If we throw a trillion dollars into this corrupt system, we won't get solvency. We'll get a bigger mess.
The solution is not to give the same corporate leadership who got us into this mess (over 25 years, not two or ten).
The solution is not to get the federal government into the mortgage and securities business. I heard the financial experts this morning touting the bailout plan, saying that the government will but the mortgages and securities for 50 cents on the dollar, and then, they say, the federal government will MAKE money when the market goes back up. Don't you believe it! That is, unless you think that the government should manage the economy for the next 20 years or so.
And I've already heard the arrogant corporate rejoinder:
What's the alternative?
If you don't want an anti-republican, anti-capitalist corporate system that is essentially insulated from accountability to the public, (which granted them their charters), then what are you going to do instead?
As if incorporation is identical to anti-republican abuse of the corporate charter. As if the titled corporatocracy is entitled to the power they are supposed to be exercising for the sake of public benefit.
As if there is no alternative to the stranglehold on power held by a multiple-titled group of aristocratic pretenders and fascist fantasy peddlers.
There is an alternative.
The STATES, collectively, are the proper, constitutional body to handle this financial meltdown. WHY? Because states have the power to revoke corporate charters, place corporations in receivership, disenfranchise the majority shareholders, issue new voting shares and stocks, hold new board elections, and FIRE the executives.
The states need the funds from Congress to hire regulators to oversee this process.
And for the short term?
While the corporations are in receivership (which CAN be done swiftly), the states can oversee a process by which we CANCEL all mortgages, and send the titles to the people who were paying the mortgages.
This solution would give 100% equity to all property owners (and restore property to others in foreclosure) AND put the mortgage payments back in the pockets of every property holder. (I would argue that renters should share in this too, getting dramatically lower rents.)
WHY do this? Because this "bailout" is going to be paid for by the taxpayers, that's why. It makes no sense to take money from all of the taxpayers for how many years? and hand it over, upfront, to bail out the lenders, whose greed and mismanagement has created this problem.
When we deal with these corporate assholes on a regular basis, they want their money RIGHT NOW, or they screw you over. So I say that they should get the same policy. Let's not pass a bill which pays the taxpayers later. We want the money RIGHT NOW. 100% Equity, and the mortgage payments in our pockets.
This is not just about banks. It's not just about mortgages. This is about an assinine set of policies pursued by these neofascists in the corporate world over the last 25 years in which they proposed that shrinking responsibility and shrinking tax liabilities by the rich and the connected, together with a shrinking share of the wealth for the rest of us, would lead to prosperity for all of us. It was bound to fail, and reasonable people knew it, but they just kept waving their money in our faces and arguing that "success" was an argument for the continuation of the assinine policies.
Critics of this plan wring their hands about a credit crunch. Ya know what? We have a credit crunch now. Is credit going to freely flow after we hand over a trillion dollars? Don't bet on it. We have no guarantee these corporate leaders will do what is in our interest. Have they done so anytime in the last 25 years? NO. We're supposed to believe that, suddenly, these pampered aristocrats who have been trying to set up an aristocratic society are going to have a surge of patriotism and democratic republican sentiment? Don't make me laugh.
My plan will create a credit crunch. Short term. After a brief moratorium, we can go back to writing fractional lending mortgages. But we have to get the corporate system reformed to prevent the kind of mess that we now have. We might as well solve all the related problems, too. No more multiple titles. No more abuse of the corporate charter to leverage a corporate charter into power over every aspect of the lives of a people who are, supposedly, FREE.
I've written three diaries on this.
My proposal is the only one that puts the responsibility for solving this crisis directly into the hands of state governors and state attorney generals, who will face re-election. Congress isn't suited to manage the reforms needed. The Executive Branch isn't motivated to do it. Nor the Fed. Certainly, not the corporate leadership. Congress should send this to the states, and write it into the law that those charter revocation powers that the states have must be used to solve this problem.
You don't give lying scheming anti-republican racketeers a trillion dollars and hope for the best. We need to start throwing these jackasses in jail.