In The Meantime

despite the inauguration, life goes on. From the always dependable Jerome.

The current banking system is terminally bankrupt. Banks today will not lend, even to sound businesses, even if you give them the money to do so. So you have to compel them to lend. Banks (or more precisely, their shareholders, management and creditors) should not be saved: they should be repsectively wiped out, fired and  made to take their losses. The banking infrastructure (including most employees, which  had little or no responsibility in the crisis) can be diverted from its prior uses towards those now determined by government as part of the mopping up exercise of the hole that the very banking system created.

Financiers are part of the problem, not part of the solution, right now. Don't save them. But save the boring, utility bits of banks. Banks will not do that on their own. Government has to force them. Urgently.