ENGLISH FOR CONGRESS POSITION PAPER (Revised January 2012)
The
political fad of Deregulation that has occurred during the past
two decades has brought some temporary benefits to
consumers. These benefits are rapidly being rescinded as
airlines have been forced by higher fuel prices and over a
decade of financial losses to dramatically raise fares and
substantially reduce the number of flights and seats available
to serve the public. Telephone deregulation has
greatly reduced the cost of communications for business and
commerce, but most residential users have seen large increases,
not savings in the cost of their local service.
Outrageous charges for information phone calls, repair service,
etc are now the norm.
Similarly, electric and gas utility deregulation has now made
its full impact upon consumers, and double digit increases in
monthly bills hit consumers as the price caps imposed during the
transition periods end. Large businesses and other large
institutions have been able to take advantage of their ability
to sign long term supply contracts to minimize their utility
costs, but small businesses and residential users have had to
compete for the residual supply remaining and pay much higher
marginal rates for their service. As the
consequence, many rural areas are experiencing large increases
in firewood and coal burning that exacerbates the production of
greenhouse gases and other undesirable impact on the environment
from tree cutting and its consequent deforestation.
The separation and selling off of power generation stations from
power transmission lines has put the public at the mercy of
power brokers like Enron that have artificially manipulated
markets and held whole states hostage to their greed and
extortion. No public benefit has resulted from the
re-pricing and selling off of existing power generation
facilities at inflated prices. The huge financial cost of this
economic artifice is now apparent to all adversely affected by
the huge increases in the cost of electricity provided to their
homes and businesses. What also really galls is the fact
the most of the natural gas produced in the country is taken
from Federal owned lands and waters and is now subject to
unconstrained market manipulations with the public paying the
bill for this speculation.
The solution is for the Federal government to take back control
over the allocation of electricity, natural gas and other
hydrocarbons produced on Federal lands and waters and designate
(i.e., regulate) baseline supplies of these utilities to be set
aside at affordable prices for the needs of state and municipal
governments as well as residential and small business
consumers. The Congress needs to recognize that the
collective market power of large business and commercial
operators to negotiate cut-rate prices for themselves works to
the ultimate detriment of society at large and that compensating
legislation is essential to protect small consumers from market
manipulations and price gouging.
Unfortunately, the Federal government itself is one of the prime
exploiters of utility consumers with its telephone Federal
Access Charge, which allows phone companies to collect this
charge in addition to other basic telephone service charges
regulated by state public utilities commissions. In
addition, the Federal government collects for itself Excise
and Universal Service Fund Charges under the guise of
keeping local phone rates affordable for all Americans.
(My phone bill has not become more affordable since
deregulation, so I wonder who is really getting the
"affordability" benefit). Yet, the Republicans in Congress are
still much more concerned about eliminating their so-named
"death tax" and other taxes on their yet-to-be deceased super
wealthy clients. Apparently, these Republicans must
have discovered a way for the wealthy beneficiaries of the
proposed elimination of this "death tax" and other taxes to take
their money with them (no doubt, the super-rich also already
have made their advance reservations at 5 star lodging in the
great beyond). Meanwhile, the rest of us will continue to
spiral downward into the voracious black hole of ever increasing
personal debt and bottomless Federal budget deficits.
The destructive consequences of financial deregulation over a decade ago have now manifested themselves as more than 8 million jobs lost and as many as 10 million homes having been repossessed or threatened by foreclosure. The causes of these disasters have not been corrected, and derivatives and other exotic financial instruments are still being created with the inevitable onset of an even greater financial meltdown in the future. Fifty to one leverage risks that are created will be again be bailed out to save the greedy from the consequences of their destructive anti-social behavior. The disastrous result will be more legalized counterfeiting by the Federal Reserve System to create the cash needed to fund these bailouts. Current and future generations will be burdened with the inevitable hyper-inflationary destruction of middle class financial wealth and economic security. The only solutions are to restore the Glass-Stegall Act safeguards that were undone by Clinton’s financial deregulation and nationalize and/or break-up the too-big-to-fail financial institutions that are still threatening the stability and viability of the nation’s financial system.
Finally, the organization and composition of the Federal Reserve
System needs to be drastically reformed. The Chairman of
the Federal Reserve Board is the nation's most powerful
financial sector regulator. The immediate past Chairman was an
early disciple of Ayn Rand's philosophy that Federal regulation
was not needed, that the "market" would correct itself, and that
noble capitalists would be the best creators of wealth and
social well-being. In 1998, he issued his famous warning
about "irrational exeuberance" in the stock market and then
refused to use his powers to prevent the tech stock market
bubble from developing. His similar refusal to prevent the
even more destructive housing market bubble has resulted in the
worst economic crisis affecting the world since the Great
Depression. Eight million jobs in the United States were lost
and ten million homes were placed in or threatened by
foreclosure. Financial sector abuses have not been
addressed and and an even greater world economic calamity is
highly likely. The management of the nation's monetary policy
can no longer be entrusted to bankers. The Federal Reserve
Boards at the national and regional levels must be staffed only
by highly qualified academic Economists over the age of 50 whom
have no personal financial holdings or other conflicts of
interest that would compromise their professional and personal
integrity.
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Designed by Imad-ad-Dean,
Inc.