What is not so obvious is why. If one imagines the possible reasons for Washington being so quiet, high on the list would be the fact that the financial services industry is a heavy contributor to political campaigns. After all, we do have a major campaign going on right now. Could this be the reason? Where is Thomas M. Hoenig when you need him? More: http://bit.ly/FF1012tbts

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    Credit Agencies: Risk To Your Fiscal Health

    “MF Global’s investors may not have been fully informed about the European bet, but the firm’s executives had been explaining the strategy to the ratings agencies for months, according to two people with direct knowledge of the conversations. Indeed, Moody’s Investors Service and Standard & Poor’s had applauded Mr. Corzine’s effort to overhaul the firm, a move that included ratcheting up risk.

    “We consider the most recent strategic plan of the new C.E.O. Jon Corzine to be sound,” S.& P. said in 2010, while acknowledging the plan “will incrementally increase the firm’s risk profile.”
    But the move by Finra to force the extra capital cushion appeared to only unnerve the ratings agencies when news reports about it emerged in October. A week later,Moody’s cut its rating on MF Global to a notch above junk, pointing to the European debt holdings.” A Romance With Risk That Brought On a Panic, BY AZAM AHMED, BEN PROTESS AND SUSANNE CRAIG. New York Times, December 12, 2012

     Credit rating agencies, like Standard & Poor’s and Moody’s recieve their fees from the companies that they are rating. Why are some people surprised when a company fails even when having a high rating from these companies. The fox is guarding the chick coup.

    Why are rating agencies allowed to be bought off by the public companies that they are rating? Either this needs to change orthe agencies need to be shut down. They are doing a disservice.

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    Ryan Is on Right Track; However He Forgot One Rail!

    I use to own a Lionel model train and it had three rails. It could not run without the third rail that delivered the power.

    The solution to fix our budget needs a third rail. We need to cut spending and raise taxes; however, we also need to free our “free markets”. Our free markets have been destroyed by government allowing core industries to be taken over by a few large corporations choking off competition.

    One of the primary responsibilities of government is to protect its citizens from tyranny; both, foreign and domestic.

    An affect of this take-over by oligopolies is that the distribution of income in this country has been distorted. If this is corrected income disparity would shirk, less government welfare programs would be needed, we would be more innovative and tax revenues would increase.

    This is not being discussed because every politician in Washington is on the take from these large corporations. America is losing it and it will take drastic action for us to get back on course. Why has this happened? More