They allows people to submit short (>400 word) commentaries for broadcast, so I sent them the following missive.<\/p>\n
It’s highly unlikely that they would publish it, I have no professional background in the field, and I’m just not that good a writer, but what the hell.<\/p>\n
Amputating the Financial Industry<\/span>
<\/span>
It is clear that the economy is sick, and it is also clear that the two things that are most directly responsible for this are the finance industry, and real estate.<\/p>\nFor real estate and construction, we have a classic bubble, where prices outstripped values, and the only real solution is for time and no small amount of inflation to put borrowers back above water.<\/p>\n
The finance industry is a different matter. Between the Treasury Department and the Federal reserve, trillions have been spent to recapitalize this industry without a real thaw in credit.<\/p>\n
If the economy is a body, it is clear that there is a serious illness in the financial industry, and the question is whether this is simply a bad infection, illiquidity, or whether this is gangrene, insolvency.<\/p>\n
I would argue for the latter, and with advanced gangrene the only option is to amputate.<\/p>\n
So, how can you amputate, when the finance industry is essential to the functioning of the rest of the economy?<\/p>\n
The answer is that it\u2019s not essential. Reasonable access to credit that is essential.<\/p>\n
The question is not how to preserve Wall Street, it is how to make sure that businesses on Main Street can continue to operate.<\/p>\n
The numbers to do this are actually relatively small, GM and Chrysler got $18 billion to continue to operate, which is a drop in the bucket compared to the more than 8\u00bd*<\/sup> trillion that has been allocated to the finance industry.<\/p>\n
Even just using the $350 billion remaining in the TARP to set up a lending facility for small and medium businesses would go a long way.<\/p>\n
In fact, it would go much farther than throwing more money at the Wall Street.<\/p>\n
You could recruit a workforce quickly from the hundreds of thousands of rank and file financial professionals who have been laid off in 2008.\u2020<\/sup><\/p>\n
This would have the effect of providing the grease to ease the wheels of the economy, without enormous expense of supporting what are walking dead zombie institutions.<\/p>\n
Obviously, you would not want this as a permanent solution, but our economy is more like an octopus than a person, and so lost limbs regenerate over time, so if one were to add a small surcharge, which would render this facility irrelevant and unnecessary once a new finance industry, springs from real market needs.<\/p>\n
Footnotes:
*<\/sup> Economic rescue could cost $8.5 trillion<\/a><\/span>
\u2020<\/sup> Layoffs in U.S. up 59% from 2007<\/a><\/span><\/p>\n<\/blockquote>\nThoughts?<\/p>\n","protected":false},"excerpt":{"rendered":"
They allows people to submit short (>400 word) commentaries for broadcast, so I sent them the following missive. It’s highly unlikely that they would publish it, I have no professional background in the field, and I’m just not that good a writer, but what the hell. Amputating the Financial IndustryIt is clear that the economy …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1004,1064,985],"tags":[],"class_list":["post-193098","post","type-post","status-publish","format-standard","hentry","category-finance","category-media","category-regulation"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/193098"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=193098"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/193098\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=193098"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=193098"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=193098"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}