Archive for June, 2009

Governance Universal

Posted in Talking Trash with tags on June 4, 2009 by ditelhead

I don’t know I just don’t; our government will be running the car companies, the banks, the railroads and at least one giant insurance company as well as the internet. I’m not one of these people that thinks the government can’t do anything right. The government was designed to govern by consent of the people and in most cases it does that fairly well. The government was never designed to run automobile companies.

 

We the people need to look at the problems and the proposed solutions:

 

Automobile companies had a monkey on their back, the UAW and other unions. I saw what the unions, backed up by their political supporters, did to steel plants. GM and Chrysler needed to go into bankruptcy from the beginning to get this monkey off their backs. Instead a deal was made that the union would get shares of GM for concessions that never happened. This was like getting equity in your house before you pay the first mortgage payment. Honest share holders, pension plans were robed and villainized by Obama on behalf of the UAW. Our government helped the union tighten it coils around GM and cost the country billions of dollars. GM will eventually become politically correct (PM) motors, building cars nobody wants. By the way, I do not mean to be an apologist for poor corporate governance; but, it is a private matter for the share holders. Last November the voters got to choose between dumb and dumber, sometimes share holders are not given a much better choice for corporate leadership. I don’t know how to impose wisdom on corporate executives.

 

Banks and real-estate investors were forced to make risky loans by the government. Values of the real-estate were inflated by artificially low interest rates. The artificially low interest rates were then raised too much too fast possibly in response to dept accumulating from our holly wars. The government then imposed a draconian accounting system called “Mark-to-Market”. Distressed mortgages were written in the books as 0! Effectively the government bankrupted anyone who invested in real-estate. All those whose expertise were in these matters said “eliminate Mark-to-Market accounting rules”. Dropping interest rates helped also.

 

Health care is about to bankrupt the country. Many people think that nationalized healthcare is the solution. Long ago someone decided that health insurance should not be taxed. Our government wanted business to provide health insurance to people. The problem was that nobody was watching the money. If people had to pay out of pocket they would look at the doctor and say “your nuts”. The medical mafia has grown up feeling entitled to huge amounts of money and the AMA is one of the most powerful lobbies in Washington. The fact that so many people did not have health insurance was the free enterprise system reacting to medical greed. Our medical system was pricing itself out of business. I have long said that the only way to fix medicine was to cut the money off and medical benefits should be taxed no more or less than anything else.

 

In each case a representative government, representing the legitimate aspirations of hard working people, meddled in an area the government should have kept out of. Now our government will run the economy based on what will get the politicians votes. Operating by public consensus is a great idea for a government but a bad idea for a business. Lawyers and “financers” do not know how to run car companies, banks or hospitals. Personally I am convinced that that our government has put us on the road to national fiscal suicide!