US Elections A guidebook for the new Congresspersons for January 2011
The LORD abhors dishonest scales,
but accurate weights are his delight [1]1
Congratulations!
The American public has made its choice by electing you to this public office with a mandate for the common good.
At the time of this writing it is believed by most pundits that the Republican Party will enjoy an unprecedented election victory. It is my belief that the public is fed up with all politicians in Washington and have engineered a change in philosophy and representation.
While the media is trying to figure out which party is in control and whether one is liberal or conservative – the real party in control is you and your fellow first term Congresspersons.
You and your compatriots have an opportunity to right the wrongs of decades. By banding together you can take over all committee assignments and chairs in the House.
This can be done easily by electing the speaker who won by the biggest majority. The committees will be made of persons elected whose professions match that particular committee. That way we will have legislators who know something about what their committee is all about. The House controls the funds of the government, period.
In the senate there will be 67 remaining politicians and maybe a few reelected. The freshman senators still control the key votes. Acting as a group unified in purpose you may be able to co-sponsor key legislation with the house.
To emphatically let everyone know you mean business your first rule is that all lobbyists will be banned from the halls of Congress. Any lobbyist caught conferring with an elected official or members of that officials’ staff will have their tongues removed. This is not funny. This means that they would have to put everything in writing.
No former politician or members of their families can be a lobbyist for 10 years after they leave office.
The Congress shall adopt laws similar to those passed in the State of Florida. They are called the Sunshine laws.
The Congress shall repeal all the laws passed by the previous Congress. If vetoed by the President and failed to override, then the house will withhold all funds for those programs.
Honest scales and balances are from the LORD;
all the weights in the bag are of his making.[2]
The cures
Our society and the world at large has become enamored by great wealth; it did not matter how it was made, what mattered was how much.
When you have a garden that you have nurtured from early spring, you are constantly pulling out the weeds that could over take and control your garden.
Our financial weeds have grown so large that they compete with the government and even our financial system. Our financial markets are controlled by a few greedy men that have enormous power. Their exercise of these powers can be seen by the thousands of pages that have been passed by the congress without most even reading the bills they voted on. Shame, shame. The public wins!
Hedge funds were started or became popular during the 1960’s as a way to circumvent the strict rules passed in the 1930’s. These funds operate for the rich only and should be allowed to wind down and closed. The public wins.
The Securities Act should be strengthened and the toughest and finest in the whole world. This will let everyone know that their funds are safe here in the USA. Nations that do not comply with our laws will not be allowed to trade in our markets. The public wins.
The Federal Reserve should be allowed to be non partisan. Margin rates should be raised across the board. Excessive margin accounts should quietly called in. This can be done by the Fed quietly raising a particular banks reserve requirements. Margin loans for securities trading in US markets must come from domiciled banks in the US. Failure to so will mean immediate liquidation and confiscation of securities. They may be purchased back at a public auction. This system has worked for hunters and fishermen for generations. The public wins.
Install usury rates for all lending institutions. One of the main reasons for our deflation is that the public in paying down their debt. The high interest rates make it almost impossible to pay down the principal. This does not encourage business expansion. The public wins.
Ban all securities from nations whose governments are dictatorships or communist in nature. Where a central government controls how business is done – all decisions are political with little attention paid to economic consequences. The shareholder will be the ultimate loser. The public wins.
Try to have Fannie and Freddie disbanded. This can be done by having the mortgages returned to the originating bank. The local banker is the best judge of who qualifies for a loan. A certain percentage can be set aside for low income families who need assistance and show a positive mental attitude for self improvement. The public wins.
Make English the official language of the United States. The Province of Quebec Canada is a prime example. Quebec used to be the leading business area of Canada. It has everything. Today it is a second class province. Bilingualism does not work. If you get caught speeding you better know their French. Not France French. When Charles De Gaulle came over and spoke to a huge rally no one understood a word he was saying. .
If 10% of a society only speaks one language, then the other 90% avoid doing business with them and all sorts of biases are created. It is an unhealthy atmosphere. The final point is that with the rest of the world – English is the preferred second language. The public wins.
Commodity traders should be left to the participants of that industry. Traders who are not business people of that profession are called speculators. I can not think of a better description. Speculators should control no more than 10% of the yearly average trades.
The investment company act of 1940 should be revisited. The computer has antiquated most of the laws and the “loaded” funds are raping the public. The public wins.
Differing weights and differing measures—
the LORD detests them both.[3]
If a second stimulus bill is needed it should go to every U.S. citizen 18 or older with a mandate to be spent. All debts should be paid down on principal only. Interest is forgiven during a “quiet” period. This way banks and lending institutions are re-liquefied. This includes home mortgages. 10% can be saved, but excess funds must be spent on anything they feel they need. Corporations that neither do nor survive after the money is spent are allowed to go into bankruptcy. It is called creative destruction. The strong parts will survive, but the week will go bye-bye. The typewriter has gone and been replaced by the computer. IBM was a leading producer of the electric typewriter, but its superior management changed direction. The public wins.
The government should set the rules, and persons caught breaking these rules should be severally punished. This would include the immediate family so that a spouse can not set up the other with illegal gains. The public wins.
In certain industries out side attorney can be hired to try cases on a fee basis where a portion of the fine could be shared by the whole department. This would scare the hell out of would be cheaters.
Flash Trading- This when a computer scans the financial news releases and seeks special phrases like positive earnings, or a certain percentage increase of decrease. Upon spotting these prescribe phrases it immediately sends an order to buy or sell hundred of thousands of shares instantaneously. Shades of 1984! We need to put a financial condom on those babies.
To bring back a true investment attitude to the markets we should institute a short term trading tax. For started, say 90% for securities held less than nine months. Long term holdings would have a 10% capital gains tax. No tax-loss carry forwards on short term trading losses. This will bring back thinking with one’s mind to Wall Street.
Drop the decimal trading system. All that does is encourage gambling and day trading. It allows firms to het paid for their research. Corporations should have access to research analysts. THE GIVE AND TAKE BETWEEN ANALYST AND MANAGEMENT allows them to fine tune correct rearing. No corporate officer of a major corporation can predict accurately what they will earn a year from now. The give and take between officer and analyst allows them to form a consensus. “You are a little hi there a little low here”, allows them working together to fine tune their reports. The public wins.
Richard C De Graff
[1] Proverbs 11:1 New International Version (NIV)
[2] Proverbs 16:11 New International Version(NIV)
[3] Proverbs 20:10 NIV