Pain, Not so Exquisite Pain

So I have a big mouth, some have observed, and I am complaining all the time. I’ve been told I better start talking solutions to America ’s current economic crisis, so here goes, short, down and dirty:

1. Put a moratorium on foreclosures.

2. Get the government to take over the mortgages contained in the derivative market (pay a flat rate to the institutions based either on a formula or a set fraction like 60% of face value), lower the rates for those homeowners who can pay and stop the flood of foreclosures - foreclosures are driving down the net worth of real estate and this country. Give the originating banks a quarter of one percent to administer, but require them to.

3. Make sure that those who caused the problem don't get golden parachutes or high compensation. Sue or prosecute those who have already. Don't bail out those who lied on their income statements or knowingly supplied incorrect statistics.

4. Give the taxpayers equity and/or upside in everything they support.

5. While imposing severe restrictions on how much equity or cash one (person or company) needs to have versus how much they can borrow, supply liquidity to the marketplace so that homes can still be bought and sold and lend properly to fuel viable business growth. Deal flow in the housing and corporate growth market will restore some stability and create a price for residential real estate – no loans = no sales = further depreciating values. Define debt widely and equity narrowly. Fixing the debt-to-equity ratios is mission critical.

6. Focus on job creation.

7. Create bi-partisan oversight over all major bailout packages. Do not vest that authority in one man without oversight or accountability.

Not acting risks the collapse of the stock market (lots of pensions are built here), the massive failure of many more banks and financial institutions, the further drastic collapse of home values, vastly higher unemployment (and lots of hidden under-employment) and the collapse of the dollar (everything we import, from oil to steel, will explode in price).

If I can do it, so can Washington . Life is suffering. Buddha.

Next!

I’m Peter Dekom, and I approve this message.