Sunday, December 14, 2008
Where America goes from here? FACT, our financial markets are in gridlock. REASON, dependency on a few large players, industry concentration or lack of diversification. However you prefer to characterize the problem, the end result is the same. SOLUTION, diversification, diversification and more diversification!
How do we get to a more diversified financial market from where we are now? For all organizations such as Citigroup that cannot remain ongoing concerns with private capital, they should be placed into government receivership and their many parts sold off. Money being wasted on the current bailout effort would be much better spent financing the purchase of Citigroup's parts. Existing banks and financial institutions should be excluded from government financing consideration so as not to undermine our goals here. This accomplishes several important national objectives: 1) diversifies the financial community 2) puts more people to work as these new smaller banking organizations will have to restock the manpower pool that had been furloughed over the years. 3) brings credit decision making back to the people doing the borrowing, and 4) makes for a more flexible financial framework for America to grow into the 21st century and beyond.
Lets take note of the winners, and the losers here. The big winners will be the American public as jobs will be created, more banks will means more options for borrowers and credit decisions will once again be made at the local level. The losers, as they should be, current stockholders, bondholders and management.
Moving back toward a fully diversified financial system is in America's best long term interest.
How do we get to a more diversified financial market from where we are now? For all organizations such as Citigroup that cannot remain ongoing concerns with private capital, they should be placed into government receivership and their many parts sold off. Money being wasted on the current bailout effort would be much better spent financing the purchase of Citigroup's parts. Existing banks and financial institutions should be excluded from government financing consideration so as not to undermine our goals here. This accomplishes several important national objectives: 1) diversifies the financial community 2) puts more people to work as these new smaller banking organizations will have to restock the manpower pool that had been furloughed over the years. 3) brings credit decision making back to the people doing the borrowing, and 4) makes for a more flexible financial framework for America to grow into the 21st century and beyond.
Lets take note of the winners, and the losers here. The big winners will be the American public as jobs will be created, more banks will means more options for borrowers and credit decisions will once again be made at the local level. The losers, as they should be, current stockholders, bondholders and management.
Moving back toward a fully diversified financial system is in America's best long term interest.
Labels: bank failures, diversification, economic policy, Financial markets
Tuesday, December 09, 2008
Socialist States of America...America at a crossroad
We have been on a glorious journey for just over 230 years! Capitalism IS the economic framework under which the United States has developed into one of the more successful societies planet earth has known to date. But, just as the Greeks and Romans discovered, the future holds NO guarantees.
The crossroads at which we stand may not spell an end to the United States in name, however, the same may not be said of our unique version of capitalism. With much of our financial system having been nationalized and the auto industry in toe, what industry is next? As increasing amounts of our domestic production become "public property", we inch ever closer to socialism.
Need we be reminded that capitalism is economic Darwinism, survival of the fittest. In so far as the field of play is moderately level (a primary mission of government I might add), economic Darwinism ought to be left to run its course. The argument that Citigroup, or any other company for that matter, is too big to allow to fail is in fact a failure to understand and appreciate capitalism, period. The folks in Washington use all types of buzz words and euphemisms to characterize their policy decisions, however, socialism by any other name is still socialism. The question we need to ask ourselves...is the failure of any single business or industry justification to socialize the United States?
We have been on a glorious journey for just over 230 years! Capitalism IS the economic framework under which the United States has developed into one of the more successful societies planet earth has known to date. But, just as the Greeks and Romans discovered, the future holds NO guarantees.
The crossroads at which we stand may not spell an end to the United States in name, however, the same may not be said of our unique version of capitalism. With much of our financial system having been nationalized and the auto industry in toe, what industry is next? As increasing amounts of our domestic production become "public property", we inch ever closer to socialism.
Need we be reminded that capitalism is economic Darwinism, survival of the fittest. In so far as the field of play is moderately level (a primary mission of government I might add), economic Darwinism ought to be left to run its course. The argument that Citigroup, or any other company for that matter, is too big to allow to fail is in fact a failure to understand and appreciate capitalism, period. The folks in Washington use all types of buzz words and euphemisms to characterize their policy decisions, however, socialism by any other name is still socialism. The question we need to ask ourselves...is the failure of any single business or industry justification to socialize the United States?
Labels: capitalism, financial bailout, socialism, United States of America
