Monday, January 3, 2011

Reforms for a Square Deal. I.

I'll borrow the policy label that the great President Theodore Roosevelt used to describe his policies for the common man and woman: A Square Deal. They people deserve a Square Deal from the government and the Ruling Classes. The common people are the ultimate source of national sovereignty in the US, and the ultimate reason it survives. Their national cohesion makes the US exist. They fight the wars. Today begins a series advocating simple and not so simple reforms that will help move the US towards ... what ?

What do we want ? What is our End Point ? What is our metaphorical eschaton for the US ?

We want a happier society more consistent with the Preamble of the Constitution of the US and consistent with our inalienable rights to Life, Liberty and Pursuit of Happiness. I've written elsewhere how this can be accomplished in a broad context of philosophy and also political economics. A happier society would provide near complete freedom for a great majority in the middle, a secure safety net for the poor and considerable regulations for the top - those budding aristocrats. The top pays for the safety net. Simple. I've proven that such a society would be happier [See posts of January 29 and April 9 of 2010]. Now what's the optimal path ?

Today and in coming days I will write about specific reforms that will move us there. First, a simple banking reform.

Banking Reform

There's too much vig in the system. The big banking corporations want a bigger and bigger slice of every transaction and everyone's pay checks. For what ? Nothing. The government provides deposit insurance at a non-profit basis. The Treasury prints the paper money and mints the coins. The debit card systems, the pay day lenders, the fees on bank accounts, the refusal to open accounts for the poor, the fees on every transaction: all are unfair vig the bosses want to loot from the people.

A reform: as a condition of having Federal deposit insurance, any bank or credit union must offer a transaction account for free that a person can use to deposit checks (electronically OR paper) and obtain cash or a debit card. For free, regardless of credit history (as no credit is being given). Now a person with any job can store his money safety and use it in the economic system. He can deposit a check for services rendered (whether from an employer or a friend), and get cash when the check clears. This rule would apply to small business accounts, too. And one more thing: the ability to get a bank check for minimal fee to pay for large expenditures that require checks (car purchase, etc.)

I don't have to suggest reforms for debit cards transaction fees since the Fed has already proposed new rules (after much research) to eviscerate the rapacious fees of the banks. Payday lenders could still exist ... to lend. The same for check cashing services. If they provide value or convenience, they could exist. But the poor could access the normal banking system and ... live freely without the parasites and vig paid.

Krypto Fund

My dog Krypto performed superlatively last year in her money management job. Krypto Fun made a 14.1% total return in 2010, better that most hedge funds. The S&P 500 total return was a bit over 15%; that's 100% equity, while Krypto Fund is less than 50% equity. Obviously Krypto Fund's risk reward is far superior. Good doggie ... here's your fee, a fine dog biscuit.

Word of the Day

"Gracile" - adjective [$10]
Gracile means 1. gracefully slender; 2. graceful.
Sentence: Attractiveness in ladies is not unidimensional: Audrey Hepburn was a gracile beauty; Marilyn Monroe was voluptuously gorgeous, but definitely not gracile.


Bunkerman said...

Bman won all three helmet contests for the 2nd half. Sigh ...

Bud said...

spoos green........oil green............silver green...........yup....QE2 is working alright......SPX 2k comin soon

let's dip this gravy in this hot biscuit my ass

Bud said...

another terrific job by GS for it's shareholders............500million investment in there any doubt that investment will return huge gains for the shareholders ???

any person is free to buy GS shares today or any's a free market........make your own decisions

Bud said...

'reforms'..........end the charade Bman.............let's call this blog by the right name

view from the politburo

Bunkerman said...

re GS & FB ... yes, I think FB is mostly a fad and will flame out soon. GS to lose $ unless they put lipstick on the pig & sell it to their clients.

And yes, I have an FB acconut.

Spin-em said...

The government provides deposit insurance at a non-profit basis. The Treasury prints the paper money and mints the coins. The debit card systems, the pay day lenders, the fees on bank accounts, the refusal to open accounts for the poor, the fees on every transaction

they sould call it

Bunkerman said...

they sould call it Roundtine

"Roundtine" - ???

Spin-em said...


Bud said...

Bman what are your rare-earth investments ?? are you looking to buy any?

do you even know what rare-earth is ??

Bud said...

Bman when does the new contest begin ? what is it

Spin-em said...

short rare earth

Bunkerman said...

I knew what a rare earth was when I was 15.

Do you what makes them special?

No rare earth investments.

Bunkerman said...

I was thinking of skipping the contest. Last time I had to grovel for entries.

Spin-em said...

maybe Jupiter family will try this year.....

Bud said...

Bman have you ever owned GS stock ?? would you buy it if you saw a money making opportunity ?

Bunkerman said...

I think I traded it once on the short side and once on the long side.

Re owning it to make money, at this time, I can't contemplate doing that. Some money is too dirty. Perhaps if they reformed and went back to being a true investment bank.