.floatimg-left-hort { float:left; } .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 12px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 12px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 12px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;}
Dear Mr. Berko:

Dear D.L.:

The sweeping overhaul of our financial system is not limited to banks. It includes the brokerage and insurance industries, credit card issuers, hedge funds, mortgage companies, private equity firms, traders, stockbrokers and every moneymaking machine that euchred outrageous profits and paid executive salaries and bonuses large enough to choke a black hole. The Federal Reserve will be the agency charged with the responsibility to ensure compliance and will become the “super-regulator” supported by a new “council of regulators.”

You asked: “Why are the Obama people changing the rules …” The answer is simple. We cannot trust the pinstripe suits that run Merrill Lynch, Goldman Sachs, Citigroup, Bank of America, Countrywide, AIG, Cerberus, etc. Their gleeful cupidity turned capitalism into an airplane with engine trouble navigating through a terrifyingly dark cloud. What’s more, only the crew had parachutes.

Free markets don’t work; at some point they self-destruct. Even former Federal Reserve Board Chairman Alan Greenspan, in a New York Times interview, remarked that the mistake he made was “to trust that free markets could regulate themselves without government oversight.” As Roman historian Tacitus (A.D. 55-117) observed: “The more corrupt the state, the more numerous the laws.”

So, because the consumer has been figuratively raped by American financial institutions, Obama has proposed the creation of a Consumer Financial Protection Agency with broad authority to write and enforce rules governing mortgages, credit cards, home equity loans, annuities, brokers, derivatives, life insurance products and other sucker bets peddled by Wall Street. What this tells us is that without government protection, the Merrill Lynches, the Citigroups, the Countrywides, the Visa and MasterCard issuers will diddle us every chance they get.

Unfortunately, the implementation of these proposals will increase operating costs for financial institutions, the profitability of their core products could decline, the growth rate of the industry will slow, return on investment will fall, financing could be difficult to secure and economic growth will be inhibited. Little good can come from this new level of bureaucracy; it will cost tens of billions of dollars, and the paperwork generated will denude 2.73 percent of the rain forest in the Amazon each year.

But this bill will be a long time in coming — primarily because our representatives in Congress are more concerned with covering their derrieres than doing the heavy lifting that needs to be done for the country. So the bill will be debated and re-debated by Congress, and it will take quite a while before it’s passed. My guess is that many of the regulations will be put into effect by fiat, because the regulatory agencies have the power to do it. I guarantee that the Consumer Financial Protection Agency bill will not pass in its original form. But be mindful that the interest of the government is always intimately aligned with the wealthy whose quiet contributions cannot be ignored.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@comcast.net. © 2009 Creators.Com.