oligarchy and the U.S. economic crisis
Oligarchic economic system and the U.S. government's preferential policies oligarchs, not only led to economic crisis last year, has spread to many other aspects, including over the mortgage, as well as much more than financial ability to bear too lax lending standards. But this decade's most important beneficiaries of the asset market bubbles, it is commercial and investment banks - and hedge funds with a par, they are relatively small on the basis of tangible assets acquired huge profits.
As everyone becomes more affluent, despite the health of the entire national economic system is heavily dependent on the housing industry and the rapid growth of the financial sector,concerned about the information, Washington sent the U.S. government did not have any doubts. Instead, Federal Reserve Chairman Alan Greenspan and the United States, President Bush stubbornly believe that the U.S. economy is essentially sound health, the tremendous growth of financial derivatives and rising credit be shared "reasonable distribution of risk" is being is evidence of healthy economic system.
In the summer of 2007, change as Dousheng. Sudden increase in debt, so even a small failure can cause major economic problems, which led to the sub-prime crisis. Since then, the U.S. financial sector and the federal government will be to expectations, to respond to this new crisis.
The U.S. government's most fundamental problem is uncertainty - uncertainty whether the major banks have enough assets to pay debt. Wait and see attitude of blind optimism is clearly unable to overcome this uncertainty, but do not want to offend the government financial institutions: when a major financial institution in trouble, the U.S. Treasury and Federal Reserve Board will provide assistance at the weekend and announced next Monday all under control.
In March 2008, Bear Stearns was sold to JP Morgan Chase, but in the eyes of most people, this is more like give away a gift instead of what a JP Morgan Chase acquisition, in September, we also see the sale of Merrill to the Bank of America, all of these acts are prompted by the government. Last year in October, the nine banks in Washington closed the same day re. The corresponding is a series of rescue plans for them.
The U.S. government has yet clear what the purpose of these actions, how to be effective. Treasury and the Fed did not follow the principles set forth in any public, but secretly developed a transaction, and then claim that this is the best choice at this stage - the typical black-box operation.
Throughout the crisis, the U.S. government to take extreme caution to avoid offending the financial institutions, not to challenge the existing basic system. In September 2008,concerned about the information, the current Treasury Secretary Henry Paulson has asked Congress ? spend 700 billion U.S. dollars to buy bank's bad assets, and no additional conditions, to their purchasing decisions are not subject to any judicial review. Many observers doubt that the aim is to over-purchase of these assets,concerned about the information, thus bringing the issue onto the government from the bank - in fact, this is the government purchase bad assets of banks the only role. Probably because of this outrageous subsidy program could not find any political basis, so the plan was shelved.
As the crisis deepened,concerned about the information, financial institutions need more assistance, the U.S. government acted more and more creative brains subsidies provided by Bank of complex items,concerned about the information, and even the general public simply can not understand. In late February this year, the third implementation of the United States rescue plan, the Government beyond a price higher than the market price of government-owned preference shares converted into ordinary shares, and these decisions are in no way inform a third party to resolve the crisis participants - - the taxpayers.
Government's soft wrist to trouble intensified reason is simple: this does not change the financial institutions have been accustomed to the old business model. Last fall, a senior banking official in the "New York Times" declared that: "do not bother what Paulson gives us, until the economy improves we will not lend a penny. "But the problem lies; if banks can not operate the health and began lending, the economy will not improve.
I dare go?
United States, the crisis in the financial sector is facing at least two serious problems: the first is the threat of banking Gaohuangshu patients any financial incentives or even stifle economic recovery can bring the seeds; the second is because with the marriage of politics, although loss of popular support, financial institutions still have a veto on public policy.
Large banks appear only in the beginning of the economic crisis began to affect the political will. As the financial system so fragile, a major bank failure could cause a loss far greater than usual. The banks will use this concern, the government desperately to extract oil. U.S. bank rescue plans in the fight for second when he warned the United States Government, if the Treasury does not consider their rescue, they may be unable to acquire Merrill Lynch.
Root of the problem is that banks are in the securities and loan portfolio credit risk losses. But they are unwilling to admit to avoid the resultant bankruptcy. So, they hide their own mistakes, cover up problems they can apply for assistance to recover enough to run only on their last legs. Operation that can not be healthy,, Bank of America, or refusal of loan (hoarding money to support the reserves), or gambling of high-risk high-return loans and investment. But in both cases, would further blow to the U.S. economy. Bank assets will continue to deteriorate, thus forming a vicious cycle of devastating.
Would like to break this vicious circle, if omitted the name of the country only show data, the IMF experts will soon make such measures: the nationalization of troubled banks,concerned about the information, if necessary, then drive him into bankruptcy. Government should force banks to recognize the true scale of their losses, the most direct way is to nationalization. Nationalization does not mean a permanent state. International Monetary Fund's recommendations are: to expand the business scope of the Federal Deposit Insurance Corporation. Federal Deposit Insurance Corporation's "intervention process" is managed by the Government bank insolvency proceedings. The Government has the power to remove bank shareholders need to replace bad managers, clean balance sheet, and then sold back to the private sector banks. The main advantage of this measure may be well aware of the problem and the problem resolved before its deterioration.
The process of cleaning up large banks is extremely complicated and costly. According to the IMF's latest data, clean up the U.S. banking system's long-term costs will reach almost 1.5 trillion U.S. dollars (total U.S. gross national product, 10%). However, only this decisive government action - to maximize the exposure to financial corruption, the return of public recognition of the health of bank assets - to aggregate to cure the current crisis in financial institutions.
This move seems drastic, in fact,concerned about the information, still not enough. The United States faced a second problem - the power of oligarchs - and now the credit crisis is equally important. International Monetary Fund's advice is equally simple: to break the oligopoly system.
Largest bank in the United States precisely because of the excessive power grab becomes round. Re-nationalization and privatization will not change this situation, replacement of bank managers in this time of crisis is necessary, but in the end is nothing but just for a new oligarchy. Ideally, the largest bank in accordance with the type of regional or split into small and medium business sold. This program looks rough,concerned about the information, but it is to limit the power of institutions in the personal best solution. Of course, this decentralized banking system may lead to "efficient low cost" of complaints, but the scale is too large compared to banks and then into self-destructive type of "weapons of mass financial destruction\The costs are not really "big."
In order to ensure systematic split bank, and to prevent the risk of financial Jubi recovery, the International Monetary Fund that the U.S. also need to significantly modify the anti-trust cases. Bill established 100 years ago to crack down on industrial monopoly, rather than the problems facing now. Financial institutions, the problem now is not because a company has a large enough market share and monopoly price,concerned about the information, but one or a small string of related businesses will be destroyed once the collapse of the economy.
People have been discussing the implementation of the salary ceiling for the financial industry could help restore the balance of political forces, and appear to contain the new oligarchy. Wall Street continued to create the largest ring is the wealth of stunned people. Restrictions can reduce the financial institutions pay the temptation, and thus make the financial sector return to normal temperature.
Of course, in the long run, direct payment of salary cap restrictions slightly simple. After all, most of the wealth is not controlled by large private hedge funds and private equity firms generated, therefore, lower wages will be extremely complex. Regulation and taxation should be a way. Over time,concerned about the information, the most important way to expand the transparency and increased competition, which will directly reduce the financial industry's operating costs.
America and the world may now also maintains the elite old view that the current recession "is not called to worse than the Great Depression." In fact, worse than during the Great Depression, because it is now closely connected to the world, the banking industry's position is also higher in almost all countries Du Mian Lin Zhao Xing Shi synchronized downturn in the economy, individuals and companies confidence Xiaoruo, Zheng Fu finance any major problems . If the United States Government recognizes the potential consequences, should the banking system and the oligarchy action. Hope not too late now.