Any attempts at propping up the economy are misguided. Like a person suffering a seizure, the idea is to guide them down safely to the ground so they don't injure themselves. Obama would be wise in guiding the collapse of the banking and mortgage industries. Trying to keep them standing is worthless; AIG being the prime example.
The free market led itself to this situation, so allow it to fall to it's logical conclusion. Just don't let it hit so damn hard it causes even more severe damage.
Okay, I'm almost done with the seizure metaphor.
There was a reason for the FDIC's creation. Already it has caught collapsing banks and minimized the damage that could have otherwise occurred. Yes, some of the mega banks are quite large, and it will be difficult, maybe near impossible, to guide them down. But it will take much more effort to hold them up. Effort as in throwing good money after bad. If they are insolvent, than they are insolvent. No magical wand exists to reverse this fact. Again, AIG as the insurer of all that is insolvent proves this point.
There, now I'm done with the seizure metaphor. However, I'm not done with my point.
So, let the FDIC take over as designed, so it can clean out the toxic debt and toxic management, and then return the bank to the public. It's nothing more than pruning off the dead growth.
Timothy Geithner is unwilling to see the truth in this matter. He's doing nothing more than attempting to maintain the status quo. Possibly because many of his former colleagues are the toxic management that needs to be pruned.
Update: See, now the Washington Post has an article that does a much better job of explaining what I am thinking, as well as explaining the problem. But then, that's why they get the big bucks.....
However, I still stand by my statement that a collapse is inevitable, and that it would be best to simply guide it down safely.
The free market led itself to this situation, so allow it to fall to it's logical conclusion. Just don't let it hit so damn hard it causes even more severe damage.
Okay, I'm almost done with the seizure metaphor.
There was a reason for the FDIC's creation. Already it has caught collapsing banks and minimized the damage that could have otherwise occurred. Yes, some of the mega banks are quite large, and it will be difficult, maybe near impossible, to guide them down. But it will take much more effort to hold them up. Effort as in throwing good money after bad. If they are insolvent, than they are insolvent. No magical wand exists to reverse this fact. Again, AIG as the insurer of all that is insolvent proves this point.
There, now I'm done with the seizure metaphor. However, I'm not done with my point.
So, let the FDIC take over as designed, so it can clean out the toxic debt and toxic management, and then return the bank to the public. It's nothing more than pruning off the dead growth.
Update: See, now the Washington Post has an article that does a much better job of explaining what I am thinking, as well as explaining the problem. But then, that's why they get the big bucks.....
However, I still stand by my statement that a collapse is inevitable, and that it would be best to simply guide it down safely.
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