Government Controls

MORALITY AND THE LAW CLIX
By Stephen Ellis

GOVERNMENT CONTROLS

To all my dear readers: My last blog will be published for AOL on October 31, 2008. If you would like to continue to read it, it is now available at
http://www.moralityandthelawakanobodyaskedme.blogspot.com/.

To those of you (like myself) who have a fascination with the paranormal, my new blog can be read at http://www.explaininglifesmysteries.blogspot.com/.

Nobody asked me, but…

I’m a firm believer in the capitalistic system. It gives those of us who are willing to work the opportunity to raise our standard of living and become “successful”. In fact, I am strongly opposed to virtually anything that smacks of socialism.

Yet, to cure the ails of our present economic crisis, some very socialistic steps have to be taken: Government has to inject itself into some of our larger, more powerful businesses, and make the people who sit in positions of power accountable to the public and to their country:

McCain said it and Obama agreed: The key to bringing this nation (and many of the world’s nations) back onto a firm economic footing is to resolve the housing crisis. Almost every economist will acknowledge that if the housing crisis is solved there will be a sharp increase in the number of jobs created, there will be a return of confidence to the people who, in turn, will resume buying cars and other consumer items that will start to strengthen our economy. The roller-coaster stock market will stabilize.

Bush’s $700 billion bailout was designed to do just this by flooding our banks with cheap money. The theory is that if the banks are flooded with cheap money, they will be forced to lend it out at low interest rates (with certain minimum standards), and consumer spending will flourish. Granted, the bailout plan has more holes in it than Swiss cheese, but despite its weaknesses, it should work...except…

The Federal Reserve is offering money to the banks at record low rates…1¼%. But the ravenousness in our banks immediately reared its ugly head…and raised mortgage interest rates!

Is there any reason for mortgage interest rates to have been raised? Yes! Greed, corruption and opportunism! Nothing else.

The banks realize that during these tough economic times, a lot of good, highly qualified, people and companies will need to refinance their mortgages to tide them over these hard times. So instead of helping these people out and trying to work with our government to stabilize our nation’s economy, the bankers figure it is a good opportunity to reap greater, unreasonable, profits. It’s corporate gluttony and taking advantage of the public like this that makes me feel that it is necessary to put government regulators into every bank. Yes, it’s socialistic, but until the corrupt and the greedy are made to realize that they have an unshakable obligation to their country as well as to their stockholders, it’s going to be necessary to do this. Industries, such as banking, oil companies, automobile manufacturing, etc., must be regulated to stop the manipulations and private market controls that have seriously damaged our economy.

One problem is that giving government unlimited power over business will only create strong temptations for the government regulators themselves. So, rather than giving business over to government control, what I propose is this: That every major corporate Board of Directors have one or two ex-officio seats on their Board for government inspectors. The reason these seats on the Board should be ex-officio is that government should be allowed to have input, but not be allowed to “vote” on company matters. Ex-officio members should be representatives of the people who will expose to the media and senior government agencies any plans that smack of corporate deceitfulness within these companies. Having government representatives sit on their Boards would have completely avoided the melt-down of Fannie Mae , Freddie Mac, AIG, Lehman Brothers, Enron and other giants who have simply “folded” or sought a government bailout when their dishonesty was finally revealed.

It would also tend to stabilize the stock market because the published reports issued by these companies could then be believed by the public. The Securities Exchange Commission (SEC) has proven itself to be weak, inefficient and easily duped. Having government representatives sit on the Boards of these companies as ex-officio board members would go a long way towards ending the kinds of public deception that got us into this economic mess.

As I said, nobody asked me