"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men."
Woodrow Wilson, after signing the Fed Reserve Act in 1913
Three weeks after the $800 Billion economic bailout and three weeks before the 2008 presidential election we are a nation still leading the world to the precipice. Today England and the European countries will attempt to the bring us back from the edge. The principles should have had time to scramble into their lifeboats and the offshore accounts where names are replaced by numbers. Europe, not so strangled by the hands of Political Action Committees can act swiftly. The plan is based on the Swedish model in 1992 where the government spent 4 percent of it's GDP and bought out shares of the banks in return for a stake in the recovery. This was a bitter pill for the bankers and the investers and while Sweden still experienced a recession, it avoided a total financial meltdown.
It will be much more complicated today because thanks to the mathematical hocus pocus, the assets have been bundled, packaged and made to disappear. Finding them will be no easy task but this, at least, is the second step in recovery. (Acknowledging the problem was the first step) This is not a solution but a tourniquet for a badly bleeding patient. It doesn't take a medical doctor to realize that a blood transfusion to the perpetrator will not save the victim.
The proper treatment is obvious to everyone in the hospital but the doctors are reluctant to prescribe a remedy that is contrary to the interests of the administration, the investors and themselves.
In 1933 after Herbert Hoover remained frozen and seemingly oblivious to the financial crisis, FDR was elected and began to implement the economic philosophy of John Maynard Keynes. http://en.wikipedia.org/wiki/Keynesian_economics
This involved a government infusion of funds from the bottom up. By funding infrastructure like roads, bridges and schools; jobs would be created, credit would get rolling again and there would be something tangible to show for it in the end. FDR also implemented regulations for banking and protections for the savings and the welfare of the citizens. The states have these rebuilding plans ready to go and they could be implemented quickly.
Former Treasury Secretary Robert Rubin, who served under President Bill Clinton, told CNN that an infrastructure plan that could quickly pump money into the economy was the most important action that U.S. authorities could take to help deal with the current economic crisis.
"I would put in place an infrastructure piece... bridges, water systems roads, highways, but not new projects that are going to take a long time to set up," Rubin said. "There are a lot of existing projects where states and cities are having a hard time finding a lot of financing where you could funnel that money right into existing activities where you would be able to act very very quickly."
By David Lauder Sun Oct 12, 9:51 PM ET
WASHINGTON (Reuters)
