POOR RICHARDS REPORT
Chapter 20
Sins of our Fathers Continued…
Money, whatever form of currency, is the most delicate commodity on this planet. It can corrupt, cause envy and crime. Looking on the positive side, it can also create wonders beyond our wildest imaginations.
Therefore societies should use a tight rein on persons who deal in money, yet hold them in the highest respect. They can be used like the Levi priests in the Old Testament. Guardians of the Testimony or Temple, they were not allowed to do priestly duties. Today, because of the internet, we must reward and control our banks in the same way. They have control over the monies and how to invest, but have no power. They must report to a senior committee and we must figure out checks and balances in the banking structure to maintain a bipartisan business atmosphere. Their play should be determined by how well the bank does. There should be two banks in each community and the citizens of that community should have the ability to choose their banker.
Bank’s sole business is overseeing and making loans, period.
The Congress should revisit the Federal Reserve Act of 1913. Namely to redistribute the 12 districts to size based upon equal assets and population. A lot has changed since 1913. The Federal Reserve Bank of New York shall remain intact because they are the ones that deal in foreign transactions.
Members of the Federal Reserve System shall not belong to a political party nor support any. They are to be bipartisan. Each district shall have two major banks that have the ability to form syndicates and bid on various financial instruments.
Bankers should have a degree in economics or accounting, plus minors in other fields of endeavor, to make sure the individual has A WELL ROUNDED EDUCATION.
As we advance in age and ability and hopefully wisdom, we must continue to revisit past laws to improve them. A prime example is The Investment Company Act of 1940. The computer and telecommunications have given the mutual fund industry obscene profits at the expense of the individual shareholder. Plain and simple; it is a legal rip off.
Now to tackle what the press calls “banks” but really are dressed up brokerage firms and old fashioned “bucket shops”.
There is, and always has been, no way to properly pay the individual broker except one way.
That way is to make all firms partnerships. Then each partner is responsible how well his division is doing. Those partners then keep an eye on other divisions. Everyone is then paid a flat salary where they have the ability to live well, but not beyond their means. They may not trade in their own accounts or related accounts.
The partnership must maintain a capital expense ratio and insure financial liquidity. They should have a reserve account based upon 50% of assets. After this is all done the excess funds may be distributed to all employees based upon performance during the year.
Under this system employees will keep watch on each other to make sure no one is “gambling” on his or her potential bonus.
Brokerage firms that are publically traded become very aggressive because they are taking risks with shareholders monies – not their own. I knew brokers who kept all their assets in US Treasury Bills. That is the other extreme.
We must find a way to control lobbyists. These monster bills that are over 100 pages are the result of individual congress persons accepting some form of bribe from a lobbyist to insert a clause or amendment to a particular law.
Bribes come in the form of money, sex, blackmail, or threats. This is a problem that has plagued mankind for ages.
A true democracy occurs when the minority is listened to respectfully with the intent to implement their views if possible with the majority. This possibility lessens the intent of bribery. Once a bribe is found out it can never be enacted or done.
These are just a few problems we face today that must be enacted upon countries’ governments. The financial industry must face this or we will re-enter the dark ages all over again instead of evolving into an educated and caring society that can safely explore all the great unknowns.
R