June 7, 2010
To: Congressional Committee on Writing Financial Reform Legislation
From: L.J. Rittenhouse, author, Buffett’s Bites
Never forget our children and our children’s children as you prepare to write historic financial reforms. Write legislation to avoid the dumb mistakes of the past. What are these?
- Advocating policies that promote capital allocation decisions based on accounting fictions and not fundamental economics.
- Instituting tax policies that favor short-term gambling over long-term investing.
- Tolerating corporate reporting in financial statements that is unintelligible, uninformed and provides worthless disclosure.
- Failing to execute policies that draw clear lines between speculation and investing.
- Choosing to promote legal standards of business over moral standards.
You have a rare opportunity to correct these past mistakes and avoid them in the future. Use this checklist to guide your deliberations. Avoiding these mistakes is crucial to get us out of our current economic crisis and build a prosperous and sustainable economy.
My ancestor, David Rittenhouse, patriot, financier, and scientist made General George Washington’s first pair of bifocals. In this family tradition, I aim to focus and realign your vision. Choose wisely so we can leave a better world for our children and children’s children. Here is today’s recommended action:
Action 1: In all your deliberations, choose wisely.