Time To Try Something New
By David Truskoff
26 September,
2008
Countercurrents.org
The year was 1979. Jimmy Carter was in the White House. G. William Miller was Treasury Secretary. And Chrysler was in trouble. The fact is the entire American auto industry was in trouble, but Chrysler was on the point of failing. Would the federal government help save the nation's number three automaker? Would sixty thousand jobs be saved? A bailout was tried. It was a failure.
Many jobs were not saved and the credit markets took a sever hit.
Chrysler itself was saved to continue to produce junk while the American people bought better Japanese cars. The arrogance of the Detroit hierarchy still believing the often repeated "what is good for general motors is good for America" and getting high on stock options could not see the cliff looming before them. When they went over they took so many American workers with them, as did the collapse of Freddie Mac, Fannie Mae, Wachovia, and finally the Wall Street meltdown.
At the White house gathering to "discuss" the matter, the
very people most responsible for causing the pain of millions of Americans
are pointing the finger at each other and hoping to salvage some political
gain for their own party. It turns my stomach to see Sen. Franks,
Sen. Dodd, and Speaker Pelosi condemning others and calling for more
regulation.
Senator Dill once said, "The holding company promotion racket in this country is one of the most outstanding monetary evils of our time."
Roosevelt warned, "Holding companies must be smashed, their tyrannical power is a menace to the nation."
The beloved American comedian Will Rodgers said, "A holding company is like when you hand the goods to an accomplice while the police search you."
So it was not news to any of the unholy three, Franks, Dodd, and Polosi, that the cancer of the holding companies was growing on the American economy and may prove fatal, yet they caved in to lobby pressure and repealed the 1935 Holding Company Act, one of the most important federal consumer protection laws ever passed. It was born out of the depression and FDR didn't want that to happen again. The Act regulates the parent or "holding" companies that hold the stock of electric and natural gas utilities, so that such owners can't raise rates by charging high fees to utilities for services from their affiliates, and can't speculate in riskier businesses with the ratepayer's money, since such speculation harms utilities' credit and raises their cost of borrowing money, thereby raising customers' utility bills. It prevents the pyramiding of common worthless stock.
The Public Utility Holding Company Act of 1935 was repealed in the Energy Policy Act of 2005. Prior to repeal, the Public Utility Holding Company Act of 1935 required "holding companies," i.e., companies with subsidiaries engaged in the electric utility business or the retail distribution of natural or manufactured gases, to register with the U.S. Securities and Exchange Commission, satisfy certain disclosure requirements, and comply with strict operational limitations. These operational limitations imposed significant geographic and corporate holdings restrictions upon holding companies and effectively limited ownership of public utilities to a small subset of companies focused specifically on the industry.
Pursuant to the repeal, the Securities and Exchange Commission no longer has oversight authority for electric and gas holding companies, and many of the procedural and substantive requirements placed upon public utility holding
companies by the Public Utility Holding Company Act of 1935 have been repealed. The repeal became effective on February 8, 2006.
Obama voted for cloture. McCain did not. It meant that none of the Senators were on record voting for the repeal. It was a yea, nay vote.
Phil Gramm, a Texas Republican and the committee chairman, said repeal of the law was the best way to address California's woes and to assure that the problems did not afflict other states. ''This committee has an opportunity to pass an important bill directly related to the problems of California,'' Mr. Gramm said. ''This can solve the problem in California and prevent similar problems elsewhere.'' Phil Gramm is one of McCain's chief advisors. Holding companies have brought California to its knees.
Warren E. Buffett, the billionaire investor, promised to invest up to $15 billion in the utility industry across the country if Congress strips the law from the books. His company, Berkshire Hathaway Inc., has a stake in the industry after it helped finance the $1.6 billion privatization of the MidAmerican Energy Holdings Company, an Iowa-based utility.
It is, of course, impossible for the average American trying to make mortgage payments and keep the family fed to follow. Bills are pushed through congress with veils that hid the true purpose of the bill. It may also call for clean water at the same time. Who can vote against that?
Today Americans have two choices. They can try and make the system
work as FDR tried with strict enforceable laws to prevent the robber
barons from sucking the very marrow from our economic bones and trying
to control greed.
The other option is, as FDR once said during the depression of the 1930s, "The country needs and unless I mistake its temper the country demands bold persistent experimentation. It is common sense to take a method and try it: if it fails admit it frankly and try another. But above all try something."
It certainly is time to try something new as American capitalism has stopped breathing.
I always felt that there would be a melding someday of the best of
socialism and the best of capitalism. We can put shackles on greed
and we can afford health, education, and progress for all our people.
I would like to see a total boycott of this election. I know that will not happen, but a major effort must be made to involve the college students and get them out to protest the worst Presidential election in our history. Perhaps this is the turning point and the time to try something new and perhaps they can make it known that the party is over and the candidates must now respond to the wishes of the people.
www.erols.com/suttonbear
