The only plan that has made any sense so far

Ruth and I were talking this morning about how all that's on the news is the bailout, but no one is explaining anything that makes sense.

Ruth has a giant math brain, easily able to understand complex problems and solutions. I have a superhero talent for deciphering bureaucracy speak. And neither of us can figure out what the fuck is really going on. And that is what really scares me. You don't know how many half written blog posts are sitting in the que because I just can't figure out what the fuck they are trying to do (other than fuck over the entire American populace, but that ones obvious)

Then along comes James Galbraith with the only fucking plan that makes actual sense to me.

Is this bailout still necessary?

The point of the bailout is to buy assets that are illiquid but not worthless. But regular banks hold assets like that all the time. They're called "loans."

With banks, runs occur only when depositors panic, because they fear the loan book is bad. Deposit insurance takes care of that. So why not eliminate the pointless $100,000 cap on federal deposit insurance and go take inventory? If a bank is solvent, money market funds would flow in, eliminating the need to insure those separately. If it isn't, the FDIC has the bridge bank facility to take care of that.

Next, put half a trillion dollars into the Federal Deposit Insurance Corp. fund -- a cosmetic gesture -- and as much money into that agency and the FBI as is needed for examiners, auditors and investigators. Keep $200 billion or more in reserve, so the Treasury can recapitalize banks by buying preferred shares if necessary -- as Warren Buffett did this week with Goldman Sachs. Review the situation in three months, when Congress comes back. Hedge funds should be left on their own. You can't save everyone, and those investors aren't poor.
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With this solution, the systemic financial threat should go away. Does that mean the economy would quickly recover? No. Sadly, it does not. Two vast economic problems will confront the next president immediately. First, the underlying housing crisis: There are too many houses out there, too many vacant or unsold, too many homeowners underwater. Credit will not start to flow, as some suggest, simply because the crisis is contained. There have to be borrowers, and there has to be collateral. There won't be enough.

I trust Galbraith. I trust his ideas and his family history of pulling this country through devastating economic downturns. His father, John Kenneth, was FDR's architect for the New Deal and James has continued on with progressive ideas for how to help the economy (and the majority of us regular people that make up the economy).

Go read the rest of his article. And then have a stiff drink as you realize that neither political party has plans to do anything like this to fix our upside down system.

Or you can go for wishful thinking with Blue Lyon. I could certainly use the We Deserve It Dividend. Kid and I could have a home with that.

H/T to Anglachel