Here is my problem with the activity of the Treasury and Fed. The first bank ever chartered came into being for the sole purpose of obtaining investment capital from Those not normally accounted to be either Wealthy or possessive of Investment savvy. The establishment of Credit Unions took this impulse to the nth degree, thinking to take the Pennies of the Working Class, and turn them into fortunes; at least for Credit Union officialdom. The Thought behind the entire strategy was to dredge the depths to extract the last pfennig for Investment purposes. Suddenly, the Fed and Treasury is telling Us to Stop, and reverse the flow of funds. Huh? Bankers were supposed to be Paid for providing sustainable Investment from compartmentalized Deposits in Type Instruments. We are now told that Bankers did not maintain these sustainable Investments, mixed the compartmentalization of the Deposits, and removed essential distinction between Types of Investment. They follow all this gratuitous information with the statement that the poor bankers cannot make a Living anymore, and need be paid so they can maintain their previous Services (to Whom??) Now We have calls to rescue the Credit Unions, who cannot find the Investments for which they collected 8% Interest for the last half-Century.
We dropped 533,000 Jobs in November, and December numbers are getting somewhat obscene. No one seems to understand the real Costs which are coming Our way! Replacing those Jobs with alternate Employment will cost about $2.5 trillion–not $500 billion–and still fall about $200 billion short of normal Consumer Demand expenditure. New Deal-style Plans for Government action will be a Day Late, and many Dollars short! The real necessity of the current Recession is the most violently opposed by all leadership: consisting of the narrowing of disparity in Income. All leadership has worked to extend that disparity of Income, even when that leadership had proven to be a failure, or the ineptitude of that leadership was so bad they had to get Subordinates to explain Company policy to their Board members. The old program of stealing whatever you can in Salary will have to be revisited in the new, modern economy.
I decided to leave the Stage today with presentation of these three Links. Paul Krugman wonders if We are not going to imitate Japan of the 1990s, James Hamilton suggests We ignore the real Numbers–some of which are even worse than those of the Great Depression. Arnold Kling proclaims there was a systemic failure in the financial sector, though he might sow some confusion in its definition. It is lucky We are in the Christmas Season; What day of Christmas is it anyhow? What? Next Week? Sorry! lgl