Citi-Goose and Barney Gander
Earlier in this decade, Congress enacted Sarbanes-Oxley in response to the Enron and various other corporate fiascoes. The essence of Sarbanes-Oxley is to significantly increase public disclosure and to then hold CEOs and other high officials personally liable for what is presented to the public. Accordingly, corporations have taken on huge expenses, not to mention time burdens, to comply with these requirements. Similarly, directors and officers have taken on emotional burdens in managing their personal responsibility for their actions.
This same formula should be made to apply to our officials. Barney Frank and Chris Dodd are frequently cited as having direct responsibility for the failure of Fannie Mae and Freddie Mac as well as the “predatory lending” that underlies our current economic struggles. If America were Americorporation, these two and others would be out of office by now, under investigation if not on trial, all at their own expense. Rather, Barney Frank sits arrogantly in his chair boisterously trying to offload his guilt by blaming everyone else for his obvious abuses. President Obama reels at the executive spending while he and Congress have embarked on what everywhere else would be considered “criminal” amounts of spending. And Chris Dodd has been allowed to promise disclosure of his inside deals with Countrywide Financial while sitting quietly on the side hoping everyone will forget. Where is the accountability that President Obama promised? Some form of governmental Sarbanes-Oxley regulation would go a long way toward preventing this.
Furthermore, state corporate laws have various versions of a cause of action entitled “waste of corporate assets.” If management and/or directors can be shown to have misused or squandered assets they can be held liable to shareholders. This, in part, serves as a true disincentive to many who would otherwise treat the corporation’s assets as their own. Corporate law relies in large part upon the shareholders to take action to ensure their “corporate servants” are performing their duties properly. One method is voting directors in and out — just as our population is able to vote its public officials in and out. But shareholders also have a variety of additional legal actions available to them. Should not we, as citizens, share those same tools? Why should Chuck Schumer be able to get away with pontificating about the auto companies’ deplorable behavior in using federal funds for their own bonuses, while he goes in front of the country describing Congress’ own despicable uses of “pork” — each expenditure aimed to pay back their voters to their own benefit — as de minimus and nothing to worry about?
State corporate laws often have a cause of action against “insider transactions.” Often these laws require that the transaction be approved by a majority of non-insider related directors, subjecting those directors to personal liability if they misjudge the fairness of the transaction. President Obama and the Democrats made a major issue of “lobbyists” and the “same old ways of Washington,” suggesting that all sorts of insider transactions occur in our system. Rather than having to wait until after a violation is discovered, would it not be a better safeguard to have any suspect transaction pre-approved by some truly independent group? Imagine what that would do to straighten out our deficit.
President Obama and his minions sell a notion that suggests that President Bush is responsible for all the evils that exist today. Therefore, since the right saviors are now in office, it is sold that we need not be concerned about their potential abuses. First of all, this is nonsense. The Democrats have controlled Congress for the past two years. And even during the preceding “Republican controlled” Congressional years, the Democrats were able to block many of the crucial actions President Bush and others sought to take to stop the absurd lending practices that existed. Putting aside the Carter and Clinton years, it was Barney Frank, Chris Dodd (assisted by minority shakedown artists), and ACORN who forced banks to enter into lending practices they otherwise would never engage.
In 2001, the White House budget request warned of the dangers of Fannie Mae and Freddie Mac. In 2003, it further warned of a “systemic risk” that could spread beyond the housing sector. The administration pushed for a regulatory agency to oversee Fannie and Freddie only to be blocked by Democrats including Barney Frank who argued that there was no crisis, these institutions were fundamentally sound financially, and that any pressure against them would cause a lessening in terms of affordable housing.
In 2005, Alan Greenspan gave clear notice of the dangers we were facing in the absence of strengthened regulations. In 2006, Senator John McCain co-sponsored legislation for more regulation in the Senate Banking Committee, which all the Democrats voted against. The legislation was never brought to the Senate because Republicans believed they would never be able to push it through. If this level of denial and failure to properly oversee practices had occurred in any corporation, Barney Frank would have been the first to haul them into hearings so that he could humiliate and punish them on C-SPAN.
More importantly, this is not the concept that is applied to the banks, auto companies, insurance companies, and so on by this “new” government. Rather, the new managements are forced to live under restraints that did not exist for those who claimed to have created the problems in which they find themselves. The changes are prospective there and ought to be generously applied to those in public office today — especially those with oversight responsibilities.
Why should Nancy Pelosi be allowed to waste our assets on her exorbitant airplane? Even John McCain was able to embarrass President Obama into forfeiting the ridiculous helicopter that had been ordered for him. Imagine if the public, as shareholders, could join in the act. President Obama heralds his great transparency in posting on the Internet how his “stimulus” money will be spent. Yet the public has no means to do anything about it. A Sarbanes-Oxley-like rule would help ensure that the disclosure is truly as full as he suggests it will be. Some form of a “waste of national assets” law would help ensure there is little offensive in the full disclosure. Some form of holding others personally liable for vetting in advance any insider-like transaction would greatly inhibit abuses before they occur. It is shameful that a mayor is forced to resign from office for sharing an apparent politically incorrect, racially-charged photo, yet Barney Frank, charged with oversight while having significantly destroyed our economy, is able to remain in office another day.
If we are going to buy into the Democratic oratory concerning accountability and transparency, we must apply it first to the Democrats. Just as they are now complaining that the banks were given bailout money with no strings attached, we the citizenry are giving President Obama and this Congress preposterous sums of our own with no means to protect ourselves from their abuses. Given that this is the government of excessive regulation, what is missing screams loudly. We should immediately be afforded at least these mechanisms and these officials should be the loudest advocates. If the current government is going to force excessive regulation upon us, they must be subjected to the same. In the long run, that is all that separates us from tyranny.
Silly article. It is as childish a thing as Marxism. I know you’re trying to point out the hypocrisy, the inequity, but you’re ignoring basic human nature. If the government does it, it’s not a crime. That’s the rule everywhere.
Makes perfect sense!
1. Marc Malone:
Yea; Good solid reasoning; So, if a cop does it, it’s okay, right?
While you want to hold our elected officials accountable for their very questionable actions, you are wasting your time. They make sure the rules that the populace lives by don’t apply to them.
That’s how you can tell you’ve elected the wrong people to office.
We’re approaching a crisis point in American politics that can only be resolved by a thorough house-cleaning. The likes of Reid, Pelosi, Frank, Dodd, and Obama must be removed from office as soon as possible. These people do not have the best interests of the country in their hearts, only their lust for power. Power corrupts the weak.
Why is there no mention of George Bush’s American Dream Downpayment Initiative? It was highly touted at the time of passage (2003) as a plan get low income families to buy their own homes. It was a big component of “the ownership society” and every Republican voted for it. http://www.hud.gov/news/releasedocs/addfund.cfm
Sounds great, but how do you propose that we mice bell that cat?
No, Cybergeezer, he’s pointing out that if a cop does it, they’re much more likely to get away with it.
I loved the line, “a clear “insider” transaction.” Very clever!
It should be changed to, “a clear ‘insidehim’ transaction.”
regards
Luke, the problem front and center is not WHO caused this. There are plenty of hands dirty with this mess both Dems and Repubs. One might even argue that it all started with Clinton and his deregulation yada, yada. What people don’t seem to grasp is that this administration is making the problem worse.The problem are great, but let’s focus on them and get them righted. Instead we are being shoved a big plate of Government Goo. The supposedly “rich” have lost 40% in the markets so I am betting they aren’t near as rich as they used to be. How are they going to cover the cost of these progrems? Answer-they are not. It is mathematically impossible for them to do so (whoever they are) We are all going to pay for this and end up with nothing but debt. You will see a few road projects starting, perhaps a few underpriveleged kids will go to a new school. In the meantime the government will OWN all of us. And they are one mean taskmaster. Get us out of the current mess-then enact your socialism if you must. Have you ever stopped to wonder why current admin is pushing all of this through so FAST? The average Joe can’t keep up with it, there is a lot going on behind the scenes -easily found if you look around for it, that isn’t being broadcast or noticed. Cared to death
nancy said today she was giving up her private jets that cost 5 mil per year and that the house would be paid based on performance like private industry from now on. they would submit to drug testing and means testing so they would not get a free ride on medical premiums. an across the board 30% pay cut was also in order. the elected officials in the house get it. now if harry and the senate…….
big bad joe biden also announced today the middle class task force was contemplating hiring some people who are actually in the middle class since all the current members are not. joe said just because he hangs out at home depot once in a while that really doesn’t count as being middle class.
Nosinin, It is important to understand what caused the current problems so that we can figure out ways to undo it, and take steps to prevent doing the same thing again in the future. I believe a driving factor in causing the mess we have was the belief that we can get rich by owning things rather than by actual work. People were persuaded to trade their work (in the form of future mortgage payments from their paychecks) for owning real estate. Similarly, tax breaks were given to oil, gas, and mining companies for owning land (and made retroactive to mulitply the effect). At the same time, bankruptcy laws were changed to be one-sided in favor of lenders. If someone was retired and their primary income was coming from a company pension, and the company made bad financial decisions, the company could go into bankruptcy and reduce those pension payments then come out of bankruptcy and continue operating as a normal company. If that same retired person, now having a reduced income, declared bankruptcy, the judge in bankruptcy court could not change the terms of that persons mortgage. They owed the money regardless of their financial situation. Why should a business be able to declare bankruptcy as a way to reduce payments to individuals but an individual can’t declare bankruptcy to reduce payments to a company? Who are the laws supposed to help, we the people or businesses? Reversing bad policies will not re-inflate real estate prices but it will get people working, which is how we will have to pay for the mess we are in.