But first, I need your help to sort them out.
How to solve the banking problems in three easy steps...
1) Eliminate ‘insurance’ on all bank accounts, as served by the federal government. All it really becomes is a special tax, with free money for people if a bank goes south.
2) End banking regulation. People are shocked when their bank closes, because, well, isn’t it regulated? Whereas if they /knew/ it was unregulated, and uninsured, they’d spend considerably more attention upon choosing and maintaining accounts, as who’d want to do business with a bank that’s just a glorified gambling establishment?
3) A home loan that is not current should count as a net zero asset until it is sold. Presently, because of regulations, banks are hesitant to let properties go, as when it’s sold, the value is refixed, and they’ll have to actually show all the loses that they are facing. It is unnecessarily inflating the housing market, preventing recovery, and forcing tens of thousands into rental properties where they could be buying their own home.
The problem is regulation and government manipulation of the market. Let the banks that need to fail, well, fail, and let those who are actually strong shine, rather than being in the crowd of me-toos who are held up only because they’ve a huge inventory of bad loans and foreclosures that are counted as assets rather than liabilities.
Any entity that put money into bad investments simply needs to go under. Even if that entity doubles as a regional Federal Reserve Bank.
We can much more easily handle the fallout of selling off assets than what results from propping up stupid businesses and banks and allowing them to come out largely unscathed.
I was against TARP and everything else from the beginning. All it’s all done is indebted us further to China, while bolstering 0bama’s special interests.
The natural capitalistic system is boom and bust, building from the ashes of failure.
The strength of our system was its ability to fail and start over again. Anything that slows down collapse and extends dying companies or ideas or debt, etc. inevitably makes the eventual collapse bigger and harder to recover from. A good analogy is preventing forest fires to preserve forests. It sounds good initially, but the end result is dead forests or forests that in burning sterilize the ground and take decades to recover.
A healthy economy or ecosystem is one with constant failures and fires. The goal shouldn’t be to prevent bank failures, the goal should be to make it extremely easy for banks to fail and to make the investors personally responsible to cover the failure.