• Political Campaign Funding – A Democracy’s Dilemma

Tomorrow, the Supreme Court will hear arguments on the constitutionality of the restrictions that have been placed on corporate money in politics. The ruling may be one of the Court’s most critical decisions in an age which has seen one Presidential campaign accumulate almost a billion dollars in contributions. When the constitutionality of any far reaching federal law is opposed, it is a matter of national relevance, however, when a law affecting the foundation of the Democracy is challenged, such event should be arousing everyone’s notice and should be at the forefront of all news media outlets.

The case in front of the Supreme Court, Citizens v. Federal Election Commission, revolves around a documentary called “Hillary: The Movie,” produced by Citizens United. Based on Hillary Clinton, the film was banned for violating the McCain-Feingold bill which requires disclosure on funding sources, and stipulates that neither corporate or union treasuries can finance any “ad” pro or con just before a primary.

The 2002 Bipartisan Campaign Reform Act (BCRA), also known as the McCain-Feingold bill, was the last major piece of legislation passed to control the source of financing for Federal political campaigns. The bill eliminated soft money donations to the national party committees, and restricted the funding of political pronouncements, ads, etc., by corporations, or organizations such as unions and non-profit organizations.

The arguments and presentations beginning tomorrow in front of the Supreme Court, will address a question all voters should take a stand on. Are your rights to free speech the same as the rights of corporations or organizations? Corporations and organizations are not individuals, they do not have the inherent rights of the people, nor do they have the same privileges. They are vehicles created and used by society for diverse purposes. Voters should seek to minimize their further influence on the political process and on the political landscape.

You will hear and read arguments whining that the government is treating organizations big and small, unfairly by prohibiting election advocacy, and is in effect imposing censorship. Some suggest that such treatment of organizations provides them less protection in the eyes of the law than is provided to individuals. The suggestion that organizations should be equal to individuals under the law twists the interpretation of the Constitution beyond common sense, and ignores the fact that current laws provide organizations with rights and privileges not available to individuals. Let’s not let anyone convince us that organizations are “persons.”

You will also hear that the media companies have no restrictions on their election leanings, or that restrictions do not apply to them and should therefore equally not apply to other corporate entities. While it is true that media companies have been given a pass on their ability to “manipulate” opinion, this is not a persuasive argument for overturning laws that in themselves do not go far enough in the restrictions of campaign finance.

The First Amendment of the Constitution explicitly prohibits Congress from infringing on the individual’s freedom of speech (other than inciting government overthrow), and as we long ago learned, free speech is a great freedom, but is not so “free.” While you may be able to shout your ideas, demands or wishes freely out your window to the extremes your lungs will allow without bursting, you will not achieve the reach that well financed organizations are able to affect as they shout at you through your invasive televisions.

This court decision revolves around financing free speech, but at its heart is the impact the decision will have on ability of organizations to influence voter perception. Organizations large and small already have too much influence on the electoral process. Corporations and labor organizations already impact election outcomes through such vehicles as Political Action Committees (PACs), or through the doors of political party organizations. We should note that the billion dollar campaign which carried Barack Obama into the Oval Office could not be audited by the Federal Election Commission (FEC) because the task was too onerous. Do not believe the pretense that the FEC is a watchdog, or does its job of monitoring campaign contributions, much less where and how the money is spent.

Allowing entities to finance the formation of perceptions, places a vast amount of power in the few hands at the helms of those entities, far overreaching the capacities of their “rank and file.” Politics have always been and will always be subject to self-serving influences. As wealth concentration continues unabated, effective control of the political process has already been skewed away from the average taxpayer. Simply put, the CEO of Goldman Sachs reaching into the company coffers has access to more money than you do to impact the outcome of an electoral campaign, and it’s not even his money. Neither shareholders, nor his employees, have any say on the candidate receiving the CEO’s largesse.

Some alternative legislation should be considered, including anonymity of donations, capping personal contributions and matching them with government funds, as well as eliminating all corporate and union political contributions and related loopholes. Beyond cleaning up the abuse of the process, this would bring campaign funding and spending within realms that might foster the advance of alternative parties to the political game on the national stage.

Should the Supreme Court overturn years of tested law in favor of corporate and union spending, it will relegate the taxpaying voter to that of second-class citizen, and insinuate a gigantic crack into the democratic process. No matter what the Supreme Court decides, the voter should take a stand at the poles with facts rather than with the prejudice of well-financed and influential rhetoric and advertisements.

High definition cameras bringing the drama into public consciousness should invade this upcoming Supreme Court hearing, and educate voters on the fundamental process none can take for granted. A Democracy is a very fragile environment demanding fastidious nurturing. “We the people,” was never intended to mean, “We the corporations and unions.”

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• America, End Your Fear Of Wall Street

Few Americans have the time to educate themselves on the operations of those who control the most critical elements at the heart of the Nation’s well being. The Kings of Wall Street have long coveted the absolute supremacy they now enjoy over the largest economy in the world. Their road to ascendancy has been long and methodical, but with the collapse of the mortgage and equity bubbles, the past year’s actions by those pillars of persuasive absolutism on Wall Street confirm that their dominance is unprecedented in American history.

A vast majority of Americans must have been astounded by Bernanke’s recent response to Congress’s request that the Government Accountability Office (GAO) audit the Federal Reserve’s financial transactions and assets. The following was the heart of Bernanke’s response, “… auditing ... would be highly destructive to the stability of the financial system, the dollar and our national economic situation.” The GAO is a legislative branch agency organized under the U.S. Congress. How is it possible that Bernanke would have had the guts to tell Congress to go fly a kite? This is the same Federal Reserve whose power Obama wants to expand? Does he really have a good grasp of the true nature of Wall Street and the functions of its insiders? Perhaps the $14 million he received from Wall Street bankers, investment firms and securities brokers during the election campaign are clouding his perception.

Bernanke not only screamed an emphatic, "no," but he had the gall to threaten Congress and the American people with economic destruction. How is such arrogance and power remotely possible? While it might be tolerated if coming from the oval office, it should not be tolerated from a banker. It is also, for anyone who is watching, an obnoxious affront to the Constitution as articulated in Article I, Section 8, “The Congress shall have power to … coin money, regulate the value thereof, and of foreign coin, and … to borrow money on the credit of the United States.” Does this resemble anything we have witnessed during the past year? Not remotely.

Through a century of market ups and downs, interest rate fluctuations, mergers, acquisitions, political influence, lobbying and positioning insiders to the most powerful government and government related institutions, the Kings of Wall Street have nurtured and advanced their isolated power to a point where they are responsible to no one. After the Fed created hundreds of billions in bailout dollars to purchase unaudited toxic waste from its “friends,” these same friends paid themselves billions of dollars in bonuses. These were billions more than the amounts they distributed to their own shareholders, and the rationalizations were as asinine as the bonuses. Obama’s wishful thinking and promises of “oversight and transparency,” over trillions of Fed dispensations, have long been attenuated by the dissonance of fear. Stating that the Fed and Wall Street’s autonomy is complete, would be a gross understatement.

When Bernanke told Congress and the world that if AIG was not bailed out, the international economic order would come tumbling down, did the majority of his listeners believe him? Absolutely. Panic was being incessantly pounded into the public’s consciousness. Unless a handful of senior players from the banking sector didn’t get their way, the underpinnings of the global economy would disintegrate, and the world as we knew it would come to an immediate halt. Paulson chanted the refrain, and shortly thereafter so did Geithner, whose performance made sure that the message was delivered with the requisite amount of perspiration and earnestness accentuating the urgency. Above all, he underscored the fear.

Individuals, who could not care less about the health of America, just as they never cared about their firms’ clients, control the economic engines of this country. Their egos dictate their actions, and satisfaction of abnormal greed is the compelling priority. The details of the business, and its legalities, … be damned. Have we forgotten that when Lehman Brothers collapsed overnight, no one knew there had been a problem? None of its executives were familiar with the extent of the calamity when it hit their firm, nor did their books indicate where assets might be hiding or what claims might exist against them. Transparency? Due diligence? Forget being a shareholder looking for information since the senior executives, the CEO and the Board of Directors were oblivious. Was there any conscious human being near the top of the Lehman ladder who cared enough to raise doubts? Would he or she have been listened to? Not likely.

When you are too preoccupied picking out the leather for your new executive jet, or refurnishing your third mansion in Cap D’Antibe, you don’t have time to spend on corporate incidentals such as the details of an audited financial statement. Even if there had been a spare moment, you’d have to fly to that Bridge tournament in Chicago, … or some other urgent pastime where your “friends,” or your ego expect an appearance.

There is a culture of omnipotence that has been very pervasive throughout all of Wall Street’s major firms during the past two decades. It has reached a level of absolute and supreme potency within a few of its more majestic mindsets like those at the top of firms such as Goldman and Morgan. These firms have by design created complex webs of interwoven corporate entities, crossing geopolitical borders with questionable practices beyond the boundaries of laws and oversight. Theirs has been a comfortable ride, since there is no will on the part of any government to provide intrusive oversight to the investment banking giants, therefore effective oversight is simply an ephemeral, wishful thought on the part of a cornered public.

The Morgan Stanley acquisition of Bear Stearns with a $30 billion taxpayer guarantee was a sweet gift handled between the boys, with little evidence of hard-nosed negotiating on behalf of American taxpayers. Obviously, reasonableness also never entered the room. Bailouts for Citigroup, AIG, Bank of America, Citigroup, and AIG were negotiated between friends, some friends only pretended to be working on behalf of the American taxpayers. When Treasury, The Fed and the heads of the major Wall Street firms, particularly Goldman Sachs and Morgan Stanley, came together to make deals, their actions were not “negotiations” as defined in any normal dictionary. Who really represented taxpayer interests? No one. The Third Side, the taxpayer who will foot the major risk, was not in the room. Not only were taxpayers not in the room, but they were also swindled. There is no other way to describe the one sidedness of the structures that taxpayers were handed.

Taxpayers recapitalized banks under insanely bad terms and conditions, where they unwittingly guaranteed toxic asset, as occurred in the Citigroup bailout or when B. of A. acquired Merrill Lynch. Did anyone question B. of A.’s use of TARP funds to “acquire,” competitors? No-one representing taxpayer interests seemed to care, and quite to the contrary, Merrill’s losses were purposefully concealed from both investors and regulators. Did anyone negotiate hard with these banks, B. of A., Goldman and Citi, when as creditors to Chrysler, they forced its destruction instead of allowing the government to provide it with deals as sweet as the ones they had received themselves? Not much. Geithner and Bernanke were evidently not close friends of any Chrysler executives or employees residing in Detroit. They were, however, friends and colleagues of Wall Street.

We have written elsewhere on this post about Too Big To Fail, however, with the taxpayer’s willingness (through inept government) the crisis has created ever-larger monsters on Wall Street. America’s vast banking system has become weak and remains weak other than for those at the top of its food chain. The controlling players have not changed, and the economic contraction will continue. We have become numbed to the fact that when banks fail, the public pays. A few companies, under the aegis of a small band of individuals created the perfect environment for the implosion of the banking system through massive risk taking. Congress cheered actively from the sidelines. The Wall Street hands that were in large part responsible for the crisis now dictate government actions, and have effective control over the public purse. In the meantime, the Fed, standing squarely on the backs of all taxpayers, is doing the job of large banks that still refrain from injecting credit into the economy.

While megabanks trade publicly, there is a dearth of verifiable, or incisively auditable value that can be placed on them since it appears none of their executives know the extent of the worthless paper lurking deep in their bowels, and none of them would tell you if he knew. Admitting the size of the toxic assets would require enormous write-downs, and would affect their bonuses as well as the values of the company shares.

We should not get swayed into believing that Too Big To Fail is simply a remote concept dealing with enormous corporations with global reach. Too Big To Fail refers to individuals at the top of these financial giants with all of the substantial power that the companies they manage can wield. Too Big To Fail encapsulates the stupidity that brought the world to the brink of collapse. We are just a couple of mergers away from a global financial power that will be impossible for any government to regulate, although regulation already seems nonexistent for any of the current top players on the Street.

The markets are technically driven and managed by systems that maximize profits for those who control them, using technologies that very creative talent produced. There is no ceiling to that creativity, and no end to what might be done to restructure the financial underpinnings and superstructure of the nation’s economy. The talent is available, and all that is required is willingness to do so. Constitutionally there are possibilities, but relinquishing control over money is not an alternative Wall Street will readily agree to, yet, reversing the process is within the purview of Congress.

The key to minimizing the future damage that the kings of Wall Street might further inflict on the Nation is to bring their power and influence into the realm of reasonableness. This means bringing their propensity for size to within reason for any organization involved in pure “banking,” and focusing their attention to providing large and small companies with the services, particularly credit, which they require to remain open for businesses.

There is a lesson to be learned from the current debacle, while the window remains very clear, and before time and retrospect blur the current reality into a distorted sequence of lies as the months advance. In order of priority, the following should be considered for a sound America going forward.

1. Take back control of The Fed. Humans will be human therefore there are no guarantees that the people’s representatives will act with foresight, however, they will accountably serve under the canopy of transparency, and due diligence, rather than submit to the beck-and-call of those whose billions in annual bonus money stagger the imagination.
2. Take back control of money.
3. Segregate “Banking,” from “Investment Banking,” and everything else that seems to attach itself to the once-upon-a-time credibility of banking. Reinstate the Glass-Steagall Act (except as it pertains to the Fed) that was for the most part repealed in 1999 eliminating the restrictions of affiliations between banks and “investment banks,” … and don’t listen to any bankers who tell you different with stories about diversification reducing risk, or banks being completely capable of regulating themselves. We have seen the evidence. One very intelligent provision contained in the act is section #32 that prohibits banks from having interlocking directors. Such decree could well be applied to other industries where “Board of Directors,” has simply become an incestuous and corrupt exercise.
In the same process, throw out that brilliant piece of Congressional ingenuity called the Gramm-Leach-Bliley Act.
4. Cap the size of banks so that their executives more naturally demonstrate concern for soundness of lending decisions, and the well being and success of their regional customers. Banking should be a service, and should not be a casino where the management can pilfer the till as has been repeatedly demonstrated wantonly by the major Wall Street firms.
5. Allow the FDIC to do its job, and instruct it to play serious hardball with the risk takers who come into its line of sight.

This is not minor tweaking of the system. This is also not a call for the establishment of a consumer protection agency to police all things financial from credit cards to mortgages. Common sense dictates implementation of a structural reconstruction. The proposed Consumer Financial Protection Agency would only be an ill-defined expansion of the government payroll, proliferating government reach into more corners of society. This make little sense since there are agencies already entrusted to protect consumers which are not doing their jobs. Proposing the launch of such an inappropriate meddling amoeba is evidence of government ignorance of the realities on Wall Street.

America, your government is lying to you. You’ve been had, and are being had. It has no idea what is going on with your money. Those few bureaucrats who have ensconced themselves in positions of unnatural power and influence, and who manage the joystick, won’t tell you the truth. Even more pathetic is the fact that neither Congress, nor the President, know enough about the mechanics of America’s economy to apply practical judgment decisions in the refashioning of the system, … nor, it seems, do they have the will to act. Considering the fact that the current administration continued the trend of installing those who had a healthy hand in packing the powder keg that ignited into the economic disaster now encumbering the nation, we cannot expect much change. The billions of dollars that politicians received from Wall Street over the past decade through campaign contributions and lobbying, was insurance on their continuing silence, and stifled any burgeoning ethics.

Taxpayers have become disillusioned by the abuse they have endured at the hands of special interests, and the lack of intelligent, common sense response from their elected officials. A broad swath of the electorate is wearied. Congress should pay attention to 2012, and the electorate should demonstrate a little selfishness. Taxpayers should look for some creative thinking instead of the tired old nursery rhymes dispensed from portable pulpits.

Banking is not a magical, abstract, or obscure foreign art, although some of the fringe elements have become complex by design, such as the proliferation of derivative financial instruments. Government is protecting special interests and is NOT forcing a restructuring of America’s financial system. Taxpayers should demand that capitalism be reinstated back into the banking system. They should demand that Wall Street’s power elite end its mortgaging of the American future. Taxpayers should ignore platitudes and bromides from Obama and Congress, and they demand a break-up of Wall Street’s major players.

Taxpayers should be lining up in the next elections to install individuals into Congress, no matter what party they might represent, who will take back control of the most important components of the economy, and ensure that the country has a chance at a sound future. The electorate should not allow the continuing concentration of financial power to accumulate in fewer and fewer irresponsible and egocentric hands.

Take control back from Wall Street, demand transparency, and quit bailing out firms that should be allowed to fail. Stop being mesmerized by the pretense and illusion that was perfected under Alan Greenspan. Take back control of the money supply before another crisis turns a struggling economy with escalating debt, into a long term depressed economy.

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• Obama & Middle Class Income Tax Increases

The recession is dealing a hard blow to government revenues with tax receipts expected to drop 18 percent this year. The big question being lathered across the Nation, but not being answered honorably by the Administration, revolves around tax increases. The double-speak and denials are only adding annoyance to the feelings surging around the stress already felt by the taxpayers. Not only will the “middle class” be saddled with fresh tax increases, but so will you and your neighbor if you live in America.

The strategy of repeatedly pretending that only the wealthy are going to pay for the massive spending increases is quickly getting old and not believable. From the mansions in Beverly Hills to the park benches of Central Park, all residents will be sending more dollars to the government in one way or another. This is not about new tobacco or alcohol consumptions taxes, or even about the massive tax-grab that will come from Cap And Trade, this is about new tax measures, and new taxes on everything that can be squeezed for cash starting with your income. Forget the campaign promises you almost believed about middle-class tax cuts, and forget Sunday meet-the-press equivocations by well-trained emissaries like Geithner and Summers. Your taxes are about to increase dramatically.

The Administration is very demonstrably building a government well beyond anything that national revenues will be able to support either in the mid-term, or the long-term. With the Nation stuck in a long-term economic quagmire hurting all taxpayers who are already feeling the weight of chronic tax-creeping, the imposition of obvious and visible new income taxes is politically dangerous. The sophistication of the speciousness will find new levels of creativity during the coming weeks.

The White House will no doubt launch a campaign to “talk-up” the economy in the hope that positive proclamations will make them so. Reality is that unemployment, well above the claimed 10%, is somewhere around 16% when you include “marginally attached workers” as well as those employed “part time for economic reasons,” calculated as the “U-6 rate” by the Bureau of Labor Statistics. Unemployment increasing is neither a turn around, nor a bottom to the recession, and is a far different reality from the “8% or less” predicted by the Administration when it launched its stimulus program. So much for rose-colored forecasting by economists.

Tax receipts are apparently down by 22 percent on individual incomes, and are down 57 percent on the corporate front. When you blend that with a deficit that will surge to almost $2 trillion this year, and a National debt accelerating past $11.6 trillion, your options are limited. We can assume that cutting federal spending is an ideological impossibility, leaving the government with two principal choices, and neither induces positive tingles up your spine. You can be asked to sacrifice and have your income taxes increased massively, or the dollar’s value can be allowed to drop significantly as more of them get printed. The likely path will be a less harmful blend of both of these alternatives. The key will be to allow the dollar’s value to slide gradually so that there are no sudden shocks striking at the heart of national and international markets. International creditors like China will be irritated, but will accede to the gradual process of easing down the dollar. Forget the doomsday scenarios, however, America will take years to work its way out of this recession, then pay off past and current government spending sprees, on its way to growing through the new financial demands on its treasury that will surface over the next decade from baby boomers, social security and healthcare.

In order to initiate an advance on the lengthy economic turnaround, the joy ride of debt-spending-with-wanton-abandon mindset enjoyed by Bush and continued by Obama must be brought to a close. Deficit growth cannot continue on a path exceeding the rate of economic growth. The Administration should surface out of its decision closet, and become resolutely emphatic on a course of action that will reverse the deficit's current trend. Obama’s next address to the Nation should be, “I know I promised that if you made under $250,000 per year, you would not see your taxes increased a single dime. Not your income tax. Not your payroll tax. Not your capital gains tax. No tax. I was wrong. I was hasty in forming that covenant with the electorate. We are a government living beyond its means, with currently no end in sight to the discrepancy. Here is my plan for an overhaul of the tax code, and what it will mean to every single one of you. You can expect your income taxes to increase an average of ten percent, for starters. Now, about a national sales tax, …”

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• Government Capping Compensation?

As you shelter yourself in a cool closet from the hailstorm of healthcare promotion, Congress and the President are sliding into home plate with compensation controls in the senior offices of financial firms, … for starters. The new Corporate and Financial Institution Compensation Fairness Act will provide no other than the SEC with the ability to establish the rules on how executives are paid, and will enable government agencies to effectively control the “inappropriate risks,” practices of financial companies. Institutions with less than $1 billion in assets will be exempt. This further intrusion into the fiber of corporate America by those who have completely failed in carrying out their responsibilities to the electorate is another misguided kneejerk reaction.

This bill will empower government bureaucrats to control compensation plans that will threaten the safety of financial institutions, or adversely impact economic conditions or financial stability. Have no fear, the newly hired experts will figure this part out, what it means and how to implement it, and they will diligently look after your interests.

There’s hope, however, with some minor good news in this bill that resides in its provision for procedures for shareholder approval of golden parachutes. What this portion of the bill looks like in final form will dictate whether or not it makes any sense, but in the meantime, three cheers for the crumbs thrown at demands for common sense. We shall not hold our collective breath. Another clause that might have provided teeth in a corporate structure fix was the providing of a voice to shareholders on executive pay. It failed miserably in its final form, since the shareholder vote on executive pay will be non-binding, therefore will leave shareholders where they were before, … “we’ll tease you with a little influence on the company you own, but, … naah, just kidding, get lost and go back to your trading screens.” Shareholders, large and small, should have greater influence on the proceedings of the public companies they own, and such influence should be addressed at the Board of Directors level. The government is not improving the lot of shareholders, but is escalating its own intrusion into the boardrooms of America.

We should remember that this is the same Administration and Congress that couldn’t even track the bailout money, or put strings on the money to restrict it from getting dished out in the form of bonuses. This is also the government that threw those billions at financial institutions on the pretext that they had to be bailed, to avert a depression, yet no one in government could tell you where that money actually went. So how was it, exactly, that those bailout billions were allocated? The toxic assets could not be defined or audited, which means that the fear mongering and threats were outright lies. Wall Street skunked this Administration, as well as the last one, and as a result a colossal extortion of the taxpayer was allowed. Did anyone making these horrendous decisions ask the hundreds of thousands of businesses from coast to coast what their banking preferences might be? … Would you rather deal with a gigantic-too-big-to-fail-market-dominant bank headquartered in New York, or a medium or smaller sized regional bank? When did “failure” get expunged from the dictionary of American Capitalism?

Government intervention has reduced competition in the banking sector, allowing the favored few bailout-receiver-therefore-government-backed behemoths to attract investor support, and has enabled their acquisitions of not so fortunate competitors.

All of this frenzied government activity pretends to be response to the outrage against some of the insanity exercised by some like AIG, Goldman Sachs, and Morgan Stanley. The $11 billion plus, awaiting the bonusable at Goldman should soon make for incendiary fireworks, and support the government cause. Using public anger as cover to implement invasive measures is rather expected from a government that has failed to acknowledge or accept any responsibility for the environment that incubated the bubble which burst into a recession. Giving more power to vehicles such as the SEC for example, reminds us of the abject incompetence the SEC demonstrated through the economic extravagance that allowed Wall Street the power and influence to exploit, and then erode, the financial health of the Nation. Did the SEC also not have a front row seat to Bernie Madoff’s implementation of an extensive 40 year long grotesque personal compensation program?

Sweeping expansion of government incompetence into corporations is an invasion that will not be reversed. Other more intelligent policies should be considered instead of launching clusters of bureaucrats to invade company offices in all corners of the country. One could consider implementing laws against monopolies, but it would be more effective to start with segregating the large banking institutions into more pure line of business sectors. It really comes down to reinstating certain portions of the Glass-Steagall Act that was repealed in 1999. Hundreds of millions were expended by the large banking institutions to achieve the repeal of the Act, therefore a reversal would be very difficult. Given the present climate of Washington dependence on Wall Street cash, even “difficult” might be a stretch, however, such reinstatement would bring back some peace of mind to taxpayers in the long-term.

The critical functions provided by undistorted banks operating within narrow guidelines should be reconsidered. The contamination of many banks over the past decade, with the annexation of such things as brokerages, and the underwriting or trading of complex securities, should be reversed. Government should direct existing oversight bodies to perform their duties, including the enforcement of laws dealing with asset requirements, capital ratio leveraging, and lending guidelines. Then, government might provide shareholders with more teeth to bite when necessary, and leave them to rule over freshly formed and more independent Boards of Directors.

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• Government vs. American Capitalism

For a generation, now, we have been accommodated with a front row seat to a rigorous and seemingly intractable advance of government into the whole of America’s social fabric, and into the institutions of its capitalist system. Today we are confronted with a wave of negative wind pushing against the capitalism that has brought America its unprecedented success, as it absorbs the blame for the economic meltdown.

I am not equating capitalism with free markets here as is too often done, because that would imply an inclusion of international communities into a common basket, and there has to be balance and common sense in the application of “free trade,” between participants as we have discussed in previous articles.

Recessions inevitably deliver capitalism a bad rap. Making matters worse, there are usually groups or individuals who have taken advantage of power and influence, or who hustle the provenance of panicked confusion into magnified opportunities for fortune creation. All the while, wide swaths of society are struggling to meet basic needs. Visible abuse of the system that leads to wealth concentration provides thresholds over which those so inclined will leap to promote expansion of government and its insinuation into the corporate fiber of the Nation. Such intrusions usually come from those with little grasp of the elements at the heart of economic growth, human nature, creativity and the human spirit. On the other hand, extravagant, unrestrained, and unconscious excess fosters jealousy, and reaction. It can also propel overreaction, which in turn empowers those in government who seek increases in government intervention at all levels of commerce.

Such exercises in reactive belligerence pretending concern for the public “good,” are actually acts of self-interest intoxicated by ideology, or worse, driven by overwhelming ego. The reactive process ignores long term consequences of hysterically applied policies, and absolutely cannot effectively evaluate the secondary or tertiary repercussions.

We lament the often-declared unintended consequences of unctuously presented self-righteous actions such as the promotion of dubiously structured mortgages. It is reasonable to expect a chicken in every pot. It was, however, unreasonable to have politicized the American dream of home ownership into a structural expectation and promoted it as a fundamental right. Somehow, the “home” became the vessel that would bring forth the promise of collective prosperity. Both of the dominant American political assertions, Republican and Democrat, signed onto the program. Both sides of the political isle bent all rules of common sense to exert pressure in effort to curry favor with the electorate, and corporate benefactors, while satisfying expectations of lobbyists.

The department of Housing and Urban Development from the early ‘90s on, pushed minority applicant quotas on mortgage bankers, and set targets for the purchase of less than median mortgages by Fanny Mae and Freddie Mac (FM & FM). With the taxpayer on the hook for trillions in questionable debt, banks and bank executives were dancing in risk-free ballrooms up to the rafter in money. As the trillions accumulated, FM & FM, with the applause of Wall Street financial institutions such as Morgan and Goldman, “creatively-accounted” for the real value of the toxic assets that taxpayers would one day be required to cover. Oversight? Sure there was oversight – oversight that appropriate kickbacks made their way to all of the proper pockets. The Clinton Administration and Congress pushed banks to adhere to the Community Reinvestment Act (CRA) in order to be allowed to diversify. Again, where was the risk? Thank you FM & FM. No, make that, thank you taxpayers. Then along came George Bush with the American Dream Downpayment Initiative (ADDI) signed into law in December 2003 to increase home ownership rates with funds to be provided to first time buyers for down payments and closing costs.

Making matters more fragile, in came galloping the Morgan and Goldman types, smarter and more ruthless than the deplorable dunces at AIG who were easily perverted into insuring Collateralized Debt Obligations, and seducing banks to over-leverage, using complex instruments the bankers didn’t understand. The financial community availed itself self-servingly of the opportunity created by the government’s intervention. Morgan, Goldman and other investment banks made billions selling tainted goods to banks and to foreign governments. Lack of awareness and understanding by the general community encouraged a galvanization of international endorsements for what were worthless toxic assets from the outset. The long-term consequences of this extensive and forceful government intervention will have unintentionally synthesized some extremely substantive burdens on our grandchildren.

What old and repeated lesson has once more been reinforced from this generation-long exercise?

Government is using taxpayers’ money to build powerful infrastructures that will in effect work against them, and encroach on their freedoms. Uncontrolled government intervention and cronyism are destructive potencies that destroy the fundamental bulwarks of the capitalist system, and Washington has been practicing the schemes for too long. In so doing it has eroded the openness and efficiency of America‘s economic broad-wealth creating environment. I say broad because any government reinforcement of excessive concentration of wealth and power is not conducive to the long-term health of the broader society.

Entrepreneurial energies bloom most abundantly in small clusters. The more the better, but each succeeds best without encumbrance of committees, or group designed strategies. Government on the other hand is by its nature a giant mushrooming amoeba, incapable of creativity, requiring endless approvals, with all departments and agencies in a continuous phase of expansion, justified by egos requiring satisfaction and aggrandizing the turf. Government bureaucracy instills dependence upon itself whenever and wherever possible. History shouts that dependence on government becomes dangerously habitual, and leads to loss of liberty. That goes for individuals, as well as for businesses.

Stifling true entrepreneurial spirit will destroy that critical energy at the foundation of the American economy. It is this fundamentally critical energy that strives to anticipate needs or wants of the broader society, then creatively delivers solutions, and augments output. It strives to become educated in order to better understand whatever might advance its ascent along the risky path to success, and endeavors to minimize its assumptions. Above all it applies as much common sense as it can muster to minimize the chances of failure, and improve the odds of producing something greater than what began. As this energy succeeds, many prosper and benefit. Entrepreneurial independence operating within the boundaries of the Nation’s laws has for two centuries differentiated America from every other country on Earth.

It is understandable that not everyone can be an entrepreneur in the strictest sense, however, each can be entrepreneurial in personal practice and mindset, and each one of us can be thoughtful. At the very least, we can all void jealousies that might restrain that spirit in others, or attempt to obstruct their right to exercise positive natural tendencies and capacities. So doing might quell the demagoguery that is inflating the ascent against the private sector, productivity, and the creation of wealth.

We should not accept deceitful rationalizations artfully packaged through demagoguery and homiletics, or allow them to deliver prepackaged thinking on our behalf. We are presented with economic realities which demand reason, and summon our uncompromised reasoning. The economic challenges presented should apprehend the participation of the whole of population. Such participation is occasion for self-education at a very singular level to understand, as much as is possible, all of the causes that led to the events now chastising the country. The comprehension will guide the electorate toward a more judicious discernment, as it navigates through the political passage ahead. Assuming that others “on The Hill,” will have the answers, would be a gross abdication of rights and capabilities.

Capitalism provides the platform for the individual to push the boundaries of creativity and productivity in the creation of wealth. Government’s role is to protect the environment, through laws, and judicious oversight, within which capitalism is allowed to strive. Broad participation is required, without ambiguity, if there is to be sensible pushback on the advancing and infringing hoards from “The Hill.”

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