Contact: Alex.Karoub@gmail.com
This post is a brief overview of the Automotive Industry which describes some of the fundamental problems that are rarely spoken of. In addition, you will learn of a few of my personal experiences growing up, an environment where I was surrounded by the industry; you will learn of a few perspectives that are shocking and that even only a few within the industry know of. At the end of the post, you will better understand what happened to American Manufacturing and where it stands. The Auto Industry is at the heart of all of American Manufacturing. It is an industry that laid the groundwork for many other types of industries to follow, deemed at one point in history to be the highest of successes. But now, it sheds light on what can become warning signs for other businesses that mistakenly try to imitate it.This months hot topic is whether to bailout/rescue the regressing American Auto Industry. The original owners and their successors abandoned that industry long ago. The auto industry was ravaged and plundered by the wealthiest Americans a half century ago and has been in decline ever since. Shortsighted greed from one generation to the next has been the culprit. Since autos were first mass-produced and America monopolized the world, it was only natural that the American percentage/share of the market would eventually be reduced. However, total growth was enormous and total size of the market continues to grow even through today. Therefore, American growth of exports should have continued to grow, but does not significantly due to pillage and poorly planted roots. In simpler terms, we originally owned the entire pie. The pie was split up. Since the entire pie has grown dramatically, our piece should have grown too. However, the Big 4, 3, 2, … have been loosing market dominance and lead since the end of World War Two. Here we are years later in crisis, and the real question remains whether or not to rescue the real victims of the auto industry, the workers. People were not retrained or re-educated; most were never afforded real education's to start. People are now in despair and hopelessness. From my vantage point now living in Colorado for the last two decades, I have seen the high tech industry follow the auto industry, but at a learned and accelerated rate. Other industries are also copying the auto industry and are laying similar foundations also headed for disaster. Going back to a brief history, the misguided roots show how the decay started and why it spread.Although I did not grow-up during the inception of the Auto Industry, its roots surrounded me. I spoke with a few who were there in the earliest days, and spoke with many who were of the following generation. I absorbed its history by studying it while attending school in Motown (Motor Town), by natural osmosis, and in my earliest career dealing with the car makers.Growing up as a kid I lived less than a mile from Henry Ford's first moving assembly line factory, with GM’s World Headquarters’ just three miles away, and with Chryslers World Headquarters at the end of our street. The first Ford plant (in Highland Park, a city now surrounded by Detroit) and the first of GM's plants were built on the importation of the next generation of former black slaves and white share crop workers from the south (whites similar to former slaves whose white necks were red from working in the sunny fields, hence the mean spirited term 'Redneck'). The joke that Henry Ford must have laughed at and that went around town was "each worker would get paid enough to buy a Ford" (Of course using infamous 'Ford Credit' which was a primary direct withdrawal from their pay checks.) Henry manipulated a built-in guaranteed customer base and tapped double profits, being profits on the cars and the profitable bonded interest. Those were scams that he copied from sharecropping. The remains of their wages were so low that they had to live in shacks; but after all Henry felt, they came from shacks near the fields in the south. So much bigotry and repeated methods from sharecrop economic slavery. Instead of updating and rebuilding the original plants and without regard for the people who were the workers, the emerging auto giants left to go further to the suburbs. So, as they moved and grew they imported shipload after shipload of immigrant economic slaves from Poland (to Hamtramck, MI) and more economic slaves from the Middle East (to Dearborn, MI). There were other minorities imported as well, also imported for economic servitude to supporting industries such as mining, iron works, steel fabrication, glass works, textile, …. Astonishing how easily the game of 'divide and conquer' worked upon the variety of minorities; a game of keeping the workers pitted against each other using race and ethnicity; all to hold back the power of the people from truly uniting. WW2 caused the Automakers not only to retool but also to reevaluate their future directions.Soon, after the victory of WW2, came the Auto Giants grand visions for economically conquering the world via expansion outside the U.S. They quietly boasted that that would leave mainly world headquarters executives, designers, and engineers in the U.S. with the prestigious white-collar jobs. It was felt then (and these are not my bigoted opinions, not from me, yikes) that after all even 'the weaker sex' could do factory labor jobs as seen during WW2 (i.e. Rosie the Riveter). So why not have the 'stupid foreign workers' do the labor outside the U.S. What also gave way to the idea that manufacturing could succeed outside the U.S. was Mexico; since Mexican workers were also imported, but only temporarily during WW2. (By the way, the temporary Mexican workers were never fully paid back as promised during WW2.) A tremendous wave of pride about white-collar jobs became very popular in Detroit and in other automotive communities during the 50's. That vision sat poised on the back burner, but a pre-planted seed was already in place, which was Canada (Windsor) just across the Detroit River. Canada was a much-desired orchestrated precedence for the automakers; it set the stage for grace given by the government as an easily set up protocol for off-shoring jobs. Soon after, the automakers made a migration south to other states, then further south to Mexico, and finally overseas and on to economic slavery in China.Today we see the results of the destructive path the industry has taken. Layoffs, instead of being temporary situations reserved for pauses during new model changeovers, eventually became the mark of permanent labor plant closures. Obvious abandonment of people soon became the name of the automakers game. Along the swathed trail are - Highland Park, Detroit, Pontiac, Flint, Marquette, Gary Indiana, Pittsburgh, Toledo, Cleveland, …, which became known in the early 80’s as 'The Rust Bowl’. Sort of a rape, pillage, and burn mentality, which continues to today. Amazing how well the reasoning of "that's the way it's always been" persists and grows from one generation to the next. Excuse after excuse gave temporary reasoning to incremental geographic movements for global conquer. Temporary excuses ranged from the need to originally amass large workforces, to the hindrance of union pressures, to American workers are lazy, to 'over' government regulation, to …, all straw obstacles as to why the auto industry needed to move as it did. No! Greed is not good. We see how those at the top of the industry have each come in, grabbed with their greed, and left. Now today, we see how greed has caused "what once was, no longer is". So in short, now we see the results of greed, poorly planted roots, and disregard, taking its toll on America. Equally, is the toll on the myriad of unrelated businesses, old and new, that have adopted the auto industries infectious habits of having little to no regard for individual people that make up the American workforce. People.While being raised in the center of Detroit, I experienced many situations involving the Auto Industry; the following although early was not my earliest, and is an actual example. Around 1963, when I was 11 years old, I remember George Romney visiting our house to exchange political favors. Our 23-room house was a rundown relic of a past era, but it cleaned up well as a phony front for wealth and pretentious power. I remember we kids had to pretend that we were Christian Protestants for the visiting Governor (former Chairman of AMC) who was doing his Christian Mormon tradition of visiting the homes of his new legislators. How ostentatious they both were with fraudulent humility of how they rose from their humble beginnings. But more to the point, I remember Romney sitting at our dinning room table and saying "The Big Four Automakers don't have to worry about giving the Unions what they want, as long as the benefits will not be due for decades. By that time the labor plants will be outside the U.S." That shocked my brother Jimmy and I, as we listened playing in the sunroom just off the dinning room. Later we were once again physically punished (beaten-up), this time for listening to adult talk. Jimmy a year older than I, and intellectually gifted, soon became a Page at the State Capital. The accounts he returned with were shocking as well. Growing up as we did would make your head spin and open your eyes to disgust. We continued living in those surroundings until we grew out of our teens. Then we moved on to make our own adult lives, creating better environments much different from what we were born and raised in.Recalling back to my teens, I realized back then the Detroit riots were not only about race, but was also about economic oppression. It was the minorities who were oppressed the worst, most especially African-Americans. Bad however you measure it is bad. (For a better understanding of the decline of Detroit and to better understand the riots, take a look at my other post: “DETROIT RIOTS OF 1967, A RECOLLECTION OF THE TRUTH.” You will also better understand how very close we came to seeing a nationwide repeat of the riots in the coming Spring of 2009.)Unions, workers, man-hours, laborers, …, are not people, they are burdens to be minimized and eliminated. While watching Lee Iacocca being interviewed on Charley Rose last year, I noticed Iacocca admit that he new all the way back during negotiations with the unions, in the early 80’s, that Chrysler would never have to pay off in full on long term commitments to the unions. As Iacocca danced around the issue he said "now the unions will have to face reality". And, as Rose went on to discuss it more, Iacocca was getting more uncomfortable, and eventually managed to change the subject away from discussing past union negotiations. Iacocca was a bit slicker than George Romney was, since Iacocca was on national TV. It made me ashamed that Chrysler World Headquarters was at the end of our street when I was a kid. And, that as a young adult I had so proudly in my early career returned while working for a couple of electronics companies to Chrysler's World Headquarters R&D operations. I thought it an honor to have paid Iacocca's in-house barbershop to cut my hair, even his same barber. Some honor.Following Chrysler, I moved up to deal with GM, and was puzzled. I listened to upper executives at GM complain that they constantly had to bribe Mexican government officials and border guards for GM plants. I guess they also assumed I already new and accepted that the plants in the late 70's had already begun their exodus to Mexico and other countries. I have always looked at bribery as disgusting and wrong, it was not for me or those who I dealt with, that's among the many good things that a mentor named Jack Bazzy taught me as a young kid. By becoming acquainted with other mentors as an adult, I learned to seek out highly reputable employers and quality knowledgeable friends. I learned how to educate myself, and moved up very high in the scientific and technical industries, all of which I enjoyed.Although I grew up in Highland Park / Detroit, that was not anywhere near my top focus in choosing Obama. But, it is a simple history for me to recall, amazing how many more details I can give, but the main points have been brought forward. In addition, from being a mutt of sorts myself, to being a self made man, be that what it may, I have no illusions of being great. What I do mean here is that I quickly recognize many of Obama's unique insights, although mine are different but a bit similar in nature. Like many Obama supporters, I have personal experiences on most issues Obama has raised. So, above is just one of many examples that I can personally give.To better understand manufacturing in America, you can read my other blog: WHAT SCREWED UP MANUFACTURING FOR AMERICA
Blog members can reply here, anyone is welcome to email me at: Alex.Karoub@gmail.com
There was a big misconception that if you give banks billions of dollars, that they'd trickle it down through the economy. Trickle down Economics works in a growing economy but doesn't work in an economy where private industry is sinking. Bailouts should only be offered when we've reached a bottom. Consider the consequences if the government gave money to someone who was living well beyond their means. Need I say more?
Bailouts from the TOP down are not going to work in this spiraling economy. There must be a reward on both ends of the Mortgage industry for a successful turnaround to occur. That is why I'm proposing the following plan.
The first proposal in my plan addresses the borrowers. The government must come up with a plan that is good for borrowers, good for lenders and promotes home ownership even during hard times in which a home is upside down. Recently, borrowers have begun questioning how much good credit is really worth. With home prices in some regions in the United States 40 to 50% below market highs, borrowers are comparing their 700 plus credit score to their $200,000.00 net equity implosion on their home loan. I've spoken to several borrowers who care less about their credit in these conditions.
The second proposal in my plan addresses the economic equity crisis in our banking institutions. More and more banks are nolonger capable of lending money even to good borrowers simply because they don't have money to lend. Most Americans with good credit and good income can attest that they've recently been denied credit by their banks. Often times they are for reasons that are unclear and unexplainable. American Express, Bank of America, CITI Corp, and many other banks are begining to lower credit lines, close lines of credit, and deny applications to credit to both good and bad borrowers.
The answer doesn't lie in providing these banks a blank check. The policies of Corporate America are NOT to give away money in poor economic conditions. Their first objective is to appease investors. It's in their best interest to use the money that is given to them by the Feds to instead buy more banks that have fresh deposits. Rather than become more vulnerable through lending, there objective is to get as much cash in to their balance sheets as possible.
ALL THREE PROPOSALS ARE NECESSARY FOR IT TO WORK:
FIRST PROPOSAL:
Provide an incentive to borrowers to pay their mortgage. Right now, borrowers are being given an incentive to NOT pay their mortgage. This is resulting in bad borrowers walking away from their good credit and homes. Providing incentive is simple. Mortgage companies need to adopt a Principle payment BONUS incentive program similar to a matching corporate 401K plan. It would begin by banks offering to match up to 20% of the additional principle payment. For example, if a borrower pays $1000.00 in additional principal above and beyond their normal monthly mortgage payment, it would look like this. Normal monthly payment $2500.00 + $1,000.00 additional principal. Once the borrower pays that additional principal payment of $1,000.00 on a mortgage with a balance of $480,000.00, the lender then deducts the $1,000.00 off the balance of the loan and additionally matches it by deducting another 20% of the principal payment, which would be $200.00. So, any additional principle would be matched by 20%. So the end result of this transaction would look like this. $480,000.00 minus $1000.00 = $479,000.00 minus the 20% of the additional principal payment ($200.00). The total amount due on the loan would then be $478,800.00. Every month that the borroer pays additional principal on their loan, the bank lowers the balance of the loan by 20% of the principal payment.
SECOND PROPOSAL:
As a result of Proposal #1, banks would NOT need an injection of equity into their balance sheets from the Federal government. They'd in a since be giving themselves an injection and they'd be saving a snowballing mortgage crisis from developing any further. This would encourage borrowers to continue paying on their existing mortgages and would discourage defaulting. Over the long haul, borrowers would be getting 20% off of their existing mortgages and lenders would receive a quick and LARGE injection of dollars from borrowers. But in return for providing this incentive to borrowers, the government would provide a substantial TAX cut to lenders. Providing these TAX cuts would encourage lenders to participate in the program. The lenders would be receiving an injection from their borrowers through additional equity payments, and the lenders would be rewarded with a Corporate TAX cut.
THIRD & LAST PROPOSAL:
Make this program good for 5 years to all borrowers. Allow borrowers who are behind on their mortgages to Reorganize in Chapter 11 Bankruptcy. Only allow participating banks to receive TAX cuts. Put a freeze on all adjustable interest rates.
To prevent further distruction of our Economy, I believe that the government needs to impliment this program IMMEDIATELY. Otherwise, borrowers are going to bring this economy to a hault by defaulting on everything from home loans, credit cards, and autos.
White men in DC saving white men on Wall Street
As details of the highly unpopular bailout plan are tweaked and leaked, it's time the we taxpayer ask ourselves, who are these Congressional saviors, and why do they look exactly like CEOs they're saving?
List of United States political families
List of political families in the United Kingdom
One of the great mysteries of human evolution: the oddness of Europeans.
~@~
As the news broke of the Lehman Brothers meltdown and the rest of the latest financial crisis, John McCain, speaking at a campaign rally in Florida on Monday, angrily declared,We will never put America in this position again. We will clean up Wall Street. This is a failure.And in a statement released by his campaign, McCain called for greater "transparency and accountability" on Wall Street.If McCain wants to hold someone accountable for the failure in transparency and accountability that led to the current calamity, he should turn to his good friend and adviser, Phil Gramm.
As the news broke of the Lehman Brothers meltdown and the rest of the latest financial crisis, John McCain, speaking at a campaign rally in Florida on Monday, angrily declared,
We will never put America in this position again. We will clean up Wall Street. This is a failure.
And in a statement released by his campaign, McCain called for greater "transparency and accountability" on Wall Street.
If McCain wants to hold someone accountable for the failure in transparency and accountability that led to the current calamity, he should turn to his good friend and adviser, Phil Gramm.
Swiss bank paid McCain co-chair to push agenda on U.S. mortgage crisis
For more reasons than one, We need Change we can Believe in
Barack Obama cares for more than insuring the financial viability of the political families of America, he cares about YOU, the Middle Class working people.
He cares for the poor among us and is willing to lend a hand of support to those in need.
When is the last time the political families of America reached down to lend you a hand ?
http://www.youtube.com/user/BarackObamadotcom
http://www.barackobama.com/index.php
YES WE CAN !
Dear Senator Obama, I am writing this open letter due to the irresponsible actions being taken almost daily by Mr. Paulson, Mr. Bernanke and now your body of government is being coerced into going along. Please read my message below. Please take a step back and realize what you, we, are doing here. It is unwise. We must stop now. Please pardon the somewhat less than respectable additives used to describe some members of our government.
Mr. Paulson and the Fed have done it again, panicked. Another 300 point drop last week and walla, they are off to save Wall Street.
I will say this one time: Buying the kind of debt that is on the books of financial institutions is complete madness. We are not talking about buying mortgages here. This is a quote from a Bloomberg article today: http://www.bloomberg.com/apps/news?pid=20601087&sid=aEexq7pcbTY4&refer=home#
``The scope of the government's purchase program is quite significant,'' Merrill Lynch & Co. strategists Akiva Dickstein, Roger Lehman and Kamal Abdullah wrote in a note to clients today. At distressed prices, the Treasury could acquire as much as 10 percent of the outstanding residential and commercial mortgages that aren't already owned or guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae, they said...
"The U.S. Treasury late yesterday gave Congress revised guidance on its plan, which may allow the government to also buy other devalued assets such as car loans and credit-card debt. Paulson also has proposed as much as $400 billion to guarantee money-market mutual funds."
Am I reading this correctly? The US Government is going to purchase auto loans? Purchase credit card debt? Guarantee money-market mutual funds?
These guys are completely nuts. Off their rocker! Find me ONE and I mean ONE sane person with any hint of an economic background and they will tell you, Paulson is nuts! The Federal Government is going insane one 300 point Dow drop at a time.
Let me put something into perspective here. The market has only had a 20% correction since it’s all time high less than one year ago. You heard me correctly, LESS THAN A YEAR AGO!!
With the completely reckless way Wall Street and all other financial firms for that matter lent money to Private Equity, Hedge Funds, Structured Investment Vehicles etc. a 20% correction is peanuts.
After the dot-com crash in 2000 the Nasdaq dropped nearly 80%. We had telecommunications, technology and other bankruptcies of epic proportions. We had billions of dollars evaporate from all of the worthless pipe dream companies launched on a whim with idea of getting rich on the Internet (remember we were mostly dial up then also). The Dow fared well dropping only about 40% and as we sit today it is still above most of the levels of 2006 and all of 2003-2005.
So I ask you, who exactly are we protecting here? If the worthless paper sold as stock of legitimate companies during the tech bubble created an 80% correction in the tech heavy Nasdaq (which still has not managed to maintain ½ it’s highs of 8 years ago), is it not expected that an index like S&P Financial Index should not loose 80% of it’s value after the worthless mathematically engineered garbage pumped onto the balance sheets of nearly every financial institution, pension fund, local government and some individuals collapses? Well as I write this it is down roughly 50%. It touched 70% in July.
Now I am not trying to bore you with this index / history stuff. I am no chart watcher and do not profess to have expertise in this subject, but common sense will tell you, the government did not bail out Worldcom, PSI.net, Enron (well that was a world of it’s own), Global Crossing, Adelphia and Kmart right? Yes, about a Trillion Dollars worth of major bankruptcies (filings over $1 billion) happened over the four years from 2000 to 2003. The government did not bail anyone out, not anyone. So what gives?
I can tell you this for sure. This will not work. This is not the same as the Resolution Trust Corp. bailout. This is dangerous, reckless, stupid and disastrous for the US economy, dollar, interest rates, inflation etc. We will be bringing wheel-barrels of cash to buy groceries if we do this. Trust me. I am not kidding. I am not a doomsayer, conspiracy nut or radical. I have common sense and what Paulson, Bernanke and your government is doing right now is completely crazy.
I am not going to say there are easy solutions here, but when our government is run by to many impotent, bought and paid for weans who will bend over to any idea pushed out there to protect their political future instead of thinking of what is right for the American People, we are in trouble.
Bailing out Bear Sterns, Taking over Fannie and Freddie, and taking a controlling stake in AIG were all wrong. All of these situations could have been dealt with in a fashion that did not involve the government as we did.
Our government is playing chicken with the largest pool of unregulated money on the planet, the hedge fund industry, and until and when they shut this thing down, they will LOOSE.
Sincerely,
Patrick Henry
This reprinted from a great article by Robert L. Borosage. If you agree, send it to your state and federal representatives.
No bail out should go forward without the following minimal conditions:
1. Taxpayer money; taxpayer accountability. The Treasury wants unlimited authority to spend $700 billion in a revolving fund with no rules beyond its own discretion. We can't trust the most spectacularly corrupt administration in memory to decide how they'll cut the deals with the banks. We'd get fleeced. Instead, the law must require an independent entity, with consumers and workers having a majority of the seats on a board with authority to create rules that will prohibit gaming of the bailout. And the Congress - itself sadly compromised by Wall Street money - should be empowered to name independent monitors and to approve all board members.
2. Taxpayers share in the upside. The Treasury bill would buy the bad paper of firms without taking any equity in the firm. That's an invitation to larceny. If a firm decides to auction off its toxic paper to the US agency, taxpayers should get equity in that firm, in proportion to the assets we buy. That will deter profitable firms from using the agency as a dump for their toxic paper. And it will insure that if the bailout works and the firms become profitable, taxpayers, not simply bankers, benefit from the upside.
3. Shut down the casino. No bailout of the predators can go forward without new regulation for the financial system - capital requirements, leverage limits, bans on exotic instruments, transparency, limits on compensation schemes. The shadow banking system - hedge funds, private equity firms - must be brought under the glare of regulators. The Federal Reserve should be directed to police asset bubbles. Over the counter trades - like the credit default swaps - should be brought into public exchanges. Some details should be written into the law; Treasury can be mandated to issue more comprehensive regulations by a date certain, with fast track rules for consideration by the Congress. One thing is clear: any promise to do the bail out now and the regulation later is simply a lie.
4. Curb excessive CEO pay. Wall Street fatcats shouldn't be pocketing millions taxpayers are forced to bail them out. Any firm that applies for relief must agree to limit the compensation of any executive - pay, bonuses and perks - to no more than the highest pay offered a senior federal official. Future compensation should be linked to profitability.
5. Invest in the real economy. Ending the bankers strike is not sufficient to avoid a serious recession, as consumers tighten their belts. A major public investment agenda - $200 billion or more - for developing new energy and conservation, rebuilding schools and infrastructure, extending unemployment and food stamps, helping states avoid crippling cuts in police and health services - is vital to get the real economy moving and put people back to work. If we don't do this, the coming recession will raise the cost of the Wall Street bailout dramatically, as credit card, auto and home loan defaults rise.
6. Aid the victims, not just the predators. No bail out of the banks can take place without a freeze on foreclosures and renegotiation of bad mortgages so people can stay in their homes. Bankers and home owners both made a foolish bet that home prices would keep rising. Many homeowners were misled by predatory lenders to taking mortgages that they didn't understand and couldn't afford. It would be simply obscene to help the predators and not those that they preyed on.
7. Curb the political corruption. No contributions from Wall Street PACs or executives should accepted by any legislator or candidate for national office. Paid lobbyists of Wall Street firms should be banned from any legislative contacts. Any meeting with representatives of Wall Street - and many will be needed to understand what is happening - should be posted immediately by legislators in a central place on the web. All those employed over the past five years by troubled firms seeking relief should be prohibited from profiting from the bailout. Without this ban, legions of executives from Bear Sterns or Lehman Brothers will create consulting firms to profit from cleaning up the mess that they made.
These demands will be met with howls of outrage, a renting of pinstripes. It will require a Congress, lathered with Wall Street contributions, to demand a deal that makes sense. This won't be easy, particularly with Republicans apparently lining up en mass to rubber stamp the Bush administration proposals. But trusting this administration to decide without conditions on how to bailout the banks with $700 billion in taxpayers money is simple lunacy. These banksters have brought the global economy to the brink of the abyss. They want to use that crisis to give the Treasury a virtual blank check to bail them out. Counting the money already spent, more than a trillion dollars will be spent rescuing them from the mess that they have made. Before agreeing to that, Congress has to demand common sense conditions that insure the taxpayers won't get fleeced, and this won't be done to us again.
Make your voice heard. Add your comments below. Write Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi and demand that they stand up. Write Senate Republican Leader Mike McConnell and House Minority Leader John Boehner and tell them that saluting the Bush administration is not sufficient. Tell the Committee Chairs Senator Chris Dodd and Rep. Barney Frank that the Treasury proposal is unacceptable. Finance is too important to be left to the bankers. And the bailout is too costly to be left to the Bush administration.
Senator Obama,
I beseech you to please make it clear to those that are making these government bail out decisions that they are playing a loosing game against the most powerful unregulated pool of money on the planet, the Hedge Fund Industry.
This industry has over $2 trillion in assets and is completely unregulated, primarily incorporated in island nations where they are completely out of the legal jurisdictions of the nations they operate in, have no allegiance to any nation, and have one primary objective: To make as much money as possible indiscriminately, at all cost and risk.
The time has come to understand, "With 6.2 billion people on the planet and economies all interlinked there is no longer any positive role that can be determined by having $2.5 trillion floating around playing havoc with any asset class it so chooses”.
I cannot make this message any clearer. There is much talk about regulation and cleaning up Wall Street and Washington etc. However no person anywhere is talking about the Golden Cow in the room, the Hedge Fund Industry. Without an immediate set of regulations baring players in this industry from operating in the United States under any context, you will loose, the American People will loose and our government will loose.
I leave you with this thought:
There is a story in the Old Testament about a bunch of people who flee repression only to end up building and worshiping a golden cow. This leads to great moral degradation and a sinful and corrupt people. Does anyone see the golden cow here? Lets call the golden cow "hedge funds" for the lack of a better word.
The golden cow analogy: All of the powers that be, including the chiefs of all the financial firms and government leaders across the globe are playing with the golden cow. So why does the subject of hedge fund influence in Wall Street never come up? Why does everyone talk around the subject, talking about 'regulation' etc. without mentioning the golden cow? The golden cow corrupts deeply and its influence is broad.
