We initiated coverage on drug contract research company Icon PLC (ICLR) in May 2016; in 17 months, t...
Let’s Memorialize American Values
05/22/2009 12:01 am EST
This Memorial Day weekend is the perfect time to think about what we memorialize. The holiday originally started out as “Decoration Day” to honor those who served the country in war. For many, the three-day weekend serves as the “official start of summer”—a chance to launch the boat, bring out the picnic basket, and officially start wearing white shoes!
But for those of us who watch the financial system, there should be a different approach to the holiday—a chance to “memorialize” those basic requirements for our free enterprise system to continue to succeed and prosper: a sound currency, the rule of law, fiscal discipline, and a fair, reasonable tax structure.
It’s worth thinking about these days, as the dollar falls sharply against most currencies, as our national debt soars, taxes rise, and our financial authorities continue to create money and credit at an unprecedented pace.
It is worth thinking about as our free markets bend to the will of government—with the executive branch and Congress deciding who is qualified to be chief executive officer, how much top executives should be paid, and how their corporate governance should be organized.
It is worth thinking about when we see government pressure on corporate America, as lenders to a bankrupt Chrysler LLC are publicly bullied by the President to give up their preferred debtor status and accede to equity ownership by the United Auto Workers.
It is worth noting when we see attempts to allow judges to adjust the bankruptcy laws to force lenders to belatedly change the terms of home mortgages.
We have prospered over history through the rule of law, a sound currency, sound fiscal policy, and reasonable taxes. Memorialize that.
Corporate America, and in particular, the financial services industry have much to explain. It is impossible to defend the most egregious business practices and corporate governance of the past decade.
Yet, if we demand protection from business, shouldn’t we also demand protection from government?
If we complain about the credit card issuers’ ability to use the fine print to increase finance charges and change the terms of repayment, shouldn’t we be equally horrified as Chrysler dealers see their franchise value wiped out by a similar use of fine print?
While Americans may enjoy a holiday of picnics, baseball, and relaxation, the world markets make no such distinction. They are selling the American dollar simply because they worry that Americans no longer remember the importance of those basic tenets of free markets that have always created economic growth.You don’t have to believe me on this. Just look at the direction of the dollar! What do you think? Join the conversation and have your say.
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