Red Herring, Red Threat and A Red Letter Opportunity
Red Herring, Red Threat and A Red Letter Opportunity
Red Herring
Shame on Obama, shame on Congress. Why punish workers while bailing out their bosses? The recent frenzy to demonize the employees of AIG is a more than a little disturbing.
Shame on Obama, shame on Congress. Why punish workers while bailing out their bosses? The recent frenzy to demonize the employees of AIG is a more than a little disturbing.
Red Herring
Shame on Obama, shame on Congress. Why punish workers while bailing out their bosses? The recent frenzy to demonize the employees of AIG is a more than a little disturbing. If you went to work somewhere and had to sign an employment contract, wouldn't you expect to get paid what you were promised for the work you were told to do? Does it matter how stupid it may have seemed? There's an important distinction between employers and employees. It's the bosses that do the telling. Shouldn't they be the focus?
Who made the rules that created a totally opaque, unbridled and overleveraged mess of our economy? The employees now being pilloried were just following the rules congress had passed. For the most part, their bosses probably did too. After all, they wrote the legislative drafts and lobbied for the changes. They're exactly the rules they wanted.
On the other hand, they did artfully exploit the opacity. Why not when there is no requirement for reserves? They turned America into the hub of a global roulette wheel, ballooning the system with an unlimited supply of cheap paper chips, all the time taking the house percentage. The bonuses under fire are little more than incidental splatter from the bosses' most priveledged trickle-up. I'd say look for the few that doubled or tripled their worth while most were getting halved.
Red Threat?
Many who championed the deregulation of securities now decry federal ownership of financial institutions. They allow that government should perhaps plow some money into failing banks, but argue that it shouldn't gain equity as a result, that nationalized banks are a dangerous departure from our private banking system. They advocate FDIC intervention, an unraveling of good and bad assets, putting sound leftovers back into business and the bad bits up for sale. This, they assert, is in the best interests of a free market.
Of course, in this scenario, we shouldn't be surprised to see the very folks who just siphoned the money out of our economy swooping in to buy up the cut-rate assets. The collateral damage of institutional failure is of as little concern to them as that caused by the devastation of pension, retirement and college funds. Huge profits might be gained by shepherding undervalued, toxic securities into a recovered economy. It is somehow obvious to them that government should not reap these benefits. That may be a free market in the most Darwinian sense, but is it fair? Should investors be discriminated against on the basis of whether or not they are public?
Even Obama suggests that federal ownership ought to be temporary, that "stabilizing the financial system" is the goal, beyond which we merely hope to be repaid and out of the banking business in a restored economy. It's an interesting theory, but one that doesn't really address the structural problems of trying to sustain a global casino in a world of finite resources. Why focus our efforts, and generations of debt, on restoring a system that has repeatedly demonstrated its willingness to swindle the masses? If we want a competetive financial industry, why not explore some alternatives?
A Red Letter Opportunity!
If we believe both in a free market and that government has some responsibility to manage the economy, then why don't we set an example that gives private banks some much needed competition? A trillion dollar stimulous, on a per capita basis, could have landed over $620,000,000 in Whatcom County. If we formed a Local Employment Credit Union to capitalize local production, around $6 billion would become available for loans, using the same deposit reserve ratio as private banks. Could we help the local economy with $6 billion dollars? Even failed local business starts stimulate the local economy. Think about it. What is more likely, that the folks in D.C. can fix the economy of the nation, or that folks here can fix the County's? Just making capital available on a more level playing field might stimulate something more fundamental - our entrepreneurial spirit.
As Local Employment Credit Unions developed portfolios of performing loans, they could offer slightly higher interest rates to local depositors, gain additional reserves and make more loans. Folks might like the chance for their savings to earn more while helping sustain the local economy. That would help restore both credit and confidence. Instead of subsidizing the bosses that just wrecked the game, we could give them a run for their money and see if they can do as well.
Our private banking system has worked to build one of the greatest economies of the world. It also wrecked it. Perhaps our ideological interest in free enterprise need not be quite so categorical. Should private banks have a monopoly on our money? A parallel public banking system might provide much needed monetary stability and present a more competitive environment for private lenders. We might want to try it with the next trillion dollars!
Shame on Obama, shame on Congress. Why punish workers while bailing out their bosses? The recent frenzy to demonize the employees of AIG is a more than a little disturbing. If you went to work somewhere and had to sign an employment contract, wouldn't you expect to get paid what you were promised for the work you were told to do? Does it matter how stupid it may have seemed? There's an important distinction between employers and employees. It's the bosses that do the telling. Shouldn't they be the focus?
Who made the rules that created a totally opaque, unbridled and overleveraged mess of our economy? The employees now being pilloried were just following the rules congress had passed. For the most part, their bosses probably did too. After all, they wrote the legislative drafts and lobbied for the changes. They're exactly the rules they wanted.
On the other hand, they did artfully exploit the opacity. Why not when there is no requirement for reserves? They turned America into the hub of a global roulette wheel, ballooning the system with an unlimited supply of cheap paper chips, all the time taking the house percentage. The bonuses under fire are little more than incidental splatter from the bosses' most priveledged trickle-up. I'd say look for the few that doubled or tripled their worth while most were getting halved.
Red Threat?
Many who championed the deregulation of securities now decry federal ownership of financial institutions. They allow that government should perhaps plow some money into failing banks, but argue that it shouldn't gain equity as a result, that nationalized banks are a dangerous departure from our private banking system. They advocate FDIC intervention, an unraveling of good and bad assets, putting sound leftovers back into business and the bad bits up for sale. This, they assert, is in the best interests of a free market.
Of course, in this scenario, we shouldn't be surprised to see the very folks who just siphoned the money out of our economy swooping in to buy up the cut-rate assets. The collateral damage of institutional failure is of as little concern to them as that caused by the devastation of pension, retirement and college funds. Huge profits might be gained by shepherding undervalued, toxic securities into a recovered economy. It is somehow obvious to them that government should not reap these benefits. That may be a free market in the most Darwinian sense, but is it fair? Should investors be discriminated against on the basis of whether or not they are public?
Even Obama suggests that federal ownership ought to be temporary, that "stabilizing the financial system" is the goal, beyond which we merely hope to be repaid and out of the banking business in a restored economy. It's an interesting theory, but one that doesn't really address the structural problems of trying to sustain a global casino in a world of finite resources. Why focus our efforts, and generations of debt, on restoring a system that has repeatedly demonstrated its willingness to swindle the masses? If we want a competetive financial industry, why not explore some alternatives?
A Red Letter Opportunity!
If we believe both in a free market and that government has some responsibility to manage the economy, then why don't we set an example that gives private banks some much needed competition? A trillion dollar stimulous, on a per capita basis, could have landed over $620,000,000 in Whatcom County. If we formed a Local Employment Credit Union to capitalize local production, around $6 billion would become available for loans, using the same deposit reserve ratio as private banks. Could we help the local economy with $6 billion dollars? Even failed local business starts stimulate the local economy. Think about it. What is more likely, that the folks in D.C. can fix the economy of the nation, or that folks here can fix the County's? Just making capital available on a more level playing field might stimulate something more fundamental - our entrepreneurial spirit.
As Local Employment Credit Unions developed portfolios of performing loans, they could offer slightly higher interest rates to local depositors, gain additional reserves and make more loans. Folks might like the chance for their savings to earn more while helping sustain the local economy. That would help restore both credit and confidence. Instead of subsidizing the bosses that just wrecked the game, we could give them a run for their money and see if they can do as well.
Our private banking system has worked to build one of the greatest economies of the world. It also wrecked it. Perhaps our ideological interest in free enterprise need not be quite so categorical. Should private banks have a monopoly on our money? A parallel public banking system might provide much needed monetary stability and present a more competitive environment for private lenders. We might want to try it with the next trillion dollars!
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