John Wasik

Government isn’t the enemy when it comes to investor protection. Less is not more.

GOP Congressmen and its money-trust allies, though, are busy trying to dismember the Dodd-Frank financial reform law despite the evidence that investor protection had been underfunded when ordinary people needed it the most.

The last decade has been scarred by a stock and housing meltdown, the tail-end of the dotcom blow-up and two recessions. Most Americans are behind on saving for retirement. One would think that investor protection would near the top of the Congressional agenda (in addition to job creation).

Yet it’s clear from regulators that investor protection has become steadily more porous as the financial industry has grown.

A little-read U.S. Securities and Exchange Commission study on broker-dealers and advisers published earlier this year bluntly told the story:

Do you know how your credit score is calculated?

Most people don’t because it’s a trade secret, and the private firms that collect credit data are poorly regulated. You have better chance of reading classified U.S. State Department cables on Wikileaks.

It’s troubling that your so-called “FICO” score, which measures your ability to pay back loans and maintain credit, is such a black box. This one number can determine not only your ability to get a mortgage or installment loan, but how much interest you’ll pay over time.

How important is your FICO score? Some 90 percent of banks use it in determining your finance charges. The lower your score, the higher the interest rate. (The highest-possible FICO score is 850, but even people with stellar credit don’t tend to exceed 825.)

Are you a dope for buying a home in the U.S. right now?

If you need and want one, there’s no harm in that. Yet if you think it’s an investment that will actually appreciate, you’re taking a sucker’s bet.

During the bubble years, the “greater fool” theory prevailed. When you bought a home, you were confident that someone would buy it for a higher price than you paid. “Flippers” prospered from this mass psychology.

Right now, it’s a “lesser fool” market: You’re hoping that you’re not foolish for buying a depreciating asset in a troubled economic climate. Millions stay out of the market just to avoid the feeling of doing a fool’s errand.

Let’s say a broker or banker offered you a way of reaping market gains while protecting your principal. You’d jump at it, wouldn’t you?

Thousands did and were burned to the tune of more than $113 billion in complex “structured” products since 2008, including Florida businessman Charles Replogle and his 86-year-old mother. They were told that the principal-protected notes sold by UBS Financial Services were safe. He bought the six-percent-yielding Lehman Brothers notes from UBS for his mentally disabled brother and mother.

Replogle trusted his broker, a friend whom he had known since he was nine. The Replogles lost every penny of the $130,000 they invested in the notes when Lehman went bust in September, 2008.

It’s no secret that food and energy prices are volatile and rising of late. Yet what’s missing from the latest inflation hand-wringing is what’s down the road. Some commodities are becoming scarcer and that will drive long-term inflation.

While few invest based on scarcity, it’s a prudent long-term strategy. This is not something that will turn up in the latest inflation numbers. In the most recent Consumer Price Index report, core inflation climbed at a 1.3-percent annual rate in April. Gasoline prices accounted for half the increase.

One long-term prediction that has slowly manifested itself over the past 30 years is the concept of peak oil. This theory — borne out by production figures — posits that we have passed the peak of petroleum production worldwide. New oil is not only harder to find, it’s in places that are tougher to access, such as miles below the ocean floor.

When the honeymoon’s over, the hard work begins. Talking about money isn’t romantic, but it’s a great ongoing topic that may ensure a long marriage.

While I don’t think Kate and Will will need any of my humble yeoman’s advice, discussing money issues on a regular basis is a good relationship builder. Here are five ways to steer clear of fiscal disharmony:

Put it all out on the table. The kitchen or dining room table is a great place to discuss expenses, bills, income and goals. Make a point of setting aside some time every month. Surveys show that money problems are among the leading cause of divorce. Is one or both partner a debtaholic? Get help and get a “debt score” to see if you have a problem. Clean the table first, both physically and metaphorically.

Stocks rallied today on surprisingly strong payroll data — but what happened to the exuberant post-bin Laden rally that was supposed to ignite financial markets five days ago? Following the May 1 shooting of Osama bin Laden, the markets rose, then shrugged for the rest of the week until employment data buoyed Wall Street today.

Was that all there was to the bin Laden bounce? The risk in buying stocks, bonds and perhaps commodities eased for a day. But euphoria never lasts long.

The myth that you can benefit from short-term rallies is a dangerous one. By the time you get in the game, the global village has moved on.

As the U.S. deals with one pernicious threat, another one looms: Inflation.

Consumer prices, led by food and energy increases, are the highest they’ve been in two and a half years.

Forecasts can be distracting, so you need to avert your eyes from the headlines. Yes, I know gold hit $1,500 an ounce, silver hit $50 and the dollar was headed for the dungeon, but there’s a household impact you need to gauge first.

Depending upon whom you track, inflation is either on a huge upsurge or will be mild this year. The Leuthold Group sees consumer price hikes ranging from 3.5 percent to up to 8 percent this year. Those who savor metals and commodities see an even higher surge.

The U.S. Government already has a steel truncheon to curb high oil and gasoline prices. It’s called Dodd-Frank.

Petrochemical companies, banks, Wall Street and hedge fund speculators, though, don’t want to see real policing of this financial reform law to go into effect. They make billions with the status quo — at your expense.

In a classic red-herring tactic, House Republicans blame the federal budget deficit, EPA regulations and President Obama for high gas pump prices. Who’s really to blame? Let’s follow the numbers.

Bernie Madoff’s failings are not the mark of some isolated monster, although his crimes are heinous. He is so much like every one of us that failing to recognize this fact will imperil us at every financial turn.

This is one of many revelations in Diana Henriques’s stunning new book The Wizard of Lies: Bernie Madoff and the Death of Trust.

The man who bilked $65 billion from friends, family, institutional investors and charities knew what he was doing. As far as we know, he wasn’t incapacitated from bipolar disorder, substance abuse, schizophrenia or some gargantuan chip on his shoulder to prey upon the wealthy. He stole and lied consistently to all and told Henriques he was fully aware of his mammoth deceit every step of the way.