DISCRIMINATION

June 20, 2018


When I think of discrimination I automatically think of whites discriminating against blacks. I’m sure that’s because I’m from the southeastern part of the United States although there is ample evidence that discrimination occurs in all states of the United States.   There are other manners in which discrimination can occur.

From the New York Times we read the following:

“A group that is suing Harvard University is demanding that it publicly release admissions data on hundreds of thousands of applicants, saying the records show a pattern of discrimination against Asian-Americans going back decades.

The group was able to view the documents through its lawsuit, which was filed in 2014 and challenges Harvard’s admissions policies. The plaintiffs said in a letter to the court last week that the documents were so compelling that there was no need for a trial, and that they would ask the judge to rule summarily in their favor based on the documents alone.

The plaintiffs also say that the public — which provides more than half a billion dollars a year in federal funding to Harvard — has a right to see the evidence that the judge will consider in her decision.

Harvard counters that the documents are tantamount to trade secrets, and that even in the unlikely event that the judge agrees to decide the case without a trial, she is likely to use only a fraction of the evidence in her decision. Only that portion, the university says, should be released.”

There is no doubt that Harvard University makes considerable efforts to be “all-inclusive”.  They discriminate against whites and Asian-Americans in favor of African-Americans, Hispanics and the LGBT community.  That is a fact and a form of discrimination.

The EEOC tells us the following are methods of discrimination:

I recently read a horrible story about a young man in the country of India.  This guy had completed a course of study at the prestigious Indian Institute of Technology in Delhi with a Masters Degree in computer science.  He came to know a fellow classmate.  They fell in love.  He asked her father for her hand in marriage.  He said absolutely not.  “My daughter will not marry an untouchable, a Dalit.”  Now, Article 17 of the Indian Constitution abolishes untouchability and makes it punishable by law, and the Scheduled Caste and Scheduled Tribes (Prevention of Atrocities) Act of 1989 spells out the safeguards against caste discrimination and violence. His daughter honored her father and they did not get married.  The young man moved to the United States and now is a citizen working for an aerospace company in New England. He is happily married with three children—all citizens.

The term caste was first used by Portuguese travelers who came to India in the 16th century. Caste comes from the Spanish and Portuguese word “casta” which means “race”, “breed”, or “lineage”. Many Indians use the term “jati”. There are 3,000 castes and 25,000 sub-castes in India, each related to a specific occupation. A caste system is a class structure determined by birth. Loosely, it means that in some societies, if your parents are poor, you’re going to be poor, also. Same goes for being rich, if you’re parents were rich, you would be rich.   According to one long-held theory about the origins of South Asia’s caste system, Aryans from central Asia invaded South Asia and introduced the caste system as a means of controlling the local populations. The Aryans defined key roles in society, then assigned groups of people to them.

If a Hindu were asked to explain the nature of the caste system, he or she might tell the story of Brahma — the four-headed, four-handed deity worshipped as the creator of the universe. According to an ancient text known as the Rigveda, the division of Indian society was based on Brahma’s divine manifestation of four groups. Priests and teachers were cast from his mouth, rulers and warriors from his arms, merchants and traders from his thighs, and workers and peasants from his feet.  Others might present a biological explanation of India’s stratification system, based on the notion that all living things inherit a particular set of qualities. Some inherit wisdom and intelligence, some get pride and passion, and others are stuck with less fortunate traits. Proponents of this theory attribute all aspects of one’s lifestyle — social status, occupation, and even diet — to these inherent qualities and thus use them to explain the foundation of the caste system.

The caste structure may be seen by the digital below.

India’s caste system has four main classes (also called varnas) based originally on personality, profession, and birth. In descending order, the classes are as follows:

  • Brahmana (now more commonly spelled Brahmin): Consist of those engaged in scriptural education and teaching, essential for the continuation of knowledge.
  • Kshatriya: Take on all forms of public service, including administration, maintenance of law and order, and defense.
  • Vaishya: Engage in commercial activity as businessmen.
  • Shudra: Work as semi-skilled and unskilled laborers.

You will notice the “untouchables” and not even considered as a class of Indian society. Traditionally, the groups characterized as untouchable were those whose occupations and habits of life involved ritually polluting activities, of which the most important were (1) taking life for a living, a category that included, for example, fishermen, (2) killing or disposing of dead cattle or working with their hides for a living, (3) pursuing activities that brought the participant into contact with emissions of the human body, such as feces, urine, sweat, and spittle, a category that included such occupational groups as sweepers and washermen, and (4) eating the flesh of cattle or of domestic pigs and chickens, a category into which most of the indigenous tribes of India fell.

As mentioned earlier, Article 17 of the Indian Constitution was introduced to eliminate the caste system.  Do you really think that happened?  Of course not.  Indians of the Dalit classification, and there are thousands, still face rejection and discrimination on a daily basis.  Maybe we here in “los estados unidos” have it better than we think.

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Several of the following comments were taken from the Washington Free Beacon.

If you have been reading my posts you know that just about all involve the STEM professions, travel, salary levels for engineers, book reviews, restaurant reviews, etc etc.  In other words—I usually do NOT do political.  Politicians are fascinating people because ALL people are fascinating.  We all have a story to tell.  OK, with that being the case, I could not resist this time. Take a look.

Senate increases budget by forty-eight ($48) million, salaries by twelve ($12) million. That was the sub-title to the Washington Free Beacon article relative to the Omnibus Spending Bill just signed by President Trump. How much is $1.3 trillion dollars?  ANSWER:  It’s a million million. It’s a thousand billion. It’s a one followed by 12 zeros. 1,000,000,000,000.  The following digital photograph represents one billion dollars.

The next digital represents a trillion dollars.

Please notice the little guy, at the left of the stack.

You ready for this?

The Senate increased its total salaries of officers and employees by $12.6 million in the 2,232-page bill that lawmakers had fewer than forty-eight (48) hours to read and vote on. The bill avoids a government shutdown that would take place at midnight on Friday.

Aside from giving their own institutions a bonus, the omnibus bill also gives away millions to prevent “elderly falls,” promote breastfeeding, and fight “excessive alcohol use.”

The legislation increases the Senate budget to $919.9 million, up $48.8 million from fiscal year 2017, according to the congressional summary of the bill.

  • “The increase provides funding necessary for critical modernization and upgrades of the Senate financial management system and investments in IT security,” the summary states.
  • Salaries of staffers in the Senate are also set for an increase. Division Iof the legislation breaks down the total salaries of officers and employees, which are being raised from $182 million in 2017 to $194.8 million in the final bill, an increase of $12.58 million.
  • The Senate also increased its expense account, as expense allowances are going from $177,000 to $192,000, an increase of $15,000.
  • Committee offices got an increase of $22.9 million in salaries, from $181.5 million in 2017 to $204.4 million in the final bill.
  • Another $15 million goes to study “high obesity counties” and an increase of $5 million for the CDC program that seeks to “address obesity in counties” by leveraging “the community extension services provided by land grant universities who are mandated to translate science into practical action and promote healthy lifestyles.”
  • The bill also spends $2.05 million to prevent “elderly falls” and $8 million in the form of “breastfeeding grants.”
  • The legislation also mandatesthe Alcohol and Tobacco Tax and Trade Bureau to improve “wine label accuracy.”

I’m sure the bill does some very good things one being added money for our armed forces.  We have experienced in 2017 a terrible statistic—the number of casualties resulting from training our men and women in uniform exceeded the number of casualties in combat.  This is largely due to lack of funding for equipment maintenance and training.

I know or at least suspect, there is a great deal of behind-the-scenes activity on the part of each congressman and senator required for preparation prior to each legislative session.  Let’s take a look at the number of scheduled sessions over the past few years. Here are the number of legislative days for the House and Senate each year in recent history:

  • 2016: 131 in the House, 165 in the Senate.
  • 2015: 157 in the House, 168 in the Senate.
  • 2014: 135 in the House, 136 in the Senate.
  • 2013: 159 in the House, 156 in the Senate.
  • 2012: 153 in the House, 153 in the Senate.
  • 2011: 175 in the House, 170 in the Senate.
  • 2010: 127 in the House, 158 in the Senate.
  • 2009: 159 in the House, 191 in the Senate.
  • 2008: 119 in the House, 184 in the Senate.
  • 2007: 164 in the House, 190 in the Senate.
  • 2006: 101 in the House, 138 in the Senate.
  • 2005: 120 in the House, 159 in the Senate.
  • 2004: 110 in the House, 133 in the Senate.
  • 2003: 133 in the House, 167 in the Senate.
  • 2002: 123 in the House, 149 in the Senate.
  • 2001: 143 in the House, 173 in the Senate.

An “unhappy” President Donald Trump signed the $1.3 trillion spending bill into law Friday, his second about-face in twenty-four (24) hours on the measure to keep the government open.

The president said he approved the legislation to fund the government through September for national security reasons, as it authorizes a major increase in military spending that he supports. But he stressed that he did so reluctantly.

Trump slammed the rushed process to pass the more than 2,200-page bill released only Wednesday. Standing near the pile of documents, the president said he was “disappointed” in the legislation and would “never sign another bill like this again.”

So much for draining the swamp. We are good through September of this year and then we start all over again.  ALL OVER AGAIN!

POLITICAL CARTOONS

July 31, 2017


If you read my post on a regular basis you know I don’t concentrate on politics.  I try to stick to subjects involving the STEM professions—in other words, subjects I know something about and have an interest in.  There is nothing wrong with being a Democrat, Republican, Independent, Libertarian, etc.—there is everything wrong when our elected officials refuse to “throw together” to solve our most-pressing problems.  That is exactly where we are today and I’m probably not the one to solve that problem.

On a daily basis, our “state-of-the-nation” is displayed with remarkably creative and compelling political cartoons.  These guys and gals are truly good at what they do and provide a pictorial summary of where we are as a country.  A picture is truly worth a thousand words. Let’s take a very quick look.

As you well know, the Republican party is having, or has had, remarkable difficulty in fixing or repealing the Affordable Healthcare Act—or Obamacare as it has come to be known as.  I suspect, but do not know, it may be because there is no suitable replacement.

The cartoon above provides a glimpse into a terrible situation existing in our country today. Opioid-related deaths have reached an all-time high in the United States. More than 47,000 people died in 2014, and the numbers are rising. The Centers for Disease Control and Prevention this month released prescribing guidelines to help primary care physicians safely treat chronic pain while reducing opioid dependency and abuse.  That’s where we are in this country.

Senator John McCain cast the deciding vote that killed Congressional efforts to repeal the HCA.  It was dramatic and certainly made the point.  The JPEG below tells the story also.

Our new Director of Communications for the Fed is Anthony Scaramucci and boy does he know how to make a first impression.  I’m probably one of an ever-growing few who remember my mama telling me she was going to wash my mouth out with soap if I did not mind my peas and ques.   Maybe Anthony needs to listen to my mama.  Do we really need another trash-talker in la Casa Blanca?

Washington D.C. leaks like a fifteen-year-old garden hose.  I would definitely hate trying to keep a secret within the beltway.  Imagine you’re a somewhat senior government official — one who doesn’t get a lot of face time with the president, but who has access to pretty important information — and you need to send a message to President Donald Trump. You can try to write him a memo, or get the message into a briefing paper his staff is preparing. But the staff is trying to squeeze a ton of information into the incredibly narrow aperture of “what the president is actually going to read.  Your message had better be less than a page (ideally a lot less, so that it can fit on a page with all the other messages all the other officials like you are trying to send). It had better include a visual aid — a map is good.  Or you can go the easier route: You can just leak the information to someone so that it ends up on Fox & Friends.

The picture above is one of my favorite.  Senator Jeff Sessions was the very first to indorse Donald John Trump for the Presidency.  Apparently, loyalty does not work both ways. If I were Sessions, I would be cleaning out my desk right now.

As always, I welcome your comments.

 

JOBS JOBS JOBS

April 5, 2017


I think we all hope meaningful employment for everyone wishing to work and physically able to work.

According to CNBC, we have the following statement:

“Companies added 263,000 jobs for the month, ADP and Moody’s Analytics said. That was well above the 185,000 expected from economists surveyed by Reuters and also better than the 245,000 reported for February.

The February number was revised significantly lower, however, from the originally reported 298,000.

In addition to the big gain on the headline number, the month also continued a trend away from services-oriented positions dominating job creation. Goods-producing firms contributed 82,000 to the total, as construction led the way with 49,000 new jobs.

Professional and business services was the leading sector, with 57,000, while leisure and hospitality added 55,000 and health care was up 46,000. Manufacturing payrolls grew by 30,000 and trade, transportation and utilities rose by 34,000.

In terms of company size, fewer than 50 employees represented the greatest growth area, with 118,000. Firms that employ 50 to 499 workers added 100,000.”

“The report comes amid hopes that President Donald Trump can deliver on his pro-growth agenda of lower taxes, less regulation and more infrastructure spending. Economic data points have been mixed lately, with sentiment surveys outpacing actual hard data of activity.”

The bar graph below indicates private sector job growth, or lack thereof for the last several months.  I do not think anyone would argue with the statement we are facing a growing economy but that growth is not robust by any stretch of the imagination.

Another very good sign our economy just might be on the mend:

“The U.S. trade deficit shrank by nearly 10 percent in February, hinting that the economy may be growing at a faster pace than many economists expect.

The deficit fell to a seasonally adjusted $43.6 billion, lower than the $44.6 billion economists surveyed by the Wall Street Journal had expected. Exports rose 0.2 percent to $192.9 billion in February while imports declined 1.8 percent to $236.4 billion, the Department of Commerce said Tuesday.”

 

The chart below indicates that drop.  We still are running a trade deficit but with the push for more “on-shoring” that deficit may continue to shrink.  This will undoubtedly improve the job market “state-side” and provide added employment.

The bar charts below will show Annual GDP growth rates, corporate profits, and single family home process.   I think each chart indicates recovery is still very incremental and some would say sluggish.  Our politicians in Washington indicate the following:

  • The repeal and replacement of the Affordable Healthcare Act will greatly reduce healthcare costs for the individual consumer.
  • The reduction of “red tape” and regulations for business owners will provide incentives for investment in companies and individual businesses.
  • Rework of the Federal Tax Code and subsequent reduction in corporate and individual tax rates will provide for much greater growth in GDP and corporate profits.
  • Increased trade with other nations will reduce the trade deficit and promote job growth
  • Significant increases in infrastructure spending will definitely improve job growth and job outlook.
  • “Leveling the playing field” relative to NAFTA and other global trade agreements can greatly improve job growth in the United States.

CONCLUSIONS:

All of these things can and possibly will improve job growth and aid our economy.  The big questions is—can Congress get together and pass legislation to get things moving again and in the proper fashion?  This week Congress is going home for Ester vacation.  Another vacation.   What if they remained in Washington, worked through Easter, stayed on the job, and provided their constituents with value-added?

THREE DAYS IN JANUARY

January 31, 2017


In looking at the political landscape over the last fifty (50) years I can truly say I have no real heroes.  Of course, ‘beauty is truly in the eye of the beholder’.  Most of our politicians are much too concerned about their base, their brand and their legacy to be bothered with discerning and carrying out the will of the people. There are two notable exceptions—Sir Winston Churchill and President Dwight David Eisenhower.  Let’s look at the achievements of President Eisenhower.

DOMESTIC ACCOMPLISHMENTS:

  • Launched the Interstate Highway System. Also known as the National Interstate and Defense Highways Act, this act came into effect on June 29, 1956, when President Dwight D. Eisenhower signed it. It authorized $25 billion for 41,000 miles of interstate highways to be constructed in the United States.
  • The National Aeronautics and Space Administration (NASA). On July 29, 1958, President Eisenhower signed the Act that created the National Aeronautics and Space Administration (NASA) which provided for the peaceful and collaborative exploration of space.
  • The Defense Advanced Research Project Agency. Launched the Defense Advanced Research Projects Agency, which ultimately led to the development of the Internet. (Cry your eyes out Al Gore!)
  • Established a strong science education via the National Defense Education Act
  • Sent federal troops to Little Rock, Arkansas for the first time since Reconstruction to enforce federal court orders to desegregate public schools
  • Signed civil rights legislation in 1957 and 1960 to protect the right to vote by African-Americans. After declaring that “There must be no second class citizens in this country,” PresidentDwight Eisenhower told the District of Columbia to use their schools as a model of integrating black and white public schools. He proposed the Civil Rights Acts of 1957 and 1960 to Congress, which he signed into law. The 1957 Act created a civil rights office within the U.S. Justice Department and the Civil Rights Commission; both departments had the authority to prosecute discriminatory cases and voting rights intrusions. They were the first significant civil rights laws since the late 19th Century.
  • Opposed Wisconsin Senator Joseph McCarthy and contributed to the end of McCarthyism by openly invoking the modern expanded version of executive privilege.
  • Desegregated the Armed Forces: Within his first two years as president, Eisenhower forced the desegregation of the military by reinforcing Executive Order #9981 issued by President Harry Truman in 1948.

FOREIGN POLICY ACCOMPLISHMENTS:

  • Deposed the leader of Iran in the 1953 Iranian coup d’̩tat .
  • Armistice that ended the Korean War: Eisenhower used his formidable military reputation to imply a threat of nuclear attacks if North Korea, China and South Korea didn’t sign an Armistice to end the three-year-old bloody war. It was signed on July 27, 1953.
  • Prioritized inexpensive nuclear weapons and a reduction of conventional military forces as a means of keeping pressure on the Soviet Union and reducing the federal deficit
  • First to articulate the domino theory of communist expansion in 1954
  • Established the US policy of defending Taiwan from Chinese communist aggression in the 1955 Formosa Resolution
  • Forced Israel, the UK, and France to end their invasion of Egypt during the Suez Crisis of 1956
  • Sent 15,000 U.S. troops to Lebanon to prevent the pro-Western government from falling to a Nasser-inspired revolution

ACCPMPLISHMENTS PRIOR TO BECOMING PRESIDENT:

  • Becoming a five-star general in the United States Army
  • Serving as Supreme Commander of the Allied Forces in Europe during World War II
  • Serving as the supervisor and planner of North Africa’s invasion in Operation Torch in 1942-43
  • Successfully invading France and Germany in 1944-45, attacking from the Western Front
  • Becoming the first Supreme Commander of NATO
  • Becoming the 34th President of the United States for two terms, 1953 until 1961

All of these accomplishments are celebrated in a new book by Bret Baier and Catherine Whitney. Bret Baier, the chief political anchor for Fox News and talented writer Catherine Whitney, have written a book that comes at a timely moment in American history. I found a great deal of similarities between the transition of Eisenhower and Kennedy relative to the transition of Obama and Trump.  Maybe I was just looking for them but in my opinion they are definitely there.  “Three Days in January” records the final days of the Eisenhower presidency and the transition of leadership to John F. Kennedy. Baier describes the three days leading up to Kennedy’s inauguration as the culmination of one of America’s greatest leaders who used this brief time to prepare both the country and the next president for upcoming challenges.

Eisenhower did not particularly like JFK.  Baier writes: “In most respects, Kennedy, a son of privilege following a dynastic pathway, was unknowable to Ike. He was as different from Eisenhower as he could be, as well as from Truman, who didn’t much care for him.” Times of transition are difficult under the very best of circumstances but from Eisenhower to Kennedy was a time, as described by Baier, as being a time of concern on Eisenhower’s part.  There were unknowns in Eisenhower’s mind as to whether Kennedy could do the job.  Couple that with Kennedy’s young age and inexperience in global affairs and you have a compelling story.  During those three days, though, Eisenhower warmed up to Kennedy.  There was a concerted effort to make the transition as smooth as possible and even though Kennedy and his staff seemed to be very cocky, the outgoing President was very instrumental in giving President-elect Kennedy information that would serve him very well during his first one hundred days and beyond.

On January 17, 1961, three days before inauguration ceremonies, Eisenhower gave a notable and now-prophetic farewell speech in which he looked into the future, warning Americans about the dangers of putting partisanship above national interest, the risks of deficit spending, the expansion of the military-industrial complex and the growing influence of special interest groups on government officials.  Eisenhower’s concerns have become reality in our modern day with technology outpacing legislation and common sense to oversee development of hardware that can destroy us all.  This book is about those three days and brief time-periods prior to and after that very meaningful speech.

If you are a historian, a news junkie, or someone who just likes to keep up, I can definitely recommend this book to you.  It is extremely well-written and wonderfully researched. Mr. Baier and Ms. Whitney have done their research with each reference noted, by chapter, in the back of the book.  It is very obvious that considerable time and effort was applied to each paragraph to bring about a coherent and compelling novel.  It, in my opinion, is not just a book but a slice of history.  A document to be read and enjoyed.

INAGURATION 2017

January 20, 2017


Unless you live under a rock, you know by now we have a new President and a new Vice President.  Here is the way I look at this.  I don’t know if you have ever done any computer programming but programmers have to plan for stored data.  Data goes into a “place-holder”.  Each place-holder is given an appropriate name that is descriptive of the information going into and being removed from that digital location in the program.  Let’s say we have a place-holder named POTUS or President of the United States.  The data we wish to move into or remove from the place-holder is the name of each individual President starting with President George Washington and going to President Donald J. Trump.   Data is moved into POTUS every four (4) years as elections are won or lost.  This remarkable transition of power is accomplished without a shot being fired. Even in very difficult elections, such as the one we have just experienced, outgoing and incoming Presidents recognize they exist in the “continuum”.  Each living President is a member of a very very exclusive minority.  They have been there—been tested—done that—got the “T” shirt.

We have six (6) living presidents as follows:

In my opinion, and it is my opinion, the President of the United States of American is the second most difficult job on the planet.  OK, who’s first—a continuously loving, caring, supportive, time-giving, education-loving parent.   Also, in my opinion, our very best Presidents grow into the job.  I feel no one, and I mean no one is prepared for the “slings and arrows of outrageous fortune” that befall the most experienced individual in a four or eight-year term in office.

In looking quickly at several decisions made by our Presidents, we see the following remarkable challenges they encountered on the way to the Oval Office:

  • Thomas Jefferson—The Embargo Act of 1807
  • Abraham Lincoln—The Civil War
  • Franklin Delano Roosevelt—Executing success after the attack at Pearl Harbor
  • Harry Truman—Decision to drop the atomic bomb
  • John F. Kennedy—Cuban Missile Crisis
  • Jimmy Carter—The Iran Hostage Crisis
  • George Bush—Decision to invade Iraq knowing American lives would be lost

I could probably go on and on but you get the picture. How would you handle the decision to drop the Atomic Bomb?  Could you make it?   It certainly helps if each President surrounds himself with competent and capable cabinet members and advisors.  Sharing the burden is an absolute MUST for successful accomplishment of each task presented each day.   For this reason, I wish President Donald Trump God’s speed in executing duties associated with the office.  No matter how you voted, you have to admit our country definitely needs to come together and rally around our leadership. Let’s get this done.

As always, I welcome your comments.

DODD-FRANK

December 26, 2016


WARNING—This might be a little, if not a lot, boring to some of you maybe most of you.

O.K., with that said, what is the Dodd-Frank Wall Street Reform and Consumer Protection Act? I hear many people indicate the restrictions placed on banks, both national and regional remain THE reason for significantly tight credit since its passage in 2010.   Let’s take a look at the Act, the basics and how bankers feel it is crimping their style.

The Dodd-Frank Wall Street Reform and Consumer Protection Act is a massive piece of financial reform legislation passed by the Obama administration in 2010 as a response to the financial crisis of 2008.  There were early signs of distress relative to the impending crisis: by 2004, U.S. homeownership had peaked at seventy percent (70%); no one was interested in buying or eating more candy. Then, during the last quarter of 2005, home prices started to fall, which led to a forty percent 940%) decline in the U.S. Home Construction Index during 2006. Not only were new homes being affected, but many subprime borrowers now could not withstand the higher interest rates and they started defaulting on their loans.  This caused 2007 to start with bad news from multiple sources. Every month, one subprime lender or another was filing for bankruptcy. During February and March 2007, more than twenty-five (25) subprime lenders filed for bankruptcy, which was enough to start the tide. In April, well-known New Century Financial also filed for bankruptcy.   According to 2007 news reports, financial firms and hedge funds owned more than one trillion ($1 T) in securities backed by these now-failing subprime mortgages – enough to start a global financial tsunami if more subprime borrowers started defaulting. By June, Bear Stearns stopped redemptions in two of its hedge funds and Merrill Lynch seized $800 million in assets from two Bear Stearns hedge funds. But even this large move was only a small affair in comparison to what was to happen in the months ahead.

1.) In simple terms, Dodd-Frank is a law that places major regulations on the financial industry. It grew out of the Great Recession with the intention of preventing another collapse of a major financial institution like Lehman Brothers.

2.) One of the main goals of the Dodd-Frank act is to have banks subjected to a number of regulations along with the possibility of being broken up if any of them are determined to be “too big to fail.”

3.)  To accomplish the goal stated in item number two above, the act created the Financial Stability Oversight Council (FSOC). It looks out for risks that affect the entire financial industry. The Council is chaired by the Treasury Secretary, and has nine members including the Federal Reserve, the Securities and Exchange Commission and the new Consumer Financial Protection Bureau or CFPA. It also oversees non-bank financial firms like hedge funds. If any of the banks gets too big in the council’s determination, they could be regulated by the Federal Reserve, which can ask a bank to increase its reserve requirement—the money it has ‘saved up’ and is not using for lending or business costs.

4.) Under Dodd-Frank, banks are also required to have plans for a quick and orderly shutdown in the event that the bank becomes insolvent—or runs out of money.

5.)  The Volcker Rule is part of Dodd-Frank and prohibits banks from owning, investing, or sponsoring hedge funds, private equity funds, or any proprietary trading operations for their own profit.  The Volcker Rule does allow some trading when it’s necessary for the bank to run its business. For example, banks can engage in currency trading to offset their own holdings in a foreign currency.

There are many financial types that see real issues with Dodd-Frank.  These are as follows:

  • Codifies Too-Big-to-Fail. Rather than eliminating the market’s expectation that certain big financial firms are too big to fail, Dodd-Frank creates an explicit set of too-big-to-fail entities—those selected by the Financial Stability Oversight Council for special regulation by the Fed.
  • Threatens Small Businesses.Dodd-Frank’s complex web of regulations favors large financial firms that can afford the lawyers to analyze them. New requirements will be disproportionately costly for small banks and small credit rating agencies. Dodd-Frank’s complex derivatives rules will further concentrate an already concentrated industry. (I can attest to this fact.  My company has been trying to obtain financing for a local CNG project for over two years.  Just now getting that financing in place.  We are not asking for millions of dollars but even that has come under intense scrutiny.)
  • Hurts Retail Investors.Dodd-Frank gives the Securities and Exchange Commission a new set of responsibilities that distracts it from its core mission. New rules impose costs on nonfinancial companies that will be passed on to investors and consumers. Commission resources will be diverted to protecting the wealthiest investors.
  • Consumer “Protections” Harm Consumers. The consumer financial products regulator established by Dodd-Frank, rather than helping consumers, threatens to raise the prices consumers pay and limit the products, services, and providers available to help them achieve their financial objectives. Various rules, such as price controls on banks’ debit charge fees to merchants, are likely to increase bank fees for consumers and drive low-income customers away from basic banking services.
  • Sows the Seeds for the Next Financial Crisis. Dodd-Frank forces complex derivatives into clearinghouses. These entities will be large, difficult to manage safely, and very deeply connected with the rest of the financial markets. If one of these clearinghouses runs into trouble, the economic ramifications could be massive, which means the government will be tempted to engineer a bailout.
  • Creates New Unaccountable Bureaucracies. Dodd-Frank establishes several new bureaucracies, including consumer protection, data management, and stability oversight agencies that operate with limited transparency and little accountability to the American people.
  • More Power for Failed Regulators. Despite their past regulatory failures, Dodd-Frank gives the Securities and Exchange Commission and the Fed broad new regulatory powers.
  • Unchecked Government Power to Seize Firms. Dodd-Frank allows the government to sidestep bankruptcy and instead seize and liquidate companies. Vague criteria define which companies may be seized, and there is limited judicial oversight of the whole process. The Federal Deposit Insurance Corporation might use the process to prop up failing firms and to favor particular creditors.
  • Interferes with Basic Market Functions. The Volcker Rule, which prohibits banks from engaging in proprietary trading and limits their investments in hedge funds and other private funds, is proving to be difficult to implement. It will be more difficult to comply with and will interfere with the functioning of the market.
  • Replaces Market Monitoring with Regulatory Monitoring. Dodd-Frank relies on the hope that regulators that failed before and during the last crisis will be able to spot problems in the future. For example, Dodd-Frank gives broad new systemic risk oversight responsibilities to the Fed and the Financial Stability Oversight Council. It also raises the deposit insurance cap to $250,000, which will discourage large depositors from monitoring banks and correspondingly increase the likelihood of regulatory intervention.

If you aren’t asleep by now I can’t help you.  This is the long and short of the Dodd-Frank Act.  I would say reform was needed to reign in banks and financial firms that had grossly overstepped their mandates.  GREED was their goal.  They achieved that goal for a short period of time with consequences that have shaken our country and global finance.  Please not that now one banker, insurance company, hedge fund manager or other individual was charged with criminal activity.  Heavy fines were assigned but no one is now doing time for their misdeeds.

 

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