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Awareness Abounds

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November 12, 2009

When I started this blog in April of 2008, my focus was on that year’s political campaigns and the exciting Presidential primary season.  At the time, I expressed my concern that the most prominent centrist in the race, John McCain, would continue pandering to the televangelist lobby after winning the nomination, when those efforts were no longer necessary.  He unfortunately followed that strategy and went on to say dumb things about the most pressing issue facing America in decades: the economy.  During the Presidential campaign of Bill Clinton, James Carville was credited with writing this statement on a sign in front of Clinton’s campaign headquarters in Little Rock:  “It’s the economy, stupid!”  That phrase quickly became the mantra of most politicians until the attacks of September 11, 2001 revealed that our efforts at national security were inadequate.  Since that time, we have over-compensated in that area.  Nevertheless, with the demise of Rudy Giuliani’s political career, the American public is not as jumpy about terrorism as it had been — despite the suspicious connections of the deranged psychiatrist at Fort Hood.  As the recent editorials by Steve Chapman of the Chicago Tribune and Vincent Carroll of The Denver Post demonstrate, the cerebral bat guano necessary to get the public fired-up for a vindictive rampage just isn’t there anymore.

President Obama’s failure to abide by the Carville maxim appears to be costing him points in the latest approval ratings.  The fact that the new President has surrounded himself with the same characters who helped create the financial crisis, has become a subject of criticism by commentators from across the political spectrum.  Since Obama’s Presidential campaign received nearly one million dollars in contributions from Goldman Sachs, he should have known we’d be watching.  CNBC’s Charlie Gasparino was recently interviewed by Aaron Task.  During that discussion, Gasparino explained that Jamie Dimon (the CEO of JP Morgan Chase and director of the New York Federal Reserve) has managed to dissuade the new President from paying serious attention to Paul Volcker (chairman of the Economic Recovery Advisory Board) whose ideas for financial reform would prove inconvenient for those “too big to fail” financial institutions.  As long as JP Morgan’s “Dimon Dog” and Lloyd Bankfiend of Goldman Sachs have such firm control over the puppet strings of “Turbo” Tim Geithner, Larry Summers and Ben Bernanke, why pay attention to Paul Volcker?  The voting public (as well as most politicians) can’t understand most of these economic problems, anyway.  I seriously doubt that many of our elected officials could explain the difference between a credit default swap and a wife swap.

Once again, Dan Gerstein of Forbes.com has directed a water cannon of common sense on the malaise blaze that has been fueled by a plague of ignorance.  In his latest piece, Gerstein tossed aside that tattered, obsolete handbook referred to as “conventional wisdom” to take a hard look at the reality facing all incumbent, national politicians:

It’s the stupidity about the economy in Washington and on Wall Street that’s driving most voters berserk.  Indeed, the financial system is still out of whack and tens of millions of people are (or fear they soon could be) out of work, yet every day our political and economic leaders say and do knuckleheaded things that show they are unfailingly and imperviously out of touch with those realities.

Gerstein’s short essay is essential reading for a quick understanding of how and why America can’t seem to solve many of its pressing problems these days.  Gerstein has identified the responsible culprits as three groups:  the Democrats, the Republicans and the big banks — describing them as the “axis of cluelessness”:

We have gone long past “they don’t get it” territory.  It’s now unavoidably clear that they won’t get it — and we won’t get the responsible leadership and honest capitalism we want–until (as I have suggested before) we demand it.

Surprisingly, public awareness concerning the root cause of both the financial crisis and our ongoing economic predicament has escalated to a startling degree in recent weeks.  This past spring, if you wanted to find out about the nefarious activities transpiring at Goldman Sachs, you had to be familiar with Zero Hedge or GoldmanSachs666.com.  Today, you need look no further than Maureen Dowd’s column or the most recent episode of Saturday Night Live.  Everyone knows what the problem is.  Gordon Gekko’s 1987 proclamation that “greed is good” has not only become an acceptable fact of life, it has infected our laws and the opinions rendered by our highest courts.  We are now living with the consequences.

Fortunately, there are plenty of people in the American financial sector who are concerned about the well-being of our society.  A recent study by David Weild and Edward Kim (Capital Markets Advisors at Grant Thornton LLP) entitled “A wake-up call for America” has revealed the tragic consequences resulting from the fact that the United States, when compared with other developed countries, has fallen seriously behind in the number of companies listed on our stock exchanges.  Here’s some of what they had to say:

The United States has been engaged in a longstanding experiment to cut commission and trading costs.  What is lacking in this process is the understanding that higher transaction costs actually subsidized services that supported investors.  Lower transaction costs have ushered in the age of  “Casino Capitalism” by accommodating trading interests and enabling the growth of day traders and high-frequency trading.

The Great Depression in Listings was caused by a confluence of technological, legislative and regulatory events — termed The Great Delisting Machine — that started in 1996, before the 1997 peak year for U.S. listings.  We believe cost cutting advocates have gone overboard in a misguided attempt to benefit investors.  The result — investors, issuers and the economy have all been harmed.

The Grant Thornton study illustrates how and why “as many as 22 million” jobs have been lost since 1997, not to mention the destruction of retirement savings, forcing many people to come out of retirement and back to work.  Beyond that, smaller companies have found it more difficult to survive and business loans have become harder to obtain.

Aside from all the bad news, the report does offer solutions to this crisis:

The solutions offered will help get the U.S. back on track by creating high-quality jobs, driving economic growth, improving U.S. competitiveness, increasing the tax base, and decreasing the U.S. budget deficit — all while not costing the U.S. taxpayer a dime.

These solutions are easily adopted since they:

  • create new capital markets options while preserving current options,
  • expand choice for consumers and issuers,
  • preserve SEC oversight and disclosure, including Sarbanes-Oxley, in the public market solution, and
  • reserve private market participation only to “qualified” investors, thus protecting those investors that  need protection.

These solutions would refocus a significant portion of Wall Street on rebuilding the U.S. economy.

The Grant Thornton website also has a page containing links to the appropriate legislators and a prepared message you can send, urging those legislators to take action to resolve this crisis.

Now is your chance to do something that can help address the many problems with our economy and our financial system.  The people at Grant Thornton were thoughtful enough to facilitate your participation in the resolution of this crisis.  Let the officials in Washington know what their bosses — the people — expect from them.



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From St. Paul to Ron Paul

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September 11, 2008

The first time I ever voted in a Presidential election was when I decided to vote for the Libertarian candidate, Roger MacBride.  I agreed with the principles of the Libertarian Party.  They had good writers, putting their message together in a way that could gain the enthusiasm of those not electrified by “Oatmeal Man” Gerald Ford, or by the tranquil Jimmy Carter.  Although they have not managed to get many charismatic candidates to act as their standard-bearers, the Libertarians finally have one this year.  Bob Barr served in Congress as the Representative for Georgia’s 7th Congressional District from 1995 to 2003.  In Congress, he served as a senior member of the Judiciary Committee, as Vice-Chairman of the Government Reform Committee, as a member of the Committee on Financial Services and the Committee on Veteran’s Affairs.  Although he was a harshly partisan antagonist of Bill Clinton during the impeachment promotion, he subsequently took on a relaxed, charming demeanor, winning over the usually “cold room” for conservatives on HBO’s Real Time with Bill Maher.  In 2004, he left the Republican Party to join the Libertarian Party.

Bob Barr is now running for President, as the candidate of the Libertarian Party.  In 1988, Ron Paul was the Libertarian Party’s Presidential candidate.  You may remember Ron Paul from the 2008 Republican primaries, occasionally beating Rudy Giuliani and the other “also-rans” of this past spring.

On September 10, Barr’s campaign manager, Bob Varney, issued a press release, disclosing that Bob Barr has invited GOP Congressman Ron Paul to be his running mate in the upcoming Presidential election.  The press release disclosed that:

In a letter sent to Paul, Barr called Paul one of the “few American patriots” who exist in today’s society, and asked him to “seriously consider this final offer as an opportunity to show true, lasting leadership beyond party politics”.

Wayne Allyn Root, who has been Barr’s running mate in this election, was quoted in the press release as expressing support for the selection of Ron Paul as Barr’s new running mate:

Understanding Dr. Ron Paul’s reputation and name recognition in the freedom movement, I am willing to step aside as Libertarian vice presidential candidate if he would be willing to take my place.  I will pledge to work day and night, just as I have as the vice presidential nominee, to support Dr. Paul.  I believe this is a wonderful opportunity for the Libertarian and freedom movements.  I encourage Dr. Paul to accept Congressman Barr’s offer.

Many might consider this entire idea as the daydream of some “fringe” political group.  Nevertheless, you may want to look down the road (as the Libertarians obviously are) to a scenario wherein Sarah Palin, for whatever reason, alienates the centrist Republicans and independents, who may have otherwise voted for McCain.  These people might then vote for Bob Barr.  Add to the mix, those not currently enthusiastic about a McCain Presidency, who just can’t get motivated to vote for Barack Obama (for whatever reason).  With Ron Paul on his ticket, Barr has the possibility of winning enough electoral votes to prevent McCain or Obama from winning a majority of Electors as a result of the general election, in the event that “wild card” Palin turns out to be a disaster.  If that happens and no single candidate has a majority of Electors in the Electoral College, the Twelfth Amendment requires that the Presidential election shall be decided in the House of Representatives.  Since Bob Barr and Ron Paul both served in the House, unlike Barack Obama, there is a chance that Barr could win the Presidency.  The mere fact that the Democrats have a majority in the House is of no consequence.   The Twelfth Amendment requires that each State shall vote in the House as a single delegation, with each State having only one vote.  That vote would be determined by the majority of a State’s Representatives voting for a particular candidate.  He who has 26 States, wins.  (The Vice-President is elected by the Senate, making a  McCain/Paul administration  possible.)  With Sarah Palin as McCain’s running mate, a Barr/Paul Libertarian ticket could get some breathing room.  If there is enough breath to carry that ticket out of the Electoral College, we could be in for some wild times.