Government Has Not Learned Anything From History

SEPTEMBER 13, 2010 BY GEORGE LOVATO JR
Banks Get New Restraints
Front page news reads “Banks Get New Restraints”. Globally governments are agreeing to add more regulation to avoid future financial melt downs. That assumes that all the governments involved have a crystal ball and the view from here is in fact what we will need seven years from now.
And it Was Not Good
As for now we need a little less regulation to allow the financial industry the latitude to maneuver in choppy uncertain economic waters. So now government, the icon of not knowing what is right for business is using its fuzzy image crystal ball to predict and control the future. I cannot disagree more. I have seen firsthand what over stepping regulation can do to an industry. I have seen what the perspective and inexperience of regulators can do to a perfectly healthy business. And it was not good.
Arm Chair Quarterbacking
Imagine for a moment a person that has no real world business experience making sea changing decisions for a financial institution. This government regulator is now arm chair quarter backing the strategy and business practice of a bank. Dangerous. Now put the factors together. More regulations phased-in in the future, of which we know nothing about, along with government regulators whom know little if nothing about how to interpret and integrate these new regulations into safe and sound business practice for banking institutions.
The Complex, the Mundane and the Futile
This is clearly a case where government has not learned anything from history. The government is going to over reach, over regulate, force over capitalization and overkill, at a time when we need to free up time of bankers to get back in the business of lending. Instead we are now going to increase cost and take away valuable time to understand the complex, mundane and futile. Wow!

Mr President – Your Government Should Leave Well Enough Alone!

AUGUST 30, 2010 BY GEORGE LOVATO JR
The Guiding Minds of Corporate America Have Done a Solid Job
Recently we have seen much comment on the fact cash harbored in corporate America is at an all time high. We have also heard how the government is pushing big banking to lend to small business again. In both cases there is a lesson in the news. First cash being at an all time high is in fact a good sign. This in simple terms means that at the appropriate time corporate America will reinvest in itself. The mood, tempo and general indicators of the economy will be right and the capital to exploit the economic condition of the nation will be present. This is a sign of recovery. Corporate America has done a pretty good job of judging the right time in a number of areas. Have there been mistakes and false starts in the past? Certainly. But by and large the guiding minds of corporate America have done a solid job.
The Government Has Made More Mistakes Than American Enterprise
Let’s speak for a minute on the governments comments. First they have played banker in the recent past. They have made what I consider some very controversial decisions in that regard. They helped the weak to survive and intervened in a manner not fitting American enterprises number one rule – survival of the fittest. Now after we have stopped the bleeding of the biggest economic banking hemorrhage in human history, the government wants to tell banks what to do. The government has made more mistakes than American enterprise. They have attempted to change the basic rules of business governance. Now before the timing and condition of the economy is ripe for regenerating the lending cycle again, the government wants to push where pushing is contradictive to its warnings to Wall Street and the financial community at large.
Dear Mr. President, leave well enough alone. Business and the financial community will be its own best judge as to when, where and how it will begin to fuel the rest of the economic recovery