Morpheal

The PRIME RATE GAMBLING CASINO:

A national bank offering a fixed low prime rate, for instance 4
percent, is a better option than fluctuation. We must end the bank
being a prime rate gambling casino. Of that, for example, 4% a nation
should take at least 1 percent to fund good works, social and
government programs, leaving a modest something for its other stake
holders. This tithe upon borrowing would provide tax relief for the
largest portion of the public. The National prime rate would be
absolutely unchanging at all times. Regulation upon borrowing, and
audit of the practices and securities required from borrowers would
need to become more stringent. In fact there is no rational reason, no
real necessity, other than bad habits, for using the prime rate to
control inflation and deflation trends in the economy. There are ample
potential means for doing that, without jerking the prime rate around
and turning borrowing into a national and international form of high
stakes gambling. Steady, reliable, economic activity, inclusive of any
growth in that activity, is a far better goal than the vagaries and
deeply conflicted struggles that predominate when the prime rate is
made victim to gamblers exerting collusive, essentially nefarious
pressures, near to black mail and extortion, in continued attempts to
deliberately manipulate the prime rate. That near to criminality would
essentially cease, ending the forcing down to the floorboards of the
prime by a gang of unethical business toughs, who have no decent sense
of business morality and ethics left in any of them, and no remaining
social conscience.

As to the remaining balance of the money lending industry, the future
ought to be one that is a future not only of strict regulation and
audit by government bank inspectors, but also a future of a solid tax
on profits. That tithe too for the sake of good works, to fund social
and government programs, and in conjunction with a maximum cap on the
rates being charged, would help in regulating the better function of
the entire economic system.

THE CREDIT GAME HAS BECOME A COSTLY “FREE FOR ALL” CHAOS

The credit game has long become a costly “free for all”, jungle of
rules where there are few if any real rules, in the ultimate analysis,
to govern practices in any consistent and rational manner. In part
this has come about because there is no clear set of rules applicable
to all lenders, and there needs to be such a set of enforced rules.

In addition, and far worse, there is no common to all, data base, with
a maximum line of available credit, for all borrowers, where all debt
is monitored for each participant in the economic system. The rules
need to determine how that data base functions and how lenders must
respond to its data. The maze of multiple cards, with multiple
limits, from multiple sources, each with their own peculiarities as to
the agreement being made between lender and borrower, provides no real
limits or controls in regard to the difficulties that anyone might
deliberately or accidentally slip into.

They are a legal and economic nightmare, fraught with unlimited
species of peril, often extremely predatory, and often victimizing.
All of that needs to change. Not to mention that the system as it
exists opens the door to multiple forms of fraud by borrowers, as well
as considerable and dangerous abuses by the lenders. Neither side are
angels in the devilish game of credit.

We might recognize that there are exceptional instances of need to
borrow exceptional funds, such as in business start up situations, and
other types of entrepreneurial ventures, but that type of activity
should not and must not fall under the same umbrella as consumer
credit. It must be dealt with on its own merits, outside of that
consumer credit system. Other factors need to be taken into account.

Oddly enough that is the way it once was, but more and more ventures
have gotten caught up in the mess that an undiscerning and excessively
complex, chaos of credit, a fiscal jungle full of unscrupulous and
paranoid predators, tends to make. Not only that but the more
unscrupulous choose their victims on the basis of whom they feel is
more able to finance a legal battle, and who is not. The predators
know whom to hit with unscrupulous practices in a system where legal
costs aid is not available for what are civil litigations between
borrower and lender, outside of the criminal justice system. That is
another reason why one set of common rules is a necessity. More
matters that involve predatory and wrongful practices become a
criminal justice issue and remove the necessity from hard pressed
individuals as to funding costly civil litigative battles that they
really cannot typically risk or afford..

One of the results has become the forcing of business ventures to use
a credit system that is excessively usurious in its rates, far more
than such ventures had to do similarly in the past. The system has
pushed smaller businesses to borrow in ways that it typically did not
do, and would not do, but now is doing with increasing regularity.

For real and consistent, long term, economic stimulus that entire
system needs to be scrapped and rebuilt, from the ground up. It is no
longer functional. It is no longer just, fair or right, in any way
whatsoever, and it must be changed.

Of course all of that requires the fundamental realization that
society cannot and ought not “spend its way out” of economic
difficulties. That fundamental fallacy must be abandoned entirely
where that spending is understood as being consumer spending. Public
works, infrastructure, basic science and the wisdom of increased R&D,
are a different matter. Nevertheless, consumer spending, driven to
panic by government, to spend more, to try to save themselves from
economic disaster, is worse than bad policy. It is a criminal act by
government, failing to care for the real needs of those they are
responsible to and for.

AUTO INDUSTRY NEEDS LESSONS FROM HENRY FORD

We can see that it is true, that people fail to learn from history.
They repeat its mistakes, but in fact they also fail to learn its more
positive lessons. The latter even more often than the repeating of the
mistakes. A peculiar but noteworthy fact about human kind. They should
become more open to learning what is positive and of value from
history, rather than only striving to make the same mistakes again and
again.

The car industry is its own demon with no one to blame but itself. Its
finger pointing at banks, governments, the marketplace, suppliers,
labor unions, and anything else that its long finger points at, is
simply wrong. It should point that finger only at itself.

The car industry followed the American way too closely. It caused a
massive chain reaction pile up for which it is wholly to blame. It
failed to manage its own course properly. To truly and permanently
remedy this problem we must learn from history. The answer is there.
We only need to look for it. Each manufacturer will necessarily have
to reduce its number of models and rationalize model options,
concentrating on safety and utility, rather than useless glamour. Gone
are the days of pandering to infinite choice. Gone are the days of a
dozen colors and as many interiors for every model. Gone are the days
of a multitude of body stylings, some of which have extremely negative
practical implications as to utility and longevity of the product.
Gone is the new model every year. Gone would be the use of substandard
materials, and the wrong materials, designed in for the purpose of
faster obsolescence.

We have availability of materials and engineering innovations today
that would extend the life of a vehicle substantially above what it
commonly is today. It would reduce the massive scrap piles and lead to
changed values. It would change the structure of financing to make
vehicles more affordable, because financing the price would be
extendable over a longer period of time with smaller payments. The
life expectancy of specific parts can be measured with reasonable
reliability and their exchange planned into maintenance to extend the
life span of the average vehicle. Wear sensors can be employed to
register critical changes. The technologies that can be employed are
not really new, but the culture of automobile obsolescence and the
limitations imposed on the life expectancy of vehicles have led to
ignoring those progressive advances.

The changes necessary are necessary for a changed economics, and for
the sake of the environment. We cannot delay the changes that are
necessitated.

Therein is the actual and long term solution. We what we must do is to
return to the days of Henry Ford's dream of affordable utilitarian
quality. This will greatly reduce costs and control pricing. It will
help to conserve, and save, the environment. It will ease the burden
on the average pocket when it comes to the annual, long term, costs of
transportation. Gone would be the era of impulse and emotional
selling. Gone would be the days of glamour and glitz, hype and hoopla,
of new models every year, in every category. Gone would be all the
errors of automotive history. What that change would provide is the
best possible safety and efficiency, with lasting value and long term
quality in mind. It would, however, end the era that was based on ever
changing style, on fashion trends, on high pressure sales, on gimmicks
and special deals, and all the wasteful inadequacies and
inefficiencies that the industry has become. It would end what the
world can no longer afford. It would change the world, but it would
change the world in an entirely progressive and positive way. It
would be, in fact, Henry Ford’s original dream come true.

Robert Morpheal

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