IN THE USA "LIBERALS" COLLUDE WITH THE ESTABLISHMENT

MY WALL STREET, RIGHT OR WRONG, SAYS FAMOUS SELF DECLARED LIBERAL!


Paul Krugman, the self declared "Conscience of a Liberal" writes the following in a New York Times editorial (September 26, 2008):

"Maybe we can let Wall Street implode and Main Street would escape largely unscathed. But that’s not a chance we want to take."

Really? Why not? All indicates that it's the other way around. Keeping on sending money to Wall Street may keep on depriving Main Street of money. Sending money to Wall Street is exactly what has happened in the last few decades. Maybe it's time to try something different.

The total worth of the world is about 100 trillion dollars, and the total world GDP is not even half that. Nevertheless, the supposed "value" of all derivatives invented by "Wall Street" is in excess of 500 trillion dollars. Many of these derivatives are leveraged out of mortgage based securities.

In other words, "Main Street's" money (found in banks) was lent to hedge funds owned by extremely rich individuals, so they could leverage themselves to make themselves even more fabulously rich. Now that this leverage is working the other way, two things are occurring: the banks can't be reimbursed, and the hedge fund industry (worth two trillions dollars in the USA) is in danger of being wiped out (bringing many of the hyper rich to ruin). This is probably what is the real reason for the panic of the Bush administration.

The simple solution to all this, for the People at large, "Main Street", the real economy, is to nationalize all institutions that are necessary for the ongoing functioning of the economy (in the Great Depression, the Fed let thousands of banks necessary to the functioning of the economy close, a horrible mistake). In other words, let the government provide necessary banks with all the capital needed for operations necessary for the ongoing functioning of the economy . Simple. and don't send the money to the rich: that could cause a new Great Depression.

Hedge Funds and obscure, unregulated derivatives are unnecessary to "Main Street", and have actually hindered "Main Street" by siphoning money away from it. Let them die. It's time to do triage.

Nationalizing (hence saving) only functions and institutions useful to "Main Street" will save the economy. All "Wall Street" has been doing is destroying the real economy. Time for a change.

Patrice Ayme.
— Patrice Ayme, Hautes Alpes

http://patriceayme.wordpress.com/


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