Thinking Outside the Box

As the Madoff scandal unfolds, what is becoming evident is that the largest fraud ever perpetrated in the US financial markets was never detected by the government regulatory agency charged with preventing this kind of thing: the Securities and Exchange Commission. Why? Because it has been so weakened by the presidential appointment of top officials who do not believe in the need to regulate and by Congressional laws that have greatly weakened the regulatory framework. The SEC had abundant warnings: "Madoff Securities is the world's largest Ponzi Scheme," Mr. Markopolos, wrote in a letter to the U.S. Securities and Exchange Commission in 1999." (from WSJ, Dec 13, 2008. Mr. Markopolos worked at a Wall Street firm that competed with Madoff.) Transparency in the financial sector has always been resisted by disreputable firms and pro-business administrations, who prefer to keep their dealings secret. To achieve transparency requires effective and intelligent regulation....

The open source movement has revolutionized the software industry. [insert overwhelming citations here...] Governments the world over are in dire need of assistance and input from the public to help support politicians with the courage and leadership to stand up to the influence of corporate lobbyists. [insert even more overwhelming citations here...first and foremost: change.gov] In turn, the public needs current, up-to-date information about the economy and status of political issues from the government -- which only the government can collect, organize and authorize -- in order to stay informed on these complex and interwoven topics. Enter the open software movement. The programmers who make it run will be inspired to help -- if the way is made clear to allow them to contribute. Keep code open and secure! Online citations: Steady-State Economics by Herman Daly [more to follow....]

I've been reading about a lot of tales of economic woe in the news lately due to the wrenching effects of the subprime mortgage debacle. One of the more bizarre cases is Jefferson County, Alabama , which is currently several billion dollars in debt because, apparently, some of its public officials, with questionable backgrounds and dubious motives, thought they could save on interest payments for the taxpayers by making some risky bond-swapping agreements. In addition, there was some plain old-fashioned graft going on in a county-wide overhaul of the sewer system being awarded to inexperienced companies with ties to the same questionable officials. Though they haven't hit bottom yet, poor Jefferson County appears headed to break the record for municipal bankruptcy. Who's to blame? More importantly, who should pay? The citizens of the county are on the hook to the tune of around $7,000 a person. Who in their right mind can call that fair? Municipal bankruptcy laws were cre...