Showing posts with label financial sector. Show all posts
Showing posts with label financial sector. Show all posts

Friday, January 13, 2012

Simple Missions That Morphed Into Monsters

An income greedy financial sector, corrupt political parties, and bean counter corporations are all having lethal effects on the countries welfare.

All three areas once had a specific limited service to contribute to the country. Over the years, however, they have been allowed to expand their activities and boundaries to the point where they have become self serving and are now harmful to the economy, our democracy and our welfare  They have done this by abandoning service to the country and its citizens and focusing instead on creating in-house benefits. This has been accomplished with the full complicity of our elected government. All of these activities have been gained through expansion of their activities outside of constitutional requirements.

The Constitution granted Congress responsibility for the fiscal activities of the country. The Congress utilized private sources to assist it to perform specific functions and to assist in ensuring that funding was available to companies and citizens for productive use. Because they are managing national funds their focus should not be maximizing their own profits. This situation has reversed itself and these functions are now managed by central banks that are corporations focused on creating revenue for themselves, not for the productive sectors of our economy. Combine this with lax overview by the Government and we have hugh misallocation of funds misdirection of national goals, and financial disasters.

The Constitution does not mention political parties. Their potential for doing harm was warned by several founding fathers, including Thomas Jefferson, Geoge Washington, and John Adams. This was done on the fear that it would create primary loyalties to the party instead of the general welfare. This has proven to be true. There is a natural tendency of citizens to start groups that would organize to jointly advocate their position for pending legislation. Now, however we have only two parties that have been jointly untouchable in power for over 150 years. They have become a major anti-democracy factor by their tight control of the selection process that determines the candidates that are finally presented to the citizens. Their control of the elected government has allowed them to define an election process that greatly favors the current system. The result is that our election process is governed by two private organizations that have their primary loyalty to themselves rather than the nation

Reflecting the feelings that English corporations had been exploiting the colonies in the days before independence corporations in early America were rare, They were treated as unique organizations formed for a special business activity, such as building a canal. They are not mentioned in the Constitution and were initially solely a state responsibility. They were forbidden to become involved in politics. Over 200 years of mainly Supreme Court decisions have reversed this to give them all rights of a natural person and the right to use their profits `to exert enormous power over our legislative and electoral processes. To restore our democracy all three institutions must be put back into their proper position in relation to national governance.

The financial sector must be put back in the position of a service to the productive elements of the economy and not focused on non productive attempts to increase its own revenues.

Political parties must be reduced to equality as one of many organizations promoting candites and have no special advantages over unaffiliated candidates.

Corporations likewise must be focused on producing useful services and products, not on government and electoral process manipulation for special privileges.

These corrections will be difficult and take time. All three institutions will fight strongly to preserve their positions. It will only happen with an overwhelming demand from the citizens. It will require a drastic reduction of the funds that can be applied to influencing the government and elections.

Sunday, June 05, 2011

Apply Compensation Recovered from Financial Sector to Rebuilding Our Infrastructure

The purpose of the financial sector is to manage and encourage the nation’s flow of capital for beneficial uses. To obtain this service the nation has dedicated trillions of dollars to the industry. The sector, however, has lost or wasted a significant portion of these funds in a constant search for its own profits. This mismanagement has resulted in a major catastrophe for the nation and great harm to the lives of millions of citizens. Minimum operation was only partially returned to the completely disgraced system by the Government providing large injections of funds and guaranteeing the solvency of the major banks.


If the principles of capitalism had been applied at least six major banks would have been allowed to fail. The Government, in a tough decision to make, concluded that such widespread failure would present such a shock to the economy that we would enter a full fledged depression equal to or worse than any every experienced. They were in a position where they had to support incompetence to prevent a greater negative.

I cannot judge the wisdom of this decision. A complete breakdown was avoided. The banks are now making profits as usual but the nation still struggles with massive unemployment and lack of investment. Because of the recession and the associated loss of revenue we cannot even find the political courage for essential investing in the nation’s infrastructure.

In July 2110 the Dodd-Frank bill was passed to correct many of the financial sector operations which lead to this catastrophe. Having been saved by the Government intervention you would think that the industry would be despite to make amends and correct its’ errors. Instead it is spending large sums with lobbyists to prevent the laws effective implementation and to allow continuing with their operations and profit motivations unchanged.

There is no business sector that is held in less regard by the public than financials. The financial sector morally owes the country serious compensation to even allow it to continue to exist as currently structured. This is compensation that could be directly applied to infrastructure improvements and the associated employment.

The country needs it now.