The US Financial Bailout and Self-Regulation

With all the news and opinions on the recent US financial bailout effort and bill failure, I would like to offer some insights on how the satconomy framework could have helped prevent this potential for widespread market collapse. The keyword is self-regulation, but distinguished from the common, unsustainable free market version as follows: 

Accountable Self-Regulation: It is true that public companies regularly publish their financial and market results, but those reports are very difficult to decipher for regular market participants. In particular, it is very difficult to perform online audits and inter-entity reconciliation of reported revenues and expenditures, which would go a long way towards preventing overstated profits or understated spending. When entities such as Worldcomm, Fannie Mae, AIG or Merrill Lynch have had to restate billions in cash flow summaries, it shows how current accounting models are not adequate for tracking self-regulation in very large market entities.

In contrast, satconomy promotes the use of the OCAUP accounting model that standardizes the declaration of self-determined limits, currency lifecycle and the publishing of inter-entity transactions that are openly reconcilable. With more eyeballs able to view and audit simplified financial reports in public, it is hoped that self-regulation issues do not have to go undetected for years which could help prevent problems from getting uncontrollably intertwined.

Independent Self-Regulation: As the massive bail out plan points out, everything is intricately tied together in the current free market version. As a financial entity gets larger, the impact of its collapse on the whole market becomes significantly more adverse. This type of dependency makes it difficult to analyze for root causes and target solutions.

Ideally, a healthy market could and would simply accept and survive the natural demise of irresponsible entities that failed to self-regulate. This is the idea behind the cultivation of independent currency brands in satconomy.  The more diversity there is in independent currency brands, the less potential there is for undesirable dependencies between market entities. There would still be inter-entity needs for specialization and product flow in satconomy, but the reliance on a shared currency brand as a transaction instrument is eliminated. There will be more isolated segment fluctuations in contrast to wild swings affecting the whole market.

Influencing Self-Regulation through Non-Cooperation: One of the main reasons that the $700 billion bail-out plan failed to gather enough votes is the perception that it would lead to long-lasting government intervention in the operation of free markets.  With current socio-economic platforms of conservative versus liberal ideals, the practical result is that the market is either (a) left alone to the whims of moneyed investors and lenders, or (b) monitored by powerful regulators that present bureaucratic and selective responsiveness issues. In other words, the options could be framed as a choice between the influence of big money or big government.

Satconomy offers a vastly different option, that of harnessing the cumulative influence of market participants in accepting or rejecting a currency brand in a market transaction. Any entity could issue its own currency brand to support its goals and members, which other entities are free to accept or reject. Market entities and activities that are represented by popular currency brands will thrive, while unpopular entities will feel pressure from sellers that are unwilling to accept disreputable currency brands. This dynamic is not much different than today’s public companies reacting to stock prices. In satconomy, however, public opinion has a more direct impact on purchasing power: it does not matter how much currency you have stashed if you could not spend any of it.

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