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It occurred to me that given the situation, I should probably turn the last three questions around to answer the last one first and then tackle the other two.
* What could be done within twenty-four to forty-eight hours to resolve the credit and loaning facilities’ issues while still preserving a free enterprise system, a free market economy, our capitalist system and democratic integrity?
Why use the term democracy instead of Republic or Federal system?
For me, I need to make the distinction, especially when creating solutions. There are always many ways to do anything where only a few are benefitted. The tenets of democracy remind me that what is required is to create solutions that benefit all, not just to do for a few at the expense of many.
Democracy was written into our foundation partly as a tenet of freedom but also as a way to measure parity. If opportunities exist only for some, then a Republic will not stand and will, sooner or later, fail to its own devices as it melts into Aristocracy, monarchy or some dissolute type of system.
So, to answer the question – (they’re my opinions, and duly noted – these wouldn’t work in the hands of some people, however they would be as likely to work as most experts’ ideas and more likely to work than some of the bailouts that have already been very expensive failures for not solving the problem.)
What could work in short order under the constraints listed above?
My first inclination is to say, “not a durn thing.” but, that’s not true. We could use solutions that we have that we already know don’t work – that’s always first on my list, so I’ll know where it is and what that was.
* We could close (shut down) the markets for two days so our traders and our investors would get hungry to do some more wild trading. Without that rush for two days, they might have to “get a life”, look around and see where they stand in the real world.
It might help if they had to tour our America for a few days to see all the closed up shops and have to talk to people but I suppose we can’t make them do that. But, it is a thought.
* Now, how would letting them see a land of vast destruction, restart the credit/ markets. Saturday, take them on a ride around America and leave them on the tour till Wed. And, restart the markets while they’re gone – on Tuesday while they’re away. I guarantee, things would get busy in America and in those markets real fast. (This is the principle of “not wanting to be left out.) – it works, ask any kid that’s been there.
* okay, that is mean in a sort of way, but if we want the bankers and decision-makers in the marketplace to work out something on the credit situation, we’re gonna have to get the traders out of the way. The intense rumor-mongering and gossiping there has made the ladies at church socials look like amateurs.
* And, as much as I certainly don’t keep my opinions to myself, obviously, these folks have made more worse that was already a bad thing. The presumption of expertise for many involved in the market arena is easily more powerful by proximity. Within short order it could be averted by closing the markets for two days, locking the bankers in a room and tell them we’re not restarting the exchange until they’ve sorted it out (in a manner acceptable to our economy and all of us, including our government experts.) Let our taxpayers buy the coffee and they can rent the hotel.
* The other option that still has merit is an absolute and complete destruction of the questionable, unsecured and unregulated components at the heart of the mess. Then, let’s get some accountants in there and see what its all really worth from the valid profit / loss ratios and real assets. It would take an act of Congress that would, by necessity need to state unequivocally that no bankruptcies could be filed until all assets had been subjected to full accounting standards and disclosure with a revaluation entered on the Security and Exchange Commission’s books.
Something like this can be done in our immediate regulations provided that the normal process of adding “riders” to the legislation that have no bearing on the issue is averted. The shock of all the market players having to level the playing field by doing this at once would put all in the same boat with the equipment to repair it before it sinks. That is tangible enough for them to understand, anything else isn’t.
* Another full set of ideas, tools and applications for this question to be answered and resolved by operations level options can be found in the recent suggestions being put forward, (in Congress, in America and in the international community.) We all have a very real stake in this and the macro economic situation is integrally multi-dimensional. Therefore, it seems that creating liquidity across the board using free market dynamics does have merit. There are natural ways that could be fast, effective and progressive to flex with overall changes. Done in concert with options listed above, the players in the marketplace could be brought to an understanding that “we mean business” – not graft, corruption, crime and greed, – but business in its true sense. They know how to do it – let ‘em loose and let ‘em do it.
There is one other thing I can think this moment would re-stimulate the credit/lending portion of the market. It is a principle of basic macroeconomics – make those financial and banking executives live for six months in the houses they foreclosed. From there, they will see the potentials and possibilities to make money there with simply some influx of capital. And, believe me, they will not stand still long without making money. It would be good for the community. Neighbors and community leaders could see how its done and get to know one another, if we can keep them from showing those executives the hanging tree up close and personal. Of course, we could just put all of them in jail for the criminal nature of what they’ve done and for the destruction its caused. Under those laws of ill-gotten gain, even their underwear would revert to our ownership due to the laws in place since Reagan and subsequent Congressional choices.
* The basic macro-economic principles upon which this is founded are “you can’t fix, what you don’t know exists,” and “when one thing is changed, all other things change in some measure.” It is the first and the most basic principles, often implied long before resource costs can be plotted, availability identified, structural possibilities quantified and banking/service industry corridors can even be anticipated.
Written by Cricket Diane C “Sparky” Phillips, 09-25-08, USA1