....... .......

Table of Contents

The Family, Society, and the American Catholic Bishops
Why Impeach George W. Bush?
Of Excessive Change, Information Overload, and the NASD’s Hurried Merger with the NYSE

The Next Page
.. The Prior Page
....The Home Page











The Family, Society, and the American Catholic Bishops - Note: The Catholic Catechism in Sections 2207 through 2213 sets out the Church’s teaching on the family’s relationship with society. In section 2209 the Catechism mentions that the principle of subsidiarity should govern society’s view of this subject. In other words decision making that influences the family should be kept in the hands of the family or as close to the family as possible.

The History of America shows steady movement away from family and local control of the factors that most impact American families.

First, in 1803 the US Supreme Court laid down the principle (in Marberry v Madison) that the unelected Supreme Court gets the exclusive right to decide what the US Constitution means. This power grab was not too significant at the time because all government was very small and most government power was vested in the state and local governments very near the nation’s families.

Second, in 1861 the Civil War came along when several states attempted to resist the encroachments of Washington by seceding from the Union. They were blocked in their attempt at the cost of 600,000 killed and wounded. From that moment on, the right of state and local government in both the north and south to control their own affairs was lost. There began a major, unstoppable relocation of governmental power away from the family and the localities toward Washington.

Third, the combination of Marberry v Madison and the Civil War moved ultimate power not only to Washington but more particularly into the Supreme Court. This court was judicious for about a century in it use of this power, but eventually, in 1954, it was prepared to bare its teeth and say in Cooper v Aherns “the constitution says whatever we say it says”. From this point on, the court believed it could go so far as to make up rights out of whole cloth, and just say these rights are now part of the Constitution.

Fourth, wealth and power in the society steadily moved from private citizens and families to Washington. Today approximately 60% of all effort in America is controlled by government via taxes or regulations. This means that only 40% of the fruits of labor is left in the hands of private entities including our families.

Fifth, the founders had fortuitously inserted two features in the Constitution which allowed legislative power in Washington to remain significantly under the control of locals. Members of the House of Representative were suppose to be selected using a ratio of one member per 30,000 voters. Additionally Senators were suppose to be selected by their State’s legislators. This meant that an irrate citizen, who was prepared to spend time and shoe leather, had a chance to run for and perhaps become a US House member. It also meant that Senators were very concerned about issues that local legislators thought were important. Both these features were changed,. Senators are now elected directly so they can win office without particular concern for the local government’s concerns, such as federal mandates. With the House a person now has to have access to at least a million dollars to get his message to perhaps 550,000 people. All these changes mean that average families have little or no chance of influencing officials that affect their situations.

There are numerous examples of how this governmental structure has actually influenced families.

First, sexual mores have changed because of Supreme Court decisions. Today abortion, pornography, birth control pills, gay rights, etc. are widely available and parents have a difficult time controlling their children’s exposure to these things.

Second, jobs security is non existent. Typically workers have to change jobs seven time in a working career. These changes oftentimes mean relocating the family. The flux in the job market is largely caused by importing goods, off shoring service jobs, and to a lesser extent technological change. The technological changed domestically has been spurred on by a desire of local companies to compete with low cost imports. If families had the ability to cut down on the imports and off shoring the tempo of technology change would be cut, and bread winners might only have to change jobs three times rather than seven in a working career.

Third, the need for two bread winners to support a family combined with job uncertainty means that families are forced to relocated to big cities where a family can stay in one house while the working parents change jobs every few years. In a smaller community the number and variety of available jobs makes such job switching impossible so a new job means uprooting the family as well.

Fourth, the family has lost its ability to control the people that the children are going to encounter. In the past more families were located in small towns (or in more homogeneous neighborhoods in larger communities), today people of different backgrounds are encouraged by government programs to live together. They possess, in many cases, very different ideas of what behavior is acceptable. Gays (with the protection of the Supreme Court) live next to traditional families. Low class blacks are given government assistance to move into white middle class areas were they behave in shocking ways.

Fifth, money is short and families can’t afford to send their children to private or parochial schools to associate with a more compatible class of friends. The taxes are high and the chance of getting a raise at work is small because employers are competing with products from China. telephone services from India, and local work done by illegal immigrants. If the family runs a small business the increase in government regulation is likely to kill the enterprise. The only way out of these dilemmas is to seek a government job.

Sixth, no fault divorce is available and many couples facing all these pressures use it to opt out.

Finally the steps that need to be taken to get families back in control of our society are numerous and will be difficult to implement. Moneyed people have gotten control of America’s tax policy, trade policy, foreign policy, war policy, domestic policy, etc. Families need major changes in all these policy areas, and they lack the political levers needed to make these changes. They think that by getting a few sympathetic folks elected to the local school board or state assembly they will see change. Of course, they don’t because of the many Federal mandates which require lower levels of government to spend local tax money and operate local regulatory agencies as the Feds dictate.

America has only one group of leaders that both understand this problem and possess the bully pulpits needed to get things headed in the right direction. These leaders are the American Catholic bishops. They have demonstrated with Amendment #2 in Missouri what they can organize effectively if they want. Now they need to educate their flocks on the importance of subsidiarity and what steps have to be taken to get power back into the hands of families and localities. Will the bishops challenge the centralizing principles that grew out of Marberry v Madison, the Civil War, and the trend for ever bigger government programs? Probably not. Will our families continue to struggle? Probably. ..........(prepared by Hugh Murray on 10/25/2006)

Why Impeach George W. Bush? - It must be noted and admitted that President George W. Bush is obviously a person of limited knowledge and perception. Normally such persons are not held, nor should they be held, to a high standard for proper behavior particularly when the rightness or wrongness of the behavior requires significant analytical ability and/or knowledge of history. Nevertheless, when a person of limited ability gets into a position of great authority and does things that are improper, that person must be held responsible and, if necessary, held up to ridicule..

Why so? First, it is a way of educating the young about what is and what is not proper behavior. Second, it is a way of apologizing to those that were improperly snubbed, injured, or ignored by the actions in question. Third, it restores institutional balances that may have been disrupted by the improper actions.

Applying these principles to the actions of George W. Bush shows that large numbers of young people including young adults have come to believe that unilateral, unjustified, unauthorized war is acceptable for America. These people have been spurred on by the likes of Rush Limbaugh and Bill O'Reilly so the lesson for them will be very difficult. But lengthy, well publized, well prepared impeachment hearings will go a long way to righting this imbalance. Next the impeachment of George Bush would send a message to Muslim populations around the world and to our NATO allies in Europe that the American people are not happy with the belittlement, criticism, warrant less searches, war making, and even torture dished out by the Bush administration. Finally, the impeachment of this President would restore the balance between and among the three branches of government. The executive branch under Bush has systematically moved to reduce the historic rights and prerogatives of the rest of the federal government.

Two closing questions need to be addressed: (A) Should Bush's many sins be recounted here? Probablly not. After all the list is long and it has been recounted ad nauseaum in many places. (B) Should the impeachment of George Bush lead to his removal from office. Again probablly not. (1) It will take months for a well orchastrated, through presentation of all the facts to come out in the impeachment proceedings which will leave very few months left on the Presidental term. So actual removal from office will not be necessary. (2) In fact actual removal from office would lead to the installation of Cheney, a greater worry than Bush, and (3) Bush got into his many messes not because of evil intent but rather because of improper preparation and a lack of intellectual curiosity. ..........(prepared by Hugh Murray on 10/29/2006)

Of Excessive Change, Information Overload, and the NASD’s Hurried Merger with the NYSE - Prof. Heylighen of Belgium has studied excessive change and information overload and has concluded that both single individuals and groups can be adversely impacted by these phenomenon.

Individuals are subject to normal change in their lives - marriage, the birth of a child, divorce , job changes, a new dwelling etc. But if these changes occur to close together or are too sever, physical illness can occur. The individual faced with excess change feels a sense of arousal. This arousal at first triggers anger or aggression followed by fear and anxiety which in turn is followed by apathy, despair and even depression. The sequence is seen in animals, where experts call it the “fight, flight, fright” sequence. An animal faced with a severely stressful situation will first try to fight, then when that fails will try to flee, and finally, when that avenue is unavailing, will “play dead” or freeze.

Members of a group, subjected to excessive change, will exhibit anti-social behavior such as vandalism, hooliganism, or in extreme cases shooting at innocent bystanders. The anti-social behavior is followed a sense of helplessness and “burn out”. This can lead to chronic anxiety, depression, or addiction. Members of such groups will react in excessive ways to minor stimulus. For instance, the people of Western Europe began hoarding canned goods in response to the news that the first President Bush planned to invade Kuwait. The response was totally disproportionate to the announcement. In like fashion economists have noticed that societies subject to excessive change are unable to respond normally to good economic news. Stressed people are disinclined to invest long term, have children, or increase their consumption.

A contributing factor is a decline in adherence to belief systems, be it religious or otherwise. People with no belief system have an even more difficult time coping with change. Such people have no sense of authority or a sense of an organized world view. They operate with a relativistic framework which provides few fixed guideposts with which to put change in perspective.

A few decades ago information was hard to come by and people went to great lengths to gather information. As technology advanced, information was easier to get and disseminate, but the ability of man to absorb and analyze information was soon reached and then exceeded. Today people are expected to handle so much information that the flow itself (particularly if they are actually required to read and react to the information) can cause physical illness.

All this is predicate for discussing what is happening at NASD-R. This is an odd entity which grew out of the financial regulations passed by Congress in the 1930's. At that time the government wanted to regulate the financial services industry but did not want to assume the cost of this regulation. So the companies being regulated were required to join “self regulatory organizations” (SRO) which were supported by the dues of members but which took their marching orders from the government regulator, called the Securities and Exchange Commission (SEC). The large brokerages were already members of the New York Stock Exchange (NYSE) so they simply used it as their SRO. The small firms formed their own organization called the National Association of Securities Dealers (NASD). Control of the NASD was vested in the members on a “one firm, one vote” basis.

In the late 1990's the NASD spun off NASDAQ (NASD Automated Quotation) which was the part that handled “over the counter” trading. This organization is now a public company trading under the symbol (NDAQ). The remaining regulatory entity became known as NASD-R (NASD Regulation). This entity is still under the control of its members only by now it is a rather rich self regulatory organization (1) having collected significant money from the sale of NASDAQ and (2) having collected significant fines from both brokers and firms over many decades for various rules violations.

In the last ten years various financial violations came to light and 9/11 occurred. The regulators, following the direction of the SEC and taking advantage of technology facilitated information flows, began an exponential increase in regulatory requirements that brokerage firms faced. The list is truly awesome: two kinds of Continuing Education were began, Anti Money Laundering rules were installed where the identity of all clients were checked and rechecked, suitability for each client was checked and transactions that did not meet suitability had to be checked out by a supervisor, privacy noticing and protection of data started, supervisors stated initialing of every document in sight, all communications (in and out - e-mails, letters, faxes) were reviewed/approved and retained for lengthy periods, recording devices were installed on most telephones with conversations retained and spot checked by supervisors, brokers working at home were visited annually, all brokers were required to review the firm’s procedures with a supervisor at least annually, etc.

Prior to 2000 securities regulators seemed interested in making sure firms were monitoring their business and retaining certain key records. Each firm had wide latitude in setting up its system. After 2002 the regulators seemed interested in having firm supervisors on record as having knowledge of all trading, all client suitability factors, and even all communications “in and out” of their firm. The program seemed designed to take away any deny-ability for a supervisor of any misstep by any broker. In addition, the new redundant CE programs make it more difficult for a broker misstep to be classed as negligence rather than an intentional act

Large firms with bigger producing brokers found they could deal with all the new regulations because they could hire a bunch of middle manager supervisors and have them do the initialing and reviewing. To pay for all this, the large firms simply cut the payout to brokers and forced them to sell high commission and fee based products. Small firms with smaller producers, where the owner was also the only compliance manager, found they were getting so many new tasks that they began to feel overwhelmed by change and information overload.

In 2006, many of these overwhelmed small firm owner/managers decided to fight back by using the “one firm - one vote” rule at the NASD-R to take over the national Board of Directors which selected the people who wrote the NASD-R rules as well as the small regional Boards that are responsible for enforcing the many rules around the country. The upstarts were surprising successful. The new Board members are scheduled to take office in the beginning of 2007. End of story; no not quite.

The old NASD-R Board in December 2006 suddenly decided it was time to merge with NYSE Regulation. A quick ballot was sent to all NASD members asking for approval of a quickie merger. The deal was sweetened by the offer of a $35,000 payment to every firm if the deal went through. The $35,000 represented a distribution of about 1/4 of the NASD-R’s cash hoard, but it was certainly enough to get the attention of the beleaguered owners of the 5000 plus small brokers that control NASD-R.

The rebellion of these small firm is an example of phase one of the “fight, flight, fright” syndrome discussed earlier. Mary Schapiro is a lawyer, and she runs the NASD-R; Chris Cox is a lawyer, and he runs the SEC; these people, like all lawyers, seek control. They do not seek democracy except for rhetorical purposes. The renegade owners of America’s small B/D’s may win round one, but their victory will be short lived. Their control of the NASD-R, if it still exists in early 2007 when they take office, will come to an end either as it is eventually subsumed into the NYSE or, more likely, as its powers are completely eliminated by new legislation and/or SEC regulation that eliminate America’s experiment with SROs.

What form the coming “flight and fright” phase(s) of this rebellion will take is yet to be seen. In the small firm universe there are likely to be hundreds of mergers as groups of small firms try to become big firms. Surviving small firms are going to have to eliminate a number of products in order to limit the number of rules that apply to them. But many other changes might occur. Sociologists and cultural anthropologists should stay tuned. ........... (prepared by Hugh Murray on 12/27/2006)


This page hopes to bring a common sense, old fashioned view to today's news. The comments displayed on this page were prepared by Hugh V. Murray, who can be reached at hvm@aol.com