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The Fault Is in the Repeal

Readers write to say that the segregation of banking types provided for in the Glass-Steagall Act must be restored, 10 years after the provision's repeal; that Twitter is a great way to expand and deepen relationships; and more.
CFO Readers, CFO Magazine
November 1, 2009

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English and U.S. GAAP (generally accepted accounting principles) are the two languages of free-enterprise capitalism ("The Silent Treatment," September). More than 200 years of America's bountiful economic development are the only proof you need. The United States needs more bilingual accountants to help bridge the culture gap and educate others about our calculated financial measures along the path to prosperity.

The segregation of duties laid out in the Glass-Steagall Act must be restored in America's financial regulatory realm. If we do not restore the separation of the insurance, banking, brokering, and investment-banking roles, we are destined to perpetuate chaos, fraud, corruption, Ponzi schemes, pay-to-play, and other non-value-added economic relationships. Before we engage in getting the world's books in order, we must first address the structural deficiencies in America's current regulatory environment.

The President's regulatory reform proposals read as if they were written in anticipation of a financial crisis, not as a result of careful analysis of today's reality — cheap oil and diminished credibility of capitalism because of the 1999 repeal of Glass-Steagall. Please help revive our priorities to include structural checks and balances in our financial system. Debunk the myth of "too big to fail."

The repeal of Glass-Steagall set the stage for the general acceptance of systemic risk by empowering a few to control too many aspects of the financial system. The few elites speculated wildly on oil and other commodity prices. The party is over, and it's time to get back to basics: GAAP and appropriately independent roles of financial responsibility.

Joe Jefferis
Chief Financial Officer
Powerflow LLC
Dayton


All A-Twitter over Twitter

I appreciated your article "Heard on the Tweet" (In Tech, September). Our experience is that Twitter has risen in popularity and will continue to do so because of the increasing use of smartphones to run our lives — both business and personal.

Twitter is simply the best way to communicate on an iPhone, for example. E-mail is too bulky. Twitter is essentially a one-to-many publishing tool.

It is called "social media," so expecting to generate revenue or measurable business benefits at this point is premature. The same was true for the Web, e-mail, and other technology innovations at their inception.

It is a very effective way to expand and deepen relationships and the personal aspects of a business relationship. Twitter can give added personal dimensions to your business interactions, without being intrusive — or too personal!

Much of Twitter is driven by a "Hey, have you seen or heard about this?" dialogue with an easy link to "this" that can be followed from your smartphone. Twitter also has the advantage of being very simple to use and good at self-policing. Our experience with other social-media tools, like Facebook and LinkedIn, is not similar.

We say to our clients, "Do you want to be communicating with your clients, suppliers, referral sources, partners, and advisers on their phones? Twitter is the best way currently to do that."

Elmer Rich III
Principal
Rich and Co.
Chicago

Twitter is just one channel in social media. It is another channel of communication, but call centers have held conversations with customers via telephone, e-mail, and chat for quite some time. Customer-complaint discussion forum Websites have existed for at least a decade. This is really nothing new.

It's evolutionary, not revolutionary.

Yes, corporate communications policies need to be updated and enforced. But before social-media enthusiasts see massive adoption within the enterprise, they'll have to figure out the ROI.

You can read my current ruminations on social media at http://jimrea.blogspot.com/2009/09/reflections-on-social-media-from-smbmsp.html.

Jim Rea
Former Chief Financial Officer & Chief Operating Officer
Ardea Beverage Co.
Minneapolis

Professional marketers are gifted at finding ways to overuse/misuse/abuse new technology, and the same might prove true of Twitter. But the reality is that social media on the whole is a phenomenon that is not likely to go away. As to whether Twitter finds a significant role for business, that remains to be seen. But we ignore it at our own peril: try searching Twitter for comments on your company and you will likely find that you're the subject of a conversation you didn't know anyone was even having.


Milan G. Lazich
Vice President, Corporate Marketing
Magma Design Automation
San Jose, California


Picture Perfect

I enjoyed Josh Hyatt's humorous look at Wall Street artist Geoffrey Raymond ("A Picture Plus 1,000 Words," September). Allowing people to vent (or maybe express other sentiments, but I'm betting that most of the comments are venting) in so personal a way, so close to the epicenter of the pain, is, if I dare say it, a stroke of genius. Thanks for a lighthearted take on a dark chapter in financial history. I may have to spring for one of his posters.

Melissa Hennessy
Via e-mail




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