I do a lot of reading. I read from a lot of different sources. You might say I'm eclectic, or you might say I'm scattered; you choose! Today, something I was mulling over yesterday came together with something Brandon sent in an e-mail, and I really must speak again. It's about money.
It's about more than money, of course. Once upon a time, money and buying were pretty understandable things to most of us. We had money, we spent it on things we needed. We didn't have money, we didn't spend it. In earlier generations, they were even better about not spending money they didn't have. A farmer or rancher might have a loan on his property or his herd, a city dweller might have a mortgage on a house. Otherwise, it was pretty much pay as you go.
Before those days, there was barter. If I have something you want, and you have something I want, we can trade. Or maybe you can try to take away what I have that you want, but there's a cost there, too, if I'm wary and wise. Unlike Wimpy (from Popeye), who would gladly pay you Tuesday for a hamburger today, most people lived on a debt-free basis. So did our government.
In fact, Thomas Jefferson said, "Funding I consider as limited, rightfully, to a redemption of the debt within the lives of a majority of the generation contracting it; every generation coming equally, by the laws of the Creator of the world, to the free possession of the earth he made for their subsistence, unencumbered by their predecessors, who, like them, were but tenants for life." Other founding fathers had similar thoughts.
So, today, we have a banking system which has gone wild, with the help and encouragement of the government, and a Federal Reserve which keeps printing more and more money, but there's nothing to back it up, and our government is in debt to the tune of trillions of dollars. I can't even visualize a trillion dollars, no matter how many drawings Beck and O'Reilly show me. Here's an interesting comparison from John Lipscomb's article on the Federal Reserve.
". . . it's interesting to know that, if we had lived in ancient Rome, with a one ounce gold coin we would've been able to buy a very fine toga, a hand-crafted belt and a pair of sandals--that was the price in Rome. Today, if we have a one ounce gold coin what can we buy with it? We can go into any men's store and buy a very fine suit, a hand-crafted belt and a pair of shoes. The price of these items hasn't changed in thousands of years when expressed in terms of real money but when expressed in terms of these things we carry around in our pockets called Federal Reserve notes . . . , the prices keep going up and up and up, because the value of those units keeps going down and down and down, because they keep making more and more and more of them and dumping them into the economic soup."
I had heard the statistic that for the time we stayed on the gold standard, we had no, zip, zilch, nada inflation, but the minute we went off it, inflationary cycles began. I could understand that. But to think of it in terms of ancient and modern clothing exchanged for one ounce of gold this way . . . that was really telling to me. That was a visual I could comprehend. Do you see my stick-figure Roman in his outfit and the stick-figure New Yorker in his? You might want to read John's whole article, as well as the one about the Doomsday Seed Vault. Lots and lots of information to process. Print it out and read it over a few days' time.
These are the things roaming around in the gymnasium of my mind when Brandon's e-mail arrives. It's a copy o the White House website post on Obama's speech about Financial Reform. Or rather, it's the reform he plans, but as explained by Treasury Secretary Geithner and NEC Chair Larry Summers and published as an op ed piece in the Washington Post this morning, as well as posted on the white house site by Jesse Lee.
You need to go read the post. I'll wait here, it won't take you very long, really. I'll play some nice Tim Janis music while I'm waiting . . . . Okay, let's take it from the top. Just the things that bother me the most. It all sounds so reasonable, until you start to think about what's really being proposed.
Point 1: "In addition, all large, interconnected firms whose failure could threaten the stability of the system will be subject to consolidated supervision by the Federal Reserve. . . ."
Would that be the same Federal Reserve which is currently printing money and diluting the value of the dollar? The same one that is trying to sell more bonds to other countries, countries which really aren't sure they want to subsidize our debt with a loan? That Federal Reserve is going to supervise "interconnected firms" in the U.S.?
Point 2: ". . .and we will establish a council of regulators with broader coordinating responsibility across the financial system."
Uh-oh, we need another regulatory board? Where's the authority for establishing more regulators? How will they be established? To whom will they report? Where will their salaries be financed? How many will be on this council? Don't we have enough bureaucracy already in place to take care of this? This sounds like more people under the direct control of the president, like the 16 czars he's appointed so far. And doesn't czar mean tyrant dictator to you? It always has to me. Why are we even using that word?
Point 3: ". . . securitization . . . ."
What the heck does that mean? Is that even a word?
Point 4: "The administration's plan will impose robust reporting requirements . . . ."
Robust, eh? I thought that was an adjective for wine. And to whom is the reporting done? What are the consequences of those reports? What's the authority for them? Who has access to the reports? And, perhaps more importantly, who doesn't?
Point 5: ". . . reduce investors' and regulators' reliance on credit-rating agencies. . . ."
And that's meaningful because . . . ? Maybe we are reducing that because our entire country is about to lose it's credit rating? Because we have no monetary stability as an entire country?
Point 6: ". . . and, perhaps most significant, require the originator, sponsor or broker of a securitization to retain a financial interest in its performance."
More gobbledygook. I get it. A person who sponsors a "securitization" (whatever that is) can't then sell out and go off into the sunset. But couldn't you just say that? Whatever happened to calling a spade a spade? In politics, I guess it's pointless to expect anyone to speak in plain English. Perhaps Mr. Geitner was showing us he really is the only one smart enough to "save" the country. Or perhaps he's just showing us that he has no clue how to relate to, or communicate with, most of us.
Point 7: "The plan also calls for harmonizing the regulation of futures and securities. . . ."
Harmonizing? They're forming a choir? Yes, I can hear it now . . . and it's way off key and out of tune.
Point 8: ". . . strong oversight of "over the counter" derivatives."
Oversight by whom? Sounds like a drug problem to me. Who is going to oversee the overseers? Who is going to be able to see the oversight? This gets confusing!
Point 9: "All derivatives contracts will be subject to regulation, all derivatives dealers subject to supervision, and regulators will be empowered to enforce rules against manipulation and abuse."
Regulators chosen by whom, paid by whom, reporting to whom? Could you just speak English, please, and explain how many regulators and overseers and czars and controllers, ad infinitum, the Obama administration is proposing to unleash on our financial system?
Point 10: "Third, our current regulatory regime. . . ."
Regime? Isn't that a ruler who has a government we don't like somewhere in the third world?
Point 11: "Weak consumer protections against subprime mortgage lending bear significant responsibility for the financial crisis."
No, lack of honorable dealings, the government interference and insistence on lending institutions making loans they knew didn't meet the "robust" criteria of the lending market is what bears significant responsibility for the financial crisis. Could we have a little more honesty and a little less spin and self-protection here?
Point 12: " . . .the administration will offer a stronger framework for consumer and investor protection across the board."
Protection from everyone except the government, apparently. A "framework" for protection doesn't sound like much other than an empty scaffolding waiting for the painters or window washers to show up.
Point 13: "Fourth, the federal government does not have the tools it needs to contain and manage financial crises."
No kidding. Would that be because it isn't the job of government?
Point 14: T"o address this problem, we will establish a resolution mechanism . . . ."
Resolution mechanism? What is this? A machine we're going to manufacture? Input problem, output resolution? I can only wish it were going to be a machine!
Point 15: ". . . This authority will be available only in extraordinary circumstances. . . ."
And just who is going to wield that authority in extraordinary circumstances? Who decides when circumstances have reached extraordinary? Who decides when the crisis is at an end, or the circumstances are no longer extraordinary?
Point 16: Fifth, and finally, we live in a globalized world,
Not me. I live in the United States of America, by the power of the US Constitution, which is fueled by me, and others like me. You want to rule the world, go get elected emperor. We are *not* responsible for the world, nor should we be. If I want a Kumbaya moment with my sisters and brothers around the world, we'll do it at a conference. I do not want to have my country at the mercy of the UN or a "consensus" oriented government from around the world.
We were lucky to get one righteous constitution, and be led by men who had a vision of a republic, not a democracy, not a "progressive" liberal fascist government. I don't think we'll get a second chance at it. Let's stand up now and demand our rights as free citizens to return to the republic, to return to sovereignty of the states, and to shrink big government down to the size of a peanut. Let's demand the checks and balances be put back in place. No more czars and councils and regulators who are responsible only to the president, whomever that president is.
Repeal the government, keep the Constitution.