TEPCO, Tokyo Electric Power Company, is the on the verge of going under after failing so catastrophically to control their nuclear facilities that were swamped by the March tsunami on Japan. I mention this because an industry that managed to co opt its government, justice system and regulators as thoroughly as TEPCO did, finally destroyed it's shareholders. I believe it was management complacency that pushed short term decisions that ultimately bet the company's existence. Similarly BP's offshore drilling disaster came from complacent management which now risks the independence of the company and a good portion of its shareholders capital. Last year BP made a desperate high stakes deal with Russia which is now falling apart because of Putin's cavalier attitude over private property and the rule of law. I don't think it will be long before BP is bought by another major.
In both cases short cutting prudent precautions in spite of government regulatory and judicial approval did the company and its shareholders no good.
Saturday, June 11, 2011
Blocking Elizabeth Warren
Joe Nocera's editorial today in the New York Times regarding resistance to Elizabeth Warren's nomination to the Consumer Financial Protection Bureau reveals the Republican's ideological conundrum, they express free market support for banks that are too big to fail. Mitch McConnell and most Country Club Republicans support starving the newly formed bureau and then let the concentrated banking sector, the large players not the home town banks, run wild with the consumer.
As Libertarian I am against the need for Dodd Frank and the new bureau being formed by Elizabeth Warren but only if the Too Large to Fail Banks are all split up into pieces that they become small enough to fail without harming our economy. It would be a great Teddy Roosevelt moment in Republican history if Mitch and his Senate colleagues would give up their efforts to block and or stall financial regulations and counter propose a sweeping culling out of duplicative financial rules, agencies and congressional committees along with a simple rule that any bank reaching a certain level of assets be required to split into completely separate entities. I doubt the GOP Senators, other then Rand Paul, have the ideological fortitude to wrap their arms around such a quid pro quo exchange when the bank lobby holds so much sway over the Republican Party.
As Libertarian I am against the need for Dodd Frank and the new bureau being formed by Elizabeth Warren but only if the Too Large to Fail Banks are all split up into pieces that they become small enough to fail without harming our economy. It would be a great Teddy Roosevelt moment in Republican history if Mitch and his Senate colleagues would give up their efforts to block and or stall financial regulations and counter propose a sweeping culling out of duplicative financial rules, agencies and congressional committees along with a simple rule that any bank reaching a certain level of assets be required to split into completely separate entities. I doubt the GOP Senators, other then Rand Paul, have the ideological fortitude to wrap their arms around such a quid pro quo exchange when the bank lobby holds so much sway over the Republican Party.
Subscribe to:
Posts (Atom)