Filling the Hole and Clearing Away the Junk

The Caretaker asked, "How do we fill the Bank Hole?" To which I respond, the same way we're filling the hole in the auto industry. With a tough form of justice, that requires a price to be paid by every stakeholder in the industry, beginning at the top and going all the way to the bottom. The auto industry is simply too big, too inefficient, and must be shrunk down to a more sustainable size. In a sense, there is no completely filling in the hole. You just let it sit there as a monument to our economic foolishness, and move on to a new era of our life together.

It's really no different in banking. The financial industry is WAY too big and Way too inefficient. Besides, it really has been the primary reason for the problems we're facing now, aided by the political prostitutes from both parties (ie. Senators and Representatives) in Washington. It needs to be shrunk, beginning at the top and going all the way down to the bottom. Fire the CEOs and the Board of Directors of the truly insolvent firms, tell their replacements to renegotiate all their contracts, perhaps put them through bankrupcty, and then let the smaller and healthier companies take over the business of lending.

To some extent, there is no recovering the money that's been lost in the great financial debacle. It's already been spent or looted. Everyone has already taken a big hit, in the value of their homes, the value of their 401(k)s and stocks, and continuing with lost jobs and lower wages, etc. The only ones not having taken as big a hit as they deserve are the big boys who steered us wrong to begin with and scammed us silly. They need to put on notice and certainly not feted at the White House, as if they're some kind of damn royalty. They--the Robert Rubins, Stanley Neals, Ken Lewises, Stan Greenbergs etc,--should never be allowed back in the industry (maybe because they're in federal penitenturies, along with Mr. Madoff). Will the recently fired CEO at GM ever head up a major auto firm? Unlikely.

The unappealing fact is that our economy is going to shrink by what, a third? We are so overleveraged as a nation, and our economy so revved up on fiscal caffeine, that it is now unwinding in a very natural, if painful way. That's the price we're paying for 30 years of blissful ignorance, and I don't see any way of really changing it. We've got to get down to business and doing the things that will produce true and sustainable wealth, not the faux, illusory wealth that finance produced for us, or we will become a poor, pathetic country.