Don’t expect good ideas to come from the Bush administration or from congress; ordinary citizens have better ideas and offer workable solutions that should be considered. For example Jack McCloskey from Albuquerque, New Mexico, offers a simple four-point plan:1. The Federal Reserve Banks (FRB) be empowered to loan money to banks at rates that reflect the risk that is being assumed. Use this to rescue the banks that are facing insolvency. Make loans contingent on executive pay restrictions.
2. Rules for participating banks be adopted that require them to publicly disclose the nature and value of all of their assets using a uniform valuation code.
3. The FRBs nominate selected participating banks to act as agents under strict rules to provide short term loans to business using Federal Funds. Use this short term to supplement private banks until they begin fully participating again.
4. Create a short term agency to take applications for private mortgage refinancing under the supervision of bankruptcy judges operating under a uniform plan. Provide a schedule of access to federal funds loans based on FRB supervision to help taxpayers stay in their homes.
This provides liquidity to business, only chanels loans (no unfettered funds) to profligate Wall Street banks, addresses executive pay, helps taxpayers stay in their homes and lets the profligate bankers solve their own problems. Since only loans are provided the taxpayer is repaid for money he puts on the line.
Problem solved. Now why something like this wasn’t even considered?
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