The Blog Of The Securities Industry Professional Association

Republican “To Do” List

checklistVictory last night offers promise and potholes, especially to Broker Dealers 

As I watched the results from the election pour in last night from across the country, I had this sudden wave of Déjà vu  sweep over me.  For some reason I have experienced this same euphoria and reaction to a political landslide before but where and when? After a flipping channels and watching the various acceptance speeches, including the acceptance speech from Senate Minority leader (and soon to be Majority leader) Mitch McConnell, it hit me: We saw this same exact scenario play out in 2010 when the republicans swept into congress on the backs of the Tea Party.  While everyone swooned around Rep. John Boehner, one person immediately questioned the sincerity.   Immediately after the election we wrote about this new and improved change in Washington and we published this piece:  Click here to read “sweeping change in Washington” from November 2010.

I was spot on in my assessment of House Leader John Boehner.  His capitulation on every single issue, and the continued spending, did not result in change but more of the same.  Boehner’s teammate in this constant game was the now presumed Senate Majority leader Mitch McConnell.  These are two career politicians who make almost all their decisions based on whatever the drive by press writes or whatever the latest Marist Poll shows. From Debt limits, to unemployment benefits, to deficit reduction, Dumb and Dumber consistently went public with the following:

1)    “We will not approve debt cap increase without equal  budget cuts”!

2)    “Ok we will approve the debt cap increase with some budget cuts”

3)    “Alright, let’s just approve the debt cap because our numbers are down”

These two proved it was possible to snare defeat from the jaws of victory over and over again.  Despite them, Americans sent an overwhelming message to the country that President Obama is sinking this boat rather quickly.  To me this very well could be the Republicans last chance to get the job done and toward that end I’ve decided to offer some pointers on what to do in the coming year. and hopefully help small Broker Dealers.

1)    Focus on the Economy not Obama care:  The house and Senate need to be sending a series of bills to the President that reduce burdensome regulation and will allow small companies access to capital they need in order to start or grow a business.  Obama care is an albatross that bares the president’s signature.  Get jobs flowing throughout the country and tackle Obama care from a position of strength which would at least allow significant modifications.

2)    Tackle debt and balanced budgets:  Although the House passed a balanced budget several times, Senator Harry Reid in the democratically controlled senate refused to even allow it to be voted on.  This should change immediately.  This back door cover up plan by Reid allowed the President to continue spending on a record pace while at the same time giving stump speeches to admirers on college campuses and accusing the other party of being ‘obstructionist”.  Force the president to repeatedly veto debt reduction and or balanced budgets and then claim its somebody else causing debt problems.

3)    Modify Dodd-Frank Immediately:   This knee jerk reaction law in response to the financial meltdown of 2008 has had devastating effects on small companies and small brokerage firms.  Repealing this sounds like a great idea but perhaps its time to take smaller victories that are feasible than larger victories that are not.  In addition, they should immediately authorize the SEC to encourage the formation of new stock exchanges and Regulatory Authorities to oversee them.   There needs to be an open exchange where small issuers can raise money, trade shares and create the next Google, Facebook or Twitter. Right now there are only a fraction of companies with access to the mighty Wall Street Exchanges. 

4)    Curtail the power of the Federal Reserve:  It has been a wild 14 year ride with the Fed. From Greenspan to Bernanke and now Yellen.  It’s time to move away from an economy driven by the Fed and instead have businesses drive the economic bus with the Fed just a passenger.  A recent concession from the Fed revealed that instead of spending trillions on stimulus since 2008, the fed could have just issued each and every household a check for $55,000!  Instead, the fed has spent years buying bonds, fixing interest rates and playing three card monty with the Wall Street cartel and today we have a high stock market and little else to show for it.  Wall Street needs to be taken off the Fed teat and stop demanding to borrow cheap money so they and their hedge fund buddies can buy up the market. 

5)    Stick to the economy and avoid the bedroom:  This will be one of the hardest things for them to do but above all else, Republicans need to avoid long drawn out ridiculous social issues and concentrate on fixing the economy once and for all.   From the fictitious war on woman to gay marriage to abortion pills, or school prayer, Republicans are always portrayed as the uncaring rich white guys.  A soccer mom struggling with two kids and only a part time job may have an interest in abortion rights or Gay marriage, but there is no doubt that if she and her spouse have higher paying jobs, money in the bank and see their economic conditions improving, they could care less how much health coverage Sandra Fluke receives for her birth control.  I have deep religious convictions on many of these issues, but when I think about paying for my child’s college next year the last thing I will care about is a politician’s views on Abortion, Gay marriage or legalized pot.  Leave all that to the states and concentrate on economic prosperity. 

Here is hoping that real change finally arrives to Washington !


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November 5th, 2014



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