Tuesday, March 18, 2008

Revise the Federal Reserve Act of 1913

At 2:39PM EST today, March 16, the Federal Reserve lowered the Key Interest Rate another .75 percentage points to 2.25%.
This further denotes a recession in the United States. We have all become "comfortable" with the way the Federal Reserve affects our economy and few of us understand how it does its job. However, it may be that time has come for us to be more knowledgeable of that organization and its functions.
The following URL reaches a "plain language" explanation of the Federal Reserve system, according to one of the twelve Reserve Banks [designated 10J].
Although it is anything but "plain and simple" it does give information that will help to explain.
http://www.stls.frb.org/publications/pleng/default.html

In my not so humble opinion, the Federal Reserve system has failed. I should say, that at least in one of its functions to examine the viability of each bank you and I use, regarding risk and liability...a sound and responsible performance. As each bank is examined, a rating is assigned which indicates the bank's processes and performance and further denotes if there are areas which require corrective action. So what happened regarding the fifth largest banking concern, Bear Stearns, that it was kept from collapse only by urgent action supported with special $30 billion Federal Reserve backing (bailout).


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Facts:
Bear Stearns has never reported an annual loss.
At the close of the quarter in February it claims a profit.
At the end of 2007 the "book value" of its shares of stock was $84.09 per share.
Mid-March Bear Stearns agreed to be acquired by J.P. Morgan at $2 per share.

This was the fifth largest banking concern in the United States!

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To use the imagery of a political candidate, the $30 Billion effort to get the bus out of the ditch doesn't concern me as much as how the bus got driven into the ditch in the first place with Federal Reserve oversight and examination.

Congress who oversees the Federal Reserve, established the Federal Reserve Act in 1913. Since then its responsibilities has been expanded and of course so has the infrastructure to carry out these functions...and like most such bureaucratic organizations it has metastasized into a maze of structure, regulations, personnel and officiousness. Banking reform was the reason it was created.

Time has come again to reform.

Tuesday, March 11, 2008

The Us Constitution defines the necessary qualifications for president as:
No person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President; neither shall any Person be eligible to that Office who shall not have attained to the Age of thirty-five Years, and been fourteen Years a Resident within the United States.

That includes a lot of people. However, the public at large defines further what is expected of a president for whom they will vote into office. Or do they? The current two-party process has generally presented candidates which have lead to the premise of "the lesser of two evils." The public so expects corruption in the political process that it is rare for a candidate to espouse honesty without a chorus of snickers. To say a candidate wins the presidency is not to claim selection of the best citizen for the executive job and at best only attests to the appearance of ability.

So just what are qualities a president should have? Candidates are quick to point to qualities they have that an opponent does not have. Th standard would seem to be whatever makes a candidate appear better than an opponent. And that reinforces the "lesser of two evils" perspective.

It is doubtful that it would be possible to establish criteria for the performance of the functions of the executive office that would endure from one election to another. Citizens usually call out present day concerns for solutions, for which candidates make promises to resolve, although there is no means by which to enforce delivery of the promises. Yet history gives evidence that current problems are often overshadowed by new problems for a president and for which he is unaware. The concept of voting for the candidate with the best solutions for today's problems is like driving by looking into the rear view mirror while traveling around a blind curve...even if the solution(s) are effective.

Would it not be better to examine candidates based upon qualities that will serve the future?

Let us begin with honesty. How many presidents of the past have been dishonest to the citizenry about significant issues?
Then perhaps integrity? How many presidents of the past have waffled to appease a poll or special interest despite previous positions stated?
How about leadership? Well Adolph Hitler, Joseph Stalin etc. were effective leaders in the broad sense of the word...even if their vision was poor.
Character?
Conduct that conforms to an accepted standard of right and wrong would appear as character for one man and immoral conduct for another.
Decisiveness surely is a quality needed of an executive. How many presidents have been able to decide significant matters which failed regardless of their confidence?

How does one determine if a presidential candidate "has what it takes" to successfully execute the functions of office in light of uncertain future issues as well as the known ones?
Experience then? What experience approaches the ability to set off thermonuclear war at the press of a button?

What qualities has history deemed in
past presidents that made one a better president than another?

The ability to choose and charge a supporting staff of intelligent, capable and honorable people to address the needs of the public with selfless dedication and intent. In this manner both lesser and greater of two evils have been good presidents. Even the best quarterback cannot achieve victory without a team of good players backing him...but the worst can, with such a team.