BS of the week – It’s a tie!

August 19, 2011

I had a lot of choices for my inaugural BS of the week, so I’ve called a tie between Mitt Romney and Rick Perry.

“Everything corporations earn ultimately goes to people.”
— Mitt Romney, Source

No, not really. As someone who has worked in the corporate world, surely Mitt knows that corporations have bank accounts and routinely report their “cash on hand”. For example, Apple recently reported their cash on hand is $76 billion (giving them more cash on hand than the federal government!). So obviously a great deal of corporate money stays in the corporate bank account.

His statement makes it sound like corporations are a benevolent Santa Claus figure just handing out money to people. Some corporate profits do, of course, go to shareholders who are people. However, the vast majority of these profits go to folks who own the most shares such as the owner, CEO/President, other company executives, or very wealthy investors. Nice try, Mitt. But, no dice.

We need a “moratorium on regulation”
— Rick Perry, Source

Does he have amnesia? Let’s think back to last year of the Bush administration. What was it that kicked off the financial crisis that tanked our economy so badly in 2008 that we still are crawling our way out today? Oh yes – banking deregulation that allowed some in the financial sector to play fast and loose – bundling subprime mortgages into mortgage backed securities that no one could understand, performing a smoke and mirrors routine to get them rated AAA by the ratings agencies, and selling them to all the banks. Then when the bottom fell out, the banks were all on the verge of financial collapse and the government went into panic mode and passed TARP to bail them out.

A moratorium on regulation would be like saying we don’t need any laws – we need to free up people to do things their way, we can trust they’ll choose to do the right thing, and there won’t be anything to worry about. We need some amount of regulation for the same reason we need speed limits, laws against identity theft, laws against murder, etc. While many people may be honest and try to do the right thing, not all of them will. We cannot trust businesses and corporations to always do the right thing and make sure people are safe and protected as the financial crisis clearly demonstrated. No one was looking over the shoulders of those in the financial sector which led them to get greedy, create a product that made them tons of money but ended up being worthless and severely damage our economy.

Thanks, but, no thanks on the “regulation moratorium”. I’ll take my air and water clean, my food safe, and my economy stable.