FFF: Friday Full of Frustration

The idea that less regulation is better is being tested today in the United States. In the newspapers and on the TV are reports that people are being prosecuted for losing money in hedge funds, while others are facing prosecution for their role in the mortgage meltdown. The former chairman of our central bank, Alan Greenspan, was known for his attitude towards regulation. He came from the political-economic philosophy that less regulation was better and no regulation was best. Unfortunately, the recent experience we have all observed with regards to hedge fund managers and mortgage brokers, demonstrates that less regulation is not better. I know the arguments against regulation, that it is an unnecessary expense thrown on the backs of business. This is a lame reason. What has it cost all of us that regulation was not enforced, or that proper regulation was thwarted by groups that lobbied against more or better regulation. How do we assess the cost to our economy for the lack of adequate regulation in our recent past? Does anyone think that the abuses we have seen in the securities and mortgage businesses are less costly to us as a nation than what has happened to our economy now? Even our food supply and imported children’s toys needs better regulation as to the quality and fitness of the products that we let into our country. The idea that corporations will do the right thing is a myth. Corporations pay homage to one deity and that is the bottom line. To give you a visual, corporations if given half a chance, are like an 18-wheeler truck blasting through stop signs with no regard for anyone’s safety except their own profitability. They have the size, financial and political muscle to push their agenda all the way to the Congress of the United States. Measure how much we are spending now to prosecute those that broke the law. Could not this money been better spent on regulation, oversight and auditing? It is not enough that we are running a trade and budget deficit, but that the confidence in our investment banking institutions, our commercial banks, our mortgage businesses and the housing market all are now suspect every day. The greed of a few has extracted a heavy price from all of us. Add to all of these factors our situation with the price of oil and the decline of the value of the US dollar, and you have a society and an economy that is being put to the test of its resourcefulness and durability. This country has many many good and decent people. Most of these people had little if anything to do with the crisis that hit us in 2007 and 2008. Some have even referred to the situation in the United States today as the privatization of profits and the socialization of losses. For many of us, it certainly feels that way. The sale of Bear Stearns to J.P. Morgan that was arranged with the approval and concessions by the Fed are now being examined more closely. I still feel the Fed did the right thing for the good of everyone, not just for J.P. Morgan or Bear Stearns. But the people need to know that some actions will be taken by the Fed and the other government parties involved in the sale, that such an occurrence is not likely to happen again. At least not in the near future, and at best, never. But this all gets back to the American electorate raising the level of discourse and not letting themselves be side tracked by wedge issues that only act to draw their attention from the things that really need to be fixed by new regulation, proper oversight and auditing. Joe six pack, please wake up, your country that you thought you knew and loved is being taken away from you. Bad tomatoes are for throwing at bad politicians, not feeding to our children. Lead paint should not be on children's toys either. Treating every American, citizen or not, decently is what we used to be all about. That is the level playing field that we all strive for. It is time to put on the spikes and get out there and make it happen. We must makes change now. Stay tuned.