The WaPo headline says “U.S. to Invest in Country’s Banks In Effort to Revive Credit Markets.”

We are not experts on how to rescue dysfunctional banking systems. Paul Krugman who just won the Nobel Prize in economics for his work 30 years ago says that the beefing up banKs strategy – first outlined by Prime Minister Brown a month ago (a Euro weenie in Bacon lingo) – is the right strategy. So for now we will go with that and see how it works.

What we can tell you is:

If this credit is used to invest in the wrong things – Wrong Size House in the Wrong Location, Large, Private Cars, Papier-mache Infrastructure and other drivers of settlement pattern dysfunction – the next crash will be worse and the next time Agencies will not have any money left to bail out anyone.

In the short term the goal must be to create several strong, competitive banks in every New Urban Region.

In the longer term? See the four Elementary Rules to save the US of A’s democracy and our market economy in IT IS ELEMENTARY.


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7 responses to “RESCUE”

  1. Anonymous Avatar

    Lets go back and look at those rules, in English.

    1. Agencies of the nation state (government) must control the market, for the good of the people.

    2. Agencies (government) cannot ask people what they want, they must determine what consumers need. (so much for democracy or representation).

    3. Agencies cannot privatize profit and socialize risk. OK, I’ll buy that one. I assume that means you cannot socialize profit, then. That would mean you cannot socialize “public benefits” which are another form of profits, right.

    4. Agencies (government) tells you how much you are allowed to consume.

    Except for part of number three, are you freaking crazy? Do you actually beleive this is the way to save democracy and a market economy?


  2. Anonymous Avatar

    I agree with Ray. I’ve worked with federal regulators for many years — political types and career people — liberals, conservatives and unknowns — Republicans and Democrats — government activists and free marketeers.

    From all that diversity, I simply don’t remember anyone suggesting that government ought to make choices for consumers or businesses. Many would regulate what disclosures must be made or even push for incentives to ensure broad access to certain products and services. But to decide what limits can be set on purchases or investments of otherwise lawful choices, simply never.

    Beyond preventing the privatization of profits with the socialization of risk, this is craziness.


  3. E M Risse Avatar

    TMT said:

    “I simply don’t remember anyone suggesting that government ought to make choices for consumers or businesses.”

    I have heard lots of them say it and some mean it but I do not agree with them.

    I am surprised and disappointed that you did not bother to read and try to understand what I have actually said in the Four Elementray rules.

    The woods are full of snakes that want to obscure the truth.


  4. Anonymous Avatar

    Are you suggesting that my ‘translations’ are overly succinct, or are you admitting that you have been hiding snakes in the words of obscuration?

    I don’t think I cut too much out, and the chase outlined above is reasonably close to what it appears you meant.


  5. Anonymous Avatar

    Blame others for not understanding when you don’t make sense. And make it a conspiracy, while you are at it.

    Whew, shades of Richard Nixon.


  6. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    While the government is busy with their ‘rescue’ of big banks, the next unintended consequence is surfacing. Mom and Pop are getting out of the market. Who can blame them? The entire market is now infected with government intervention. Can you trust buying a few shares of XYZ Corp. without knowing that one of the nationalized banks is a major shareholder? Will the government sacrifice your share value in an attempt to maintain the bank’s bottom line?

    People are already dumping mutual funds and IRA’s to the tune of 50 billion a week, moving it to cash balances in their local bank accounts. This is very similiar to what occured after the dot com bust, when millions moved from stocks to real estate. But this situation is different. We have moved from merely not trusting Wall Street and politicians, to not trusting the nation itself.

  7. Anonymous Avatar

    We are the same place as last week. We have all the same buildings, same people, same abilities, mostly the same companies.

    The market does not make the nation. Get a grip.

    When this is all over, someone will own all that same stuff – at a much lower price. But in the end, its fundamental value will be the same: places for people to live, eat, work, shop, worship.

    Go out and buy a tool. Use it to make or grow something. You will feel a lot better when you are done.

    And who knows, somwonw may buy it.


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