The Fourteenth Banker Blog

October 27, 2010

Electoral Nothingness

Filed under: Running Commentary — thefourteenthbanker @ 4:27 PM

As we move towards another Tuesday, election day, it is astounding that so few that stand for office “get it”. Get what, you ask? Get that our tired alliances no longer serve us. Politicians on both sides of the aisle, and those rolling in it, still genuflect to the all-powerful elites, the corporations, the money men, the public employee unions; the prophets of empire, militarism, moral superiority, fears of moral corruption; those allied to Keynes, Friedman or the new Austrians. Most of these races are actually about…. nothing. Two politicians in most cases racing for the bottom, running negative ads smearing the other, standing for nothing other than power accumulation, when it is power accumulation itself that is the problem.

In this recent post, Barry Ritholtz says it is Us versus the Corporations.n

This may not be a brilliant insight, but it is surely an overlooked one. It is now an Individual vs. Corporate debate – and the Humans are losing.

Consider:

• Many of the regulations that govern energy and banking sector were written by Corporations;

• The biggest influence on legislative votes is often Corporate Lobbying;

• Corporate ability to extend copyright far beyond what original protections amounts to a taking of public works for private corporate usage;

• PAC and campaign finance by Corporations has supplanted individual donations to elections;

• The individuals’ right to seek redress in court has been under attack for decades, limiting their options.

• DRM and content protection undercuts the individual’s ability to use purchased content as they see fit;

• Patent protections are continually weakened. Deep pocketed corporations can usurp inventions almost at will;

• The Supreme Court has ruled that Corporations have Free Speech rights equivalent to people; (So much for original intent!)

None of these are Democrat/Republican conflicts, but rather, are corporate vs. individual issues.

For those of you who are stuck in the old Left/Right debate, you are missing the bigger picture. Consider this about the Bailouts: It was a right-winger who bailed out all of the big banks, Fannie Mae, and AIG in the first place; then his left winger successor continued to pour more money into the fire pit.

We are fighting the wrong battles. Both parties have spent money indiscriminately. Neither party is willing to sunset programs or laws that no longer serve a purpose because every program and every law has a constituent. Few are willing to say that killing two civilians for every enemy combatant is not patriotic and does not increase our security, or that 50 eyes for one eye is not justice in any moral system. Few are willing to put civil servants, private citizens, and uninjured veterans on the same retirement and health care programs.

I would add that political machines are on the side of the Corporation persons and not the Human persons.

Bill Black and Randall Wray make a case in two parts that could begin to rectify these power imbalances. At least someone is willing to speak up.

Part One

Part Two

Breaking the backs of entrenched power structures is unruly but it is not a zero sum game. From the ashes of these giants would emerge new young enterprises that would fill any void in the financial markets. What are the people getting from hanging onto these tenuous existing wealth and power structures? Very little. We are in the proverbial monkey trap. Our tiny little fists cannot get out of the trap because we won’t let go of what we think we have. Let it go.

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22 Comments »

  1. There is now an inevitability surrounding the real losses that have already occurred in the financial system as it stands tonight. No matter what choices are made the savings system loses. There is literally no legal way that the banks as debt system middle people can be made whole without destroying everyone else. The state would have to literally end recourse rights of debt holders to put back contractually defective loans to originators. If the present debt cash flow holders are precluded from recourse actions they will simply exit the system of dealings with originators and guarantors. Obviously, future business needed by the middle people would be gone and they with that exit are gone too! Originators, guarantors and securitizers are now fatally foreclosed from survival any way they move if legal rights of investors are exercised. If they survive for now, they destroy their investors. Given who these investors are future activity is foreclosed. What better example than state pension plans. If the near term future recipients of pensions are shut out or drastically cut they become a drag on a future regrowth of economic activity. Far to much personal investment , of any type, has been lost just as boomers retire.

    Any way you look at the problem, the big player dominated financial system has been discredited. Probably permanently if the political system does not react to fix the problem.

    Fixing the problem almost exclusively means a mass sudden reorganization of the financial system with some sort of method to negate credit default swaps. The big banks could be reorganized simaltaneously in a weekend with sufficient political will power. That reorganization would literally kill off untriggered CDS contracts. They become discharged period. This reorganization would have to include at least the top 25 financial instutions. The reorganization would need to be be contained within the US and similarly for any other country.

    Ignoring thousands of direct problems to summarize. The banks are seized and all deposits and other debt are frozen. Shut down. A percentage of all deposits and all other kinds of debt would be recapitalized to equity with the former depositors and creditors receiving the stock. A feature of providing earnings on this recapitalization would be the requirement of cash flows from liquidations and profits being distributed as dividends. The former shareholders might be left intact although diluted beyond imagination. These shareholders now run the company under a state trusteeship. Put backs would be settled by stock also. Their choice. Keep the debt or debt cash flow they own and run it off or put back what they want in exchange for stock from the securitizers / originators. The ratings agencies are gone… simply liquidated and new ways found to value offerings. This action would severly hit reserves of insurance companies, as another example, but they live with the stock they get. Similarly for pension plans and other fiduciary investors.

    It takes political nerve here and should be administrative in nature. The whole thing done within existing law and completed so rapidly that it cannot be undone by Congress. All that needs to happen is for the acts taken to gain a bit of time so that no law can functionally undo what was done. That cuts out the Congress and the Courts prospectively. Let em babble and whine. But what was done cannot be undone.

    Do the present executive political elites have the capacity and courage to solve this mess? My view is no , but I would love to be wrong.

    Comment by Jerry J — October 27, 2010 @ 6:14 PM | Reply

  2. Another example of an important, but little appreciated triumph of corporations over individuals in the financial sector:

    Investment firms routinely make all of their professional employees sign non-disparagement agreements that bind them in perpetuity to not say anything negative about the firm or its management.

    Think about it! This is non an anti-defamation clause that prohibits FALSE negative statements–those laws already exist. This is a contractual provision to prevent individuals with fiduciary responsibility from revealing information to the marketplace, which may not be at all confidential, that is TRUE. For example, a lawyer would tell you that revealing that the CEO of your former firm only came to work a few days a month is a clear violation of a non-disparagement agreement if it could be reasonably inferred that you considered the information to reflect negatively on the CEO and firm when you offered it. Even pointing out information in the fine print of a public SEC filing that the marketplace is generally unaware of arguably constitutes disparagement.

    As a result of this reality, working at an investment firm often requires contracting away OWNERSHIP OF YOUR OWN OPINIONS about the firm itself and its employees for the remainder of your life. Further, this practice is clearly highly contrary to the interests of investors, since it deters truthful negative information about investment managers from becoming known. Further still, the practice promotes a code of silence culture that supports the fraud that is all too common on Wall Street.

    What better example could there be of how the law supports corporate interests against the interests of the public?

    Comment by Don't Curse the Dark — October 27, 2010 @ 9:18 PM | Reply

  3. This is the true battle, and it is amazingly obscured by all the bread and circuses (which includes all political debate). What makes it so much worse is the blatant criminality of the corporations and the blatant corruption of the politicians. They simply do not care about appearances any more.

    Their mutual lack of concern convinces me more and more that the battle has already been lost. That the USA in reality most closely resembles the kleptocracy, plutocracy, and single-party system of the old Soviet Union.

    The ability to label citizens as domestic terrorists, amazingly allows all the powers of the Soviet police state.

    I hope I’m wrong.

    Comment by Eric W — October 27, 2010 @ 10:48 PM | Reply

  4. Not only is this the true battle, but I fear we have already lost.
    I’m not quite halfway through “Chasing Goldman Sachs”, by Suzanne McGee. Of all the books I’ve read on the financial crisis, this is the most complete in filling in the background.
    We all know (well, those of us paying attention), that the private equity funds are really the giant vampire squid -apologies to Matt Taibbi – but this explains how and why. I wonder if Barnie Frank and Chris Dodd really looked at their role? I certainly never heard much during the hearings.
    From destroying jobs (taking a company private, firing half the work force, then taking them public again) generates tons of cash for the Goldman’s and the partners in the funds, but it is killing the rest of us. Ms. McGee points out that Wall St. isn’t about matching needed capital to sources of same for business expansion or creation, the kind that would create jobs. The investment houses have been captured by the private equity firms and hedge funds, to the detriment of the country.
    Most people in America still buy the myth that if you work hard and keep your nose clean, you, too, can be a millionaire. Hence the reluctance even on Main Street to increase taxes on the wealthy. But if you look at the growing amount of wealth that is being created not by creating jobs and building the country, but by destroying jobs and tearing DOWN the country, you have to ask yourself, “Why are these #($**)# paying 15% income taxes (assuming they even declare the entire amount in the US). I guess what I really wonder is when Joe and Jill Sixpack will begin to ask that question.

    Comment by Sandi — October 28, 2010 @ 11:43 AM | Reply

  5. If we have lost the battle, it is a most curious loss. Our loss guarantees their loss. Everything private equity funds and hedgies do is premised on a future growth potential of whatever wealth they generate now. The systemic premise of going private, looting and going public again is to secure greater wealth growth through stock valuation increases. Their is an inevitability ever growing here. It is ever greater to generate more profits than losses that occur. Right now, the system literally requires losses to concentrate the wealth. This is a zero sum game. The losers , however, are expected to be the future profit providers . The losers themselves must make profits in order to be able to buy the stock or other financial profits only to lose them to the private equity types. The assumption here is that there is real wealth accretion far greater than the so called creative destruction. There are now inherent limiters of this idea. Physical materials are ever more constrained. Overpopulation ever decreases the ability of the proletarianized to increase consumption that provides the basis for net profit growth. Advancing proletarianization eventually runs out forcing reliance on labor to be the ultimate source of economic wealth growth. Adding to this mixture is the general degradation of the planet itself that very deterministically increases overheads that must be passed ultimately to the proletarian consumer to even entertain the idea of added markups to generate wealth.

    All in all, impediments keep adding up to a steady state human existence which removes net growth as a constant. Indeed, for a very long time, there must be a net shrinkage of human activity to arrive at a future steady state human organization.

    We are at the cusp of that shrinkage time frame. The system is like a ten year old kid and a ten pound shot put. The ten year old must become a 17 year old to deal with the ten pound shot. But the poor fellow will not grow to be the 17 year old imagined. Instead he is doomed to ever be a 17 year old in a ten year old body mass.

    Comment by Jerry J — October 28, 2010 @ 12:25 PM | Reply

    • Jerry J: I am having a hard time understanding what you are saying. Whether you think that perhaps the battle is already lost, or something else. “Our loss guarantees their loss” needs an example or something for me to understand. The top few percent are doing great, and everybody else is losing. Everybody else is marginalized, and becoming irrelevant. Perhaps even for a continuing economy. If the vast majority of the wealth is concentrated in a few hands, and the consumer is 70% of the economy, doesn’t that mean that the success or failure of the vast majority is irrelevant to the economy, or at least that they have been marginalized?

      Furthermore, when growth is limited then stealing rules. As for stock prices, for the top management that too has become largely irrelevant, as they get their compensation for success or failure, in other words by stealing from the shareholders.

      As far as the degradation of the planet (or peak oil, etc.) perhaps the increased overhead doesn’t have to be passed on to the proletarian consumer. Perhaps the proletarian consumer just has to survive without gasoline, heating oil, fresh vegetables, etc. Perhaps the proletarian consumer is best used the way they’ve historically been used, as abused serfs.

      You mention shrinkage, and that is one sure way to get growth again. It was something that seems to have been quite widely discussed and admired back in the beginning of socialism. Kill off and sterilize a bunch of people, so there’s room to grow again.

      If you own all the money, and you own all the stuff, I think you’ve won the battle. When you control all the currencies, when you have subjugated the masses, when you own all the governments, I think the war is quite possibly over, except for the mopping up.

      If we get a global currency in a few years, and a global government a few years later… if we have a few more stupendous crashes to strip the last remaining wealth from the populace… when housing is given to vets and police “to use up some of the overhang and reward these valiant heroes”… when martial law is declared… are these the signs we need to see?

      Am I giving up hope? No. But I am trying to use good risk management in my decisions moving forward, and one of my basic premises now is that the government is not my friend, has not been my friend, is not interested in my best interests, and that it is getting worse, and will most likely get much, much worse before it gets better.

      Comment by Eric W — October 28, 2010 @ 2:15 PM | Reply

      • just came across this: http://www.businessinsider.com/the-stealth-coup-detat-usa-2008-2010-2010-10

        Comment by Eric W — October 28, 2010 @ 2:52 PM

      • My post was taking a longer view. When private equity firms buy out a public firm to later take it public , the new capital buying the stock must have the wealth to buy the stock. As proletization of the middle class proceeds fewer are able to save or accumulate wealth, hence at some point the system is no longer capable of generating wealth over and above the wealth destroyed by capitalist creative destruction. The 2008 Second Great Bank Depression as Nomi Prin’s calls it, destroyed so much wealth of the producing population that some doubt it can ever be entirely overcome. By my estimate, the combined effects of savings destruction along with built in long term effects of the past generation will reduce future income of US citizens sufficiently to make it very difficult for the citizens of the US to BOTH replace the lost capital they required to survive the last part of their lives and live currently and at the same time produce added marginal savings to insure long term growth that enables capitalist expansion.

        For a considerable time some speculative players will win out short term. Every non productive speculative win though sequesters ever greater production capital. At the same time, profit from production will encounter ever more barriers that at some point simply overwhelm.

        Places like China will earn ever less cash flows from exports and will be required to constantly seek internal markets. Internal markets require increased wages to provide a market for internal production. This requires ever more surplus capital generation to cover the expansion plus the ever greater costs of imported externals like energy and materials. My point is that China will not borrow surplus capital from US sourced generation… Americans will consume ever more to attempt to just stay the same.

        The capitalists can never own all the money. Not even most of the money. To do that, they would own all the deposits in the banking and shadow banking system. Right now, most of those deposits are owned by ordinary people, their surrogates like pension and savings plans and by producing corporate interests holding money as working capital.

        The big money interests do not even own the actual stock of the big banking holding companies. They control the banking stocks to advance their personal portion which is always quite nominal to the total. look at the top holdings of major stocks on , say, Yahoo. Most of the top holdings are institutional… meaning middle class interests.

        If the big boys own all of the money their money would be worth nothing.

        There will never be a real global currency without a truly functioning global sovereignty. A sovereign is an entity that has no power higher than itself. A global state would be Federal in nature. That would be literally a thousand or more members of the Federal Structure, themselves sovereign, but for what they delegate. Each of these putative 1000 federal sovereignties would have Federal sovereignties within their own structure. The US has fifty sovereignties.

        Then there are religious hatreds, tribal hatreds, nationalist hatreds and criminal interests.

        The problem will be de globalization , if for no other reason, than huge energy and agricultural mal distributions.

        Then, money today is exclusively someone’s promise to pay plus a very small component of sovereign currency. All deposits in a bank, shadow bank and securitized ownership instrument are only a promise to pay that is worthless if the promisor is unable to generate the personal profits to pay off AND allow the generation of a replacement promise to pay.
        Carrying that further, the working capital assets excluding inventories are also promises to payoff and allow the generation of a replacement promise to pay. Leverage means, that at 33.3 to 1, debtors owed by the capitalist banking organization are owed 97 % of the proceeds of funds generation of the bank… that is 97 % of the realizable assets of the bank. There were a number of hedge fund structured investment vehicles where leverage was in the 30 times equity range and these biggies fell to.

        Martial law requires the dispossesed to act as soldiers for the elites. Guerrilla movements keep on proving that very few can knock the state on it’s ass if the people simply do not side with the state controlled by those with claims to all the money.

        Money is very poorly understood. It is today nearly a total intangible. Ownership of a promise to pay by others from future services , production and current inventory reductions that must be continuously renewed to not collapse to literally zero value. It is entirely a future interest discounted to the present moment since almost all states today operate using the central bank system.

        Comment by Jerry J — October 28, 2010 @ 5:15 PM

      • I checked JPM shareholders on Yahoo. Dimon and the other 4 listed biggest direct holders of JPM own far, far less than 1 % of JPM. The top institutional holder is State Street at 3.74 %. State Street’s and others of a similar nature hold almost all this stock for other’s. The upper half and others outside the US own 75 % of JPM through 1,517 institutions. The big boys control JPM as employees, not owners.

        Comment by Jerry J — October 28, 2010 @ 6:21 PM

  6. This is somewhat relevant about corporate management and what they’ve been up to lately: http://www.fundmymutualfund.com/2010/10/insider-sales-to-buys-in-top-10.html

    And this one has lots of numbers about wages and discrepancy over time: http://tax.com/taxcom/taxblog.nsf/Permalink/UBEN-8AGMUZ?OpenDocument

    Comment by Eric W — October 28, 2010 @ 11:27 PM | Reply

  7. Breaking the backs of the present employee ruling elites will almost surely require their substitution by criminal elites. The warring ” peoples” factions guarantee this. Our corporate apparatchik’s are not much different , in form or function, than the Russian employee elites. Both suffer from having adapted to being bureaucrats as a way of seeking power. Their are other types that would rise to the opening provided by the weakening of the giant bureaucracy that seem to be descendants of hydraulic state bureaucracies of ancient times. Their disease is rigidity derived from long periods of dealing with manipulating rule structures. These kinds of elites are usually lost trying to deal with Gordian Knot cutters who also understand bureaucracy manipulation. These types can emulate criminals or the law abiding with equal aplomb.

    So, the US in arriving at a simpler future consensus will be required to live through the lawless destroying the old arrangement in order to become the lawful controllers of the new arrangement. Mexico seems to be nearing a showdown that will require the criminal challengers , if they win, to establish a new lawful arrangement that sticks and which they control. The lawless on top cannot abide other lawless challenges.

    Political dissolution is a frightful thing. What better example than the Wars of the Roses. Dynastic failure anarchy periods are great examples of the principle.

    These people at the top are sowing future change of a most unpleasant nature given the obvious dissolution of commonwealth the US has experienced for some time now.

    Comment by Jerry J — October 29, 2010 @ 12:17 PM | Reply

    • Does it have to be lawless? Because increasing lawlessness of elites can only be overcome by like lawlessness? I am not sure I am ready to concede that yet. The Judicial branch needs to rise to the crisis.

      Comment by thefourteenthbanker — October 31, 2010 @ 5:55 PM | Reply

      • One hopes that change to better circumstances would not be lawless. But pacifist hopefa’s rarely achieve the needed change. One thing that is sure about lawful change is that the contending parties to the change actually understand the facts involved the same way. The people in the US seem to not understand each other enough to establish common facts. The more I get into the current problem simply trying to establish factual bases to make the right decisions for my family, the more I see that common understandings can no longer be arrived at. In economic activity, accounting was supposed to record transactional facts. Now value judgements have so perverted accounting it has become worthless. Hence, my posts below today.

        Comment by Jerry J — October 31, 2010 @ 6:46 PM

  8. Today’s Wall Street Journal has a top center lead called ” Birth of a Movement”. “The Tea Party arose from conservatives steeped in crisis.” One of the founding ladies whose own family business failed is quoted saying ” The government doesn’t need to come in and hold a business up and keep it from failing”. Later in the article are pictures of placards saying “Save Our Liberty from Socialism”.

    Well, whose business , of itself, was saved? At the most indirect level there are millions of shareholders between 11 second life trading ownership. In the case of JPM. 75 5 of the shares are in street names in over 1500 separate units. So whose business was saved? That must be taken in conjunction with the allowed failure of Lehman where 30 % of the shares were owned by employees . The employee owner business of Lehman was not saved. Just who owns these behemoths other than tons of passing ownership speculators?

    I have been intrigued since Obama took office that he did not simply put the lot of em into receivership and immediate reorganization. The depositors would lose a percentage of their demand and time deposits and receive stock. Similarly, all other creditors lose all in exchange for stock. That would have been the politic thing to do. Do what the middle class desires. They directly or indirectly were the owners of these behemoths. Those in the middle class that lost their portion of big bank holdings in the stock funds could shut up and understand they got what they desired. Similarly for their new stock holdings in exchange for their debt interests . Again directly or indirectly.

    Would these people be screaming the opposite had Obama grabbed the bull by the horns to save these people’s liberty from socialism?

    Or. Is this a case where the vast hordes of middle citizen’s do not know their ass from a hole in the ground? Too ignorant to understand the personal consequences of what they desire?

    I assume here that Tea Partiers represent a new emerging political understanding? They tip the scales in Congress to get , or close to getting, what they desire.

    Give em what they desire as the will of the majority? I bet it is.

    Comment by Jerry J — October 29, 2010 @ 3:31 PM | Reply

  9. If the pundits are at all accurate the independent’s are “getting It”. At least some marketed definition of ” Getting It”. There are now prognostications of a 70 seat switch in the House.

    What the independents are getting is the need to force the issue on jobs.

    again , giving the pundit’s credence, the Senate might just switch 4 seats. If a landslide is really brewing from votes by mad as hell independents, Obama might be close to being veto proof. Certainly, some incumbents in the Senate would get the message too.

    The banksters walk the gangplank? Certainly, they would be on their own in the next bank panic. Obama would be forced to do everything administratively or do nothing. Give em what they want.

    Tuesday night will be most revealing.

    Comment by Jerry J — October 30, 2010 @ 12:03 PM | Reply

  10. The monkey fist problem is a lot more imminent than would casually be thought. At least, so says Bill Gross of Pimco . Roubini too.

    Pimco’s important letter to his bond fund holders is titled “Run Turkey Run”.

    http://www.pimco.com/Pages/RunTurkeyRun.aspx

    My question is for the bankers. Bernanke will issue ” checks” as Gross discusses. My question , and the whole issue is silent in Gross’s piece is how will those ” checks” be paid when presented? Beyond a nominal amount, the ” checks” may only be settled with increased currency in circulation. Ahh, we are simply not a currency oriented country. That should be evident from the mere fact that total currency outstanding is rounded only $3000.00 per capita. If we were a currency using nation as we were even 60 years ago, per capita outstanding currency would be many times greater than the present $900 billion more or less. Going further, currency simply is redeposited and winds up back at the FRB’s in the form of Reserve Deposit Account increased liability.

    So, what is Bernanke really going to do here? What part am I missing? I assume here that he would never ask for authority to issue electronic funds in lieu of paper currency because the Congress would simply not grant the authority.

    Comment by Jerry J — October 31, 2010 @ 12:25 PM | Reply

    • Here is an explanation today of QE by Chris Ciovacco on Seeking Alpha.

      http://seekingalpha.com/article/233511-quantitative-easing-and-asset-price-inflation?source=email-partial-daily-diapatch

      I understand what is going on here with primary dealers but for the bookkeeping. Freshly printed money means electronic transfer of funds. I can readily see where these funds come from in LIMITED terms. The funds are incoming from the cash flows of assets . That is interest income on all those Mortgage Backed securities. These funds are electronically sent to the FRB’s along with other proceeds of sale in the open market. But that is an annual cash flow of very limited amounts compared to the fixed deposit liability range on the FRB balance sheet for reserve demand deposits. A quick look at the combined balance sheets of all the commercial banks plus foreign branches of foreign banks shows that most of the total reserve deposits are carried in cash and equivalents of the banks. Naturally the amount is not segregated but a little forensic comparatives to 2008 and before shows the banks are carrying the reserve balances as cash as they are supposed to do. Cash just sitting there.

      So, just how does Bernanke & Company honor a “check” presented for payment of Reserve Deposits in excess of reserve requirements for the entire balance? He must transfer property to satisfy the presented check. What property? If no property , they settle with electronic funds that is simply not recorded on the FRB books? That seems ludicrous to me.

      What I am driving at here is that most of the writing about printed money being put into the system is frankly bull shit. If I am full of shit here, how do they do it and where does the new printed money reside in the money system. Somebody got the sheckels in electronic form. ( It cannot be carried as cash on the banks and foreign branches and elsewhere at the same time.) Might it be just a circular deal to cover buying newly issued Treasuries? Alas, the US treasury would then not have funds in payment for their bonds unless the funds are clearable against the government when payment is made by the USG to daily creditors.

      The money is where ? Certainly, the FRB’s can put out a couple hundred billion here every year. I keep reading about massive money printing and it does not show up on the FRB Balance Sheets as being dispersed.

      There is some real bull shitting going on by many, utter fraud by the banks carrying their trillion bucks of reserve deposits as cash ( Ties to FRB liability in general terms) or absolute misunderstanding reigns all over the financial system. I just want to figure it out or to understand if I am the one full of shit here.

      Comment by Jerry J — October 31, 2010 @ 3:18 PM | Reply

  11. The election may be all about nothingness but they sure are voting where I live. There were lines in the post lunch period. As I was leaving a filled church bus pulled in.

    Comment by Jerry J — November 2, 2010 @ 2:33 PM | Reply

  12. Interesting perspective on rising conflict between individuals and corporations. On a bare bone basic level corporations exist to generate wealth more efficiently for the society while individuals are the end consumers. Unfortunately, of late, the corporate system has evolved to serve the needs of very very few at the expense of everyone else.

    Should corporations be constrained to follow strictly the First Law of Robotics (remember Harvard B School wants its graduated to take the oath)?

    It would be futile to equate individuals with corporations and grant later fundamental rights at par with the former (equality can exist only between equals!). This is not a David and Goliath syndrome. The only tool David can wield is through effective governance.

    It would be probably more meaningful to map the rising conflict between corporations and governments. Friction between the two is not necessarily a bad thing since it provides a system of checks and balances, provided the governance does not cave in.

    Comment by alwaysnaive — November 2, 2010 @ 3:20 PM | Reply

  13. Today Business Insider is re-running an old piece by Clusterstock Editor John Carney. It’s Okay That You Are Not Voting Today.

    http://www.businessinsider.com/its-okay-that-youre-not-voting-today-2010-11

    Comment by Jerry J — November 2, 2010 @ 4:12 PM | Reply

  14. Again, the citizen civil war rears it’s head in election outcomes. CNN quoted a poll where over 80 % of conservatives desire a drastically cut Federal Government whereas around 70 % of liberals think more government is necessary. Over the years, my own personal observation is that the conservatives are the more ardent about that government that governs least governs best than liberals which seem to be an ever declining hodge podge of commitment to platitudes of their choosing compared to the conservatives.

    OK, the issue must be decided. So set up giving the free market conservatives their head to fix the problems. Obama has a choice. He can simply be overwhelmed by gridlock simply defering the time if testing of conservative ideas. Give them some help.

    Here is my list although I have great reservations about all of them.

    Announce that the administration will no longer seek extensions of any and all state guarantees.

    End the Fannie and Freddie conservativeship. The government can exercise it’s 79.97 % stock warrant position. Revoke any guarantees in place for both. Likewise, make it crystal clear that there is no legal guarantee of F&F bonded indebtedness and invite the Republican’s to propose and pass such a guarantee or pass a Resolution that the Congress denies the so called implicit guarantee. Fannie and Freddie thus are on their own totally outside the protection of the Federal Government. All government loans will not be rolled over.

    Do the same for AIG.

    Propose that Medicare be totally disconnected from the Federal Government. Distribute the Medicare Trust Fund to the States on the basis of the 2010 census. From then on , each state runs it’s own medicare or simply keeps the funds they receive. Obviously Obamacare would be repealed as well as Medicare itself. The Federal Government is out of the medical insurance business other than an insistence on portability between the states. The Republicans would be required to be sponsors of such a bill. Indicate Obama would sign such a bill arriving at his desk.

    Obama should announce that he will not sign a bill extending the Bush cut’s in any form. The people desire fiscal responsibility. You have it starting with increased taxes. The Republican Congress can craft their own new tax relief which would face stringent concurrence by the administration or be vetoed.

    Announce that it will be the policy of the Obama Administration not to intervene in any financial crisis unless a coordinated agreed bill reaches his desk and is law he can work from. His administration will not put forth a bill but will work with the Republican’s on their bill if they can.

    End all guarantees to the big banks that can be revoked and announce no new renewal will be sought.

    Announce that , under the principles of the free market that the administration will consider foreclosure actions to a state matter but that all violations of Federal Law will be pursued . Announce the dedication of the justice Department to prosecution of Federal Financial Crimes.

    Disaster time? Well, the people have chosen the lesser government approach. Give it to them. If the Republican Congress desires a changed stance, the administration will work with them every way they can.

    As I said, decisions were made by the people. Relect their decisions in governance.

    Comment by Jerry J — November 3, 2010 @ 3:33 PM | Reply

    • That would make a good civics lesson. Perhaps he should have provided a civics lesson six months ago. Even today in a couple interviews I saw the Tea Party winners would not state what they would cut.

      Comment by thefourteenthbanker — November 3, 2010 @ 5:18 PM | Reply


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