Saturday, October 08, 2011

Regulation, A Presidential Cure for the Nation? I think NOT!

I guess if we are going to tar and feather Obama over our hard times, we should probably get it right, on what he did wrong. Our present economic mess has nothing to do with him or his birth certificate issued in Hawaii. His major offense, is in thinking that as President, he can write or dictate our laws and have the Congress pass them. If my memory serves me right, Congress writes the laws, and if they don’t have a 2/3’s majority, the President has to sign it in order for it to become law.

Obama is like a very demanding wife; his way or the highway. Whereas a coy subservient wife gets everything her way indirectly, without the husband even suspecting that he has been manipulated. Obama forced the health care issue through Congress, and now the young get to pay for the health care already promised to the old. You can’t raise taxes in a depression and expect increased revenue. Revenues are dropping even at the current rate of taxation; less and less people are working.

Now there is a call to tax the rich. It sounds so easy and simple. Most of them fill out their own W-2 forms; they can easily hide their earnings. A lot of wealthy people donate to charities and get a tax deduction. They have a choice, give it to the government who will waste it (that's a personal opinion), or give it to a charity and appear to be magnanimous. Look for this loophole to disappear.

Let’s step back for a moment and examine where we are. As a country, we saved nothing for a rainy day. Congress spent every dime collected; they even spent our Social Security funds. Our nation has fallen on hard times caused by economic pursuits that were designed to fail because of human greed. We probably can cite Congress for enjoying the party while it lasted; they were asleep at the switch. They couldn’t afford to pay for infrastructure when times were good and now all of a sudden, it seems like a good idea when the country is broke. Its kind of like having no money to feed the kids and wife, but having 50 dollars for the hooker next door.

Obama’s latest way to save the taxpayer is with more government regulation. The neat thing about this is when you create government regulatory agencies, they get to enforce regulations they feel are necessary without the need for further legislative approval.

The latest idiotic piece of government lunacy revolves around debit card charges. Here we have the Consumer Protection Agency telling banks what they can charge merchants accepting the card. All of a sudden it’s against the law to make a profit? The net effect, Bank of America raises debit card fees $5 a month. Everyone thinks this is outrageous and something needs to be done about it. If you read between the lines, B of A doesn’t want to mess with debit cards anymore. It’s unprofitable for the bank, the customers who use them, are living paycheck to paycheck. It’s a little like what Sprint did when it dumped customers who called the help desk too much. 60 percent of the help calls were from 5% of its customers. B of A won’t lose a dime on the customers who walk.

Government regulation is killing this country. Our captain at the helm is going to save us with more Nazi rules and regulations. It's "full speed ahead, damn Congress and the National Debt." It's a little like a hooker offering customers pills to prevent AIDS. Business couldn't be better. The customers like the added "protection." You kind of have to wonder, how dumb is dumb?


Anonymous said...

We're all on a runaway train that is gathering speed. When it hits a sharp curve or the end of the line it is going to be a monstrous crash. I'm hoping and waiting for an opportunity to jump off into some soft patch or a river before the crash.

Might need to learn Spanish. Argentina is becoming more and more appealing to me as the months go by.

Shift said...

We had a choice a few years back: Let the market take care of the financial mess, OR step in and create "too big to fail".

Once the free market was circumvented, the only way that the banks could be held accountable was regulation.

A person can try to spin the situation many different ways. I will find it interesting to hear an argument where market forces being circumvented does not require more regulation.

There is cake, and there is eating of that cake. The to-big-to-fail bankers want both.

Anonymous said...

You made my evening with two hooker analogy in one note! I love the way you make your point. As always, enjoy your posts but with this kind of entertainment I had to chime in.

I will share how dysfunctional things are in New York around regulations. State wants to create jobs so they are promoting Natural gas drilling which will involve Fracking, (wrong venue to debate the merrits of Fracking) through a 1,500 page regulatory document, with 60 days to review and comment. So, while the State and the President are trying to create jobs, pink slips have already been issued to 1,500 State workers effective 10/19/11. And I thought we had a Democrat for a Governor.

2Rational from Lima
PS: I think of you every time I visit Pittsford.

Jim in San Marcos said...

Hi 2Rational from Lima

Thank you for the compliment. I guess I must have mentioned somewhere in the past of being from Pittsford New York, I haven't been back since 1974. Lima isn't far away from there. I can't figure out where they are fiddling with NG gas fracking. Naturally it probably has to do with the oil shale areas, great places to go camping. I remember a frying pan filled with bacon taking a 60 foot leap in the air at our camp site. Oil shale can be very explosive. We need to sic an environmentalistic Nazi on them.

I think you will see more state workers given pink slips in the coming year, plus the real estates foreclosure mess in NY is starting to wind through the court system there.

Jim in San Marcos said...

Hi Shift

I agree. Its a little like building sand castles at the beach. You need wet sand to build them. And when the tide comes in, you make an effort to save your creation.

The tide will win and we will build again. Financial markets presently seem oblivious to this cycle.

Jim in San Marcos said...

Hi Anon 11:59

Your on a train, I'm on a boat. Do we issue tickets for life boat seating or do we try to uncouple the Caboose from the rest of the train?

The analogies kind of work, but what is about to happen will only destroy bank balances. Everything else will remain intact. Of course, that's not what people like me, of retirement age want to hear

Anonymous said...

Jim --

When you say "what is about to happen will only destroy bank balances," are you referring to inflation or something else?

Anonymous said...

Jim in San Marcos said...

Hi Anon 12:49

In the past when there was a run on the banks, your money went "Poof." This time, there is no need to withdraw it, it is guaranteed by the state. The problem is, you can't print product, only dollars.

As long as most of the money is kept in the banks, no problem.

When you start to have serious withdrawals, that when the problems arise.

The money is there, what it will buy isn't. It has already been bought by government spending.