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MORPHEAL'S SOCIAL COMMENTARY - 221208 (Inclusive of how Henry Fordcan save the Auto Industry)
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 This article may be copied, reproduced, distributed, in any form, by any means, anywhere, by anyone and in fact anyone is encouraged to do so. |
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