Regulatory capture: The hands that tighten the banks noose

Everyone can sense that we are at a critical juncture in history. It is not often that the foundations of society are available to be greatly influenced. Generally, that is an acceptance of the status quo with only minor adjustments. In these times only the most vigilant rally to perfect the system, everyone else is resigned and are not inclined get involved. Elections, conflicts and now the economy are on the tongues of even the most passive as devastation engulfs the entire globe. At the apex is a perfect storm of policy, governance, greed and corruption. Politics of fear to feed the greed in a conflict for a commodity and to enrich arms manufacturers. It cannot be overstated that the sheer cohesion of powers combined against humanity is a massive foe. What is the fate of a disparate global public against powerful combined interest of global corruption?

Right now we are facing the expansion of a commodity bubble. To find relief from the problem, you need to first find the source. The damned speculators--people getting rich on the bet oil will go up and constantly driving it up to enrich themselves. Banks and governments say that they are powerless against these gamblers, thriving at the publics expense.
When you scratch beneath the surface you will find that most market speculation is dominated by the banks, industry and government. It actually makes sense, since government and industry would be the vested party's in any market.
Yet they offer us this faceless whipping boy called speculator. Government has blown oil prices on everything from production to storage. It lets the oil giants strong arm smaller governments into selfish deals then profit when the people retaliate by destroying a refinery or pipeline. This exercise in absurdity is the case from the Nigerian delta to Iraq. Then there's Venezuela an Iran, two large oil producers being constantly antagonized with western governments working in collusion with oil giants to guide policy, these countries are living on the cash of their oil while flatlining the u.s. currency. Chavez is winning his battle with Exxon and the attempt to starve Iran into regime change has the American people starving to change with a president who has the lowest approval rating ever. The public had no say in the central bank bailouts but white house resident bush doesn't want the taxpayers to spend billions rewarding speculators. There's that word again so to be clear let's define speculator in this instance(markets) a speculator is an investor who will never take delivery of the commodity. This is to say that brokers on the exchanges who purchase wheat, oil, sugar etc never expect a truck to arrive at their homes to deliver 50 tons corn.
In the mortgage market these securities where bought and sold by people who had no idea where the homes where or who bought them, they only looked to profit from the payments made. Those people have been spared the worst case by taxpayer backed interventions into the markets, though they are the only true speculators(along with the banks and brokerages who packaged and sold it). The so-called speculators that governments are refusing to assist are people who may have purchased a second home hoping to rent it out for extra income. Some chose a home that they considered a bargain and planned to invest in it to sell it at market prices. MOST examples leave you with people involved with the individual sell and purchase of a property. Refusing them the same deal as the ACTUAL speculators and pointing at them having to give up on a property is criminal.
So here we are, time to talk tough. With no serious review the fed has been able to put the taxpayers on the hook for hundreds of billions. The oil giants like the banks laugh off government grandstanding. What government can reign in Citibank, shell and haliburton at the same time? Regulators have a job that is born in conflict, to advance the industry against global competition while guarding the public trust. It's stupid on the face of it, how can you be vigilant in restraining someone that you are obligated to advance? In an ideal world a strong national banking industry would be best for the public. What has happened in practical terms is that banks are protected from the public and are sacrificed for the greater banking "good". Every step of the way, agents for the public discuss changes with the banks to get cooperation and what always comes out of it is a threat from the banking industry. The threat always gets the headline to strike fear into the public. Currently and new regulations would force banks to tighten credit and call loans AND raise fees and... Basically they're going to rob the public and all regulators can do is agree to HOW. Every time the grandstanding fades from the headlines and in the backrooms the deal is the same. Generally they will be able to come together to blame a faceless entity and make firm regulations to block competition with something like wealth based licensing or cash minimums. This protects the public from new entrants who become the problem and further erodes the power of the public.
The laws that come out of these conspiracies against the public all look the same. The wording is some catchall like fraud or licensing that allows regulators grand sweeping power to rid the markets of new competitors. Scammers, spammers and crooks are paraded out to look effective, while the big culprits benefit twice, once from being overlooked and the second by getting rid of competition without spending a dime. When you go to government sites and read what to look for when it comes to fraud, there isn't a bank on earth that could escape the definition but they can escape enforcement. They bury terms in contracts, change conditions among other things and use the law to their advantage. When you signed the documents, the disclosure was there, in legalese, in small print on the 8th page you signed. They send you a letter to inform you of a rate change, now that you are well in debt, the law requires them to give you 30days notice to pay them $20k in cash so that your balance isn't calculated at the new tripled interest rate. If a new competitor employed these tactics every media organization, court and enforcement agency would tar them with fraud without a hint of irony.

Every year it gets harder to bring a case against a major financial institution, while fees and deceptions bring in larger profits. Bankers associations are huge campaign donors and are a strong lobby. Regulators and politicians come out of the industry and people from the industry are chosen to be regulators. Two countries in north America ruled by one brokerage. Goldman Sachs alumni Mark Carney (bank of Canada) and Henry Paulson (treasury sec. USA), they should find cooperation with each other and the industry. What's better is neither is a regulator, they simply set the tone for regulators and act as industry surrogates. Incest between industry and government is nothing new. Top executives are always considered the experts and receive government posts with industry endorsement as an inside man. Very few politicians don't see public service as a stepping stone to lofty positions in industry they expect to peddle their knowledge and relationships to the highest bidder.

What can be done. Yes, media, government, activist, public and academia have all taken turns decrying the woes of the common man against greedy industrial interest. Fortunately I am not a professional belly-acher but a visionary pioneer. While others picketed, petitioned, plead, and published I imposed aid4families. In that spirit, here are a few changes that may help. Pick one: government service or industry but not both. With no incentive of cushy jobs after they leave office some politicians may actually focus on their job. Of course people still have to eat so a set time limit should suffice if a person chooses to leave public service. This is a very specific example, whereas the things that generally make it tempting are stripped away. If you serve on the banking committee then you would be barred for no less than 5 years from holding any board or position with interaction with regulators or government. You could be a branch manager or in accounting or IT at the bank where you can comply with regulations but not influence them. If you come from industry, you may not serve on a body that regulates your primary industry. The spirit of these proposals is the important element, the details can be hammered out. Create a jury duty for important government regulations. A basic trial can be held in court in the evening where the pros and cons are argued. The concerns and finding by the jury would be addressed at a public hearing for approval by the government. Finally, like all things, enforce the laws on the books biased enforcement have caused this carte blanche with the industry and banks act as co-regulators, holding funds, reporting competitors etc. The government wouldn't invite drug dealers to draft drug dealing policy, they simply draft consequences and enforce them. The government has to become more than just the PR department for industry interest groups. The government is not there to force the public to yield to industry greed, the role of government is to make sure that industry works for the public. We need to not just fear STATE RUN INDUSTRY but an INDUSTRY RUN STATE!


These reports about industry are from the imf, sec and media, I know how you like it when they tell you.

http://www.imf.org/external/pubs/ft/wp/2006/wp0634.pdf



http://www.nypost.com/seven/10312007/business/sec_eyes_goldman_sachs_good_fo.htm

http://www.deepcapture.com/category/3-regulatory-capture-the-sec/

http://en.wikipedia.org/wiki/Private_Securities_Litigation_Reform_Act

It's going to be better in the good old days!!

Reason 4.5 A world safe for democracy and hitler


As an indicted person with the government attempting to go all hiroshima on your divine rights, you get to review what protections you actually have in society.

Yes, divine rights, in the u.s. they say "endowed by the creator (and or darwinism)with inalienable". This is a long-winded way to say that the government will be on a unrelenting mission to steal your freedom on behalf of various interest to allow others to run amok(my explanation is actually more long-winded:). Neither slavery nor involuntary servitude shall exist in the united states: it says but wait... EXCEPT AS PUNISHMENT FOR A CRIME. This means, wait for it.............SLAVERY IS STILL LEGAL! That's a beautiful loophole, that has been used to banish more people(and per capita)to bondage than any other nation rich enough to not have to. Hitler would have brought peace(eventually)no tyrant in history has wanted endless fighting, they just want to win first. Once you're in total submission you are free to live in peace but as a defeated group it probably won't feel very peaceful.

The jews weren't rounded up, they were actually asked quite politely to leave. They were offered relocation and received fabricated letters from loved ones saying "come on in, the waters fine". Hitler distributed propaganda reminding blacks and africans that they were fighting for their own oppressors. His mistakes were of course, fighting in africa, russia in winter and immediately declaring war on the usa while it was still reluctant to fight him. So when you mix your actual rights with only minor differences in the outcome of world war two, then you will notice that liberty is much more fragile than one might expect. There were no nazi's just people dispatching their military to remake the world in their own image (and WE defeated fascism?). The german public whipped into a frenzy of encroaching danger and humiliation at the hands of their enemy decided the only way to be free was to dominate. This of course led to greater humiliation and submission to it's rivals. That 1 watt bulb is starting to flicker in your head.

If fascism and slavery are alive and kicking, then what freedom do you ACTUALLY have? Actually is the important part because it means that you can't wake up and find it gone tomorrow? Of course this is canada, not germany or the USA, so everyone is free? Canada doesn't offer any protections. In fairness the canadians have only had say for about 25yrs (1982). So they haven't wanted to write down too many things before they secure their own place in canadian society. The constitution and laws are a mix-matched quilt of french and british with a few new things tacked on to look independent. Since most canadians were around in 1982 (and 1882, get it? because the canadian population is old)canada is like an adult child who has moved away from it's british parent. The country still takes pride in england, with the queen on the money and everywhere else(courts, supermarkets, strip clubs). The U.S. is of course the brother who left home at 15. The american bill of rights is a laundry list of rights to own guns and shoot anyone who tries to take them. It took another 70+ years and a bloody war to partially refine slavery and then another 60 to get to women suffrage. Guns = amendment 2, paid slavery amendment 14 and oh yeah women amendment 19. The canadian system like the american one does say you kinda have even more rights even though they aren't enumerated but in practice it's hard to enforce the ones that are. The differences come from history, where america fought a bloody war and wrote the bill of rights as a F-you, the canadians kind of slid into freedom.
Are wars always labeled noble quest? Generally, the american revolution was about taxes, so it actually could have been worked out and a lot of people didn't appreciate the anti-english rants. The civil war was about labor, half of the north didn't want a freed black population coming to compete for jobs, the same area was flooded again as european immigrants came by the boat loads 70 years later. Again the issues remain contempary, immigrant labor, wage stagnation, working conditions, worker rights, taxation, and slave workers keeping production cost low. Your freedoms are endowed by the creator and are inalienable, they are not to be doled out by any society. Societies controlled by the interest of the day, will constantly look to abridge, circumvent and downright steal your rights.

Since I am in my prime (old and young at the same time: with the body of a god and just enough grey to look...distinquished )it means I am still young enough to speak and act with moral imperatives and still not old enough to think that things can't change for the better. I am too old to lash-out through crime or violence from frustation but young enough to not take no for an answer. With mandela free, a Mlk holiday and the end of the cold war, my generation may have believed that there was no more fights for freedom and justice, we would be wrong. the oft cited poem sheds some light: "First they came"
In Germany, they came first for the Communists, And I didn’t speak up because I wasn’t a Communist;

And then they came for the trade unionists, And I didn’t speak up because I wasn’t a trade unionist;

And then they came for the Jews, And I didn’t speak up because I wasn’t a Jew;

And then . . . they came for me . . . And by that time there was no one left to speak up."

This poem credited to a reformed nazi, reminds us that the prisons can be full since it's those people in the city and let's build them around the world and skip due process, since neither type profile me. I didn't get my shiny pantsuit or flying car because I didn't know about contracts and production means as a child would stiffle innovation. People have nostalgia for the past always remembering a simpler time, while we keep hope for the future to lift the burdens and yokes that cripple the present. So the truth remains: It's going to be better in the good old days.

when you miss me check out my new topical UK blog at
http://my.telegraph.co.uk/aid4families