Madoff to Head Banking Regulation

Now that I have your attention, I want you to realize that this headline might as well be true. Sen. Chris Dodd has been “the man” within the Senate Bank-ing Committee since well before the tragic collapse of our financial system. He allowed Fannie Mae and Freddie Mac to become a cesspool of junk mortgages. He allowed banks to become brokers and brokers to become banks. Now here he is unveiling a new finance regulatory reform bill that fixes nothing. Why are we allowing one of the people responsible for our financial failure to define the new rules going forward?

Sen. Dodd’s new bill of financial regulatory reform doesn’t address the key causes of the economic crisis. Let’s be clear what caused our problems: the Fed was too loose with their monetary policy, Fannie and Freddie were allowed to guarantee almost $1.5 trillion in junk mortgages, and as we have reported in previous articles, there was a total failure to regulate Credit Default Swaps.

How Sen. Dodd can ignore the Credit Default Swap issue is beyond me. Credit Default Swaps are insurance policies on bonds. Currently there is no transparency or margin requirement. How can you allow companies to write these policies without any collateral? This is what helped sink AIG and Lehman. It would be a simple process to create transparency on these financial devices, since we already require all other commodities to be traded through clearing houses and have collateral.

Finally, the use of mark-to-market evaluation for bank loans works in the favor of large companies and hog ties financing to small businesses. Please explain to me how this will aid the growth of jobs? It’s clear that Sen. Dodd and his committee have no clue and need to take a pass on this legislation. We can wait a year until we replace the current legislators with people that actually care about the future of the American people.

Supreme Court Errors Again

The Supreme Court has ruled that Corporations and Unions can spend freely to support or oppose a candidate. This overturns a 20-year-old ruling that prohibits corporations from using money coming directly from their general account. With this ruling, the Supreme Court has once again manipulated the Constitution to work for special interests.

Critics of campaign finance limits have for years argued that these laws were a restraint of freedom of speech. On what planet does a corporation get the right of freedom of speech? Corporations and Unions are not citizens of this coun-try. They do not get to hold up the Bill of Rights and claim them. There are laws that clearly give corporations rights, but freedom of speech isn’t one of them. What’s next? Will corporations make false claims about a products and when sued they can just say that it was their opinion under freedom of speech?

We have just given the keys to the kingdom to the wrong gatekeeper. The amount of money that goes into a political campaign has already gotten out of control. The MA Senatorial race saw over $10M spent in the last 9 days alone. Now what is to stop GE from using all of their NBC stations ad time to support specific candidates? What is to stop FOX from doing the same thing? What is to stop a foreign corporation from funding billions of dollars to elect the next President? This appears to be just another way to create international influence on our elected officials.

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Healthcare Bill - Eliminate Defensive Medicine

The right and the left have both gone out of bounds. Rep. Pelosi saying that it is un-American to voice your complaint with the healthcare bill and Sarah Palin talking about “Death Panels”; they should both be ashamed of themselves. The healthcare bill is supposed to make healthcare insurance more affordable and more available. Balderdash!!

Our entire Congress should be investigated for bribery. Why is there no conversation on Tort Reform? Where is it in the bill? Politicians know where their bread is buttered. They don’t want to risk the hundreds of millions of dollars tossed into campaign coffers every year by the Legal industry. It’s just another example of big business buying votes.

For those of you who say, “…reducing malpractice insurance won’t make that big a difference…” I say, “Show me the facts.” The legal costs are the small part of the equation, although PointofLaw.com recently cited that previous estimates of the overall impact of Tort Reform were greatly understated. The real issue is that our medical professionals have taken to practicing Defensive Medicine.

Defensive Medicine is the practice of ordering tests and procedures that aren’t necessary, but protect the medical professionals from the possibility of a lawsuit. In 2005, the Journal of the American Medical Association said that 93% of specialists in Pennsylvania admitted to practicing Defensive Medicine. In Massachusetts, a 2008 survey showed that 25% of all imaging tests were purely for defensive purposes. Although it is hard to quantify, because it has become so pervasive within the medical establishment, it is estimated to have increased overall medical care costs by between $100B and $200B. Even on the low side it comes to almost a 10% savings in healthcare costs, yet we don’t even hear a whisper.