Van Meerten's picks

Just what is going on in Washington and who is in charge? This is not the way to fix anything!

During the Depression we had a total bank, saving & loan association and financial services failure. We installed regulations to make sure our banks, S&Ls and investment banks would stay separate and secure. There was to be a brick wall between them and each was to have its own and separate mission. Little by little that brick wall was chipped away until be had a S&L crisis.

We didn't learn from that one and let the brick walls be chipped away even more and more.

Everyone assured us that with all the regulations in place at the SEC, FDIC and the oversight of the House and Senate Banking Committees nothing like that could ever happen again. Somewhere along the line Barney Frank Chairman of the House Banking Committee, Chris Dodd Chairman of the Senate Banking Committee and Chris Cox Chairman of the SEC went asleep at the wheel and let us all down.

Years ago after working for a CPA firm in Fort Lauderdale I moved to Atlanta and became an Internal Auditor and passed the Certified Internal Auditor exam. I became a real student of Operational Auditing and found it to be a very valuable tool. Internal Auditors had some standard questions they always asked:

Why does this unit exist? What is its mission. How does it support the Company's mission? How can we tell if it is accomplishing its mission? If this unit didn't exist how would it effect the Company? If it isn't accomplishing its mission how do we fix it and how much will it cost to fix it?

Have you heard anyone in Washington ask these questions?

Back in the 70's there was a professor at Georgia State University named Harvey Brightman who studied corporate problem solving. We had him come speak to our Chapter of the Institute of Internal Auditors to talk about problem solving. He noted that there was a big difference between American corporate problem solving and how the Japanese approached their problems.

The Japanese spent a lot of time defining the problem, measuring the effects on the Corporation, studying the history of the problem and how it came to be. Only after they had studied the problem in depth and knew it from top to bottom did they ever even start on a solution. After their study, the solution was pretty obvious and they had to have a total agreement of al the causes and effects before they proceeded to begin implementing the solution.

In the US however you had to do something immediately. To pause was to show weakness. We ran to a "Get 'er done!" Larry the Cable Guy mentality. Isn't this what Washington is doing now?

We have not figured out how we got in the hole. Were the regulations the wrong ones or were they the right ones but just not enforced properly? If we begin enforcement now will the problem go away?

Who cares! Just "Get 'er done!" Throw money at it and it will fix itself. For good measure add in some provisions on mental health care, the AMT and a lot of other stuff. Who cares if mental health had nothing to do with it and additional mental health funding won't fix it; we are doing something. " Get 'er done!"

We can step back, define the problem, determine how our controls failed us, analyze the regulations and enforcement, then solve the problem rationally and permanently or we can just do something, anything, throw money at it, and Get 'er done!" and we will be throwing money at it for a long, long, long time.


I would enjoy hearing your comments at VanmeertenFund@aol.com

DISCLAIMER: The stocks selected should not be taken as buy/sell recommendations. They are the stocks that were selected by my stock screening process and then each was analyzed before adding or subtracting from the portfolio. Do not concentrate on the stocks but learn the selection process.

Jim Van Meerten
Strategy Lab Open Winner July 2008
VanMeerten The Amateur Strategy Lab 2008

Comments: View Comments |  Friday October 3, 2008