For what?Where is that $350 billion, that has seemed to just disappear?
The problem is, there are just too many layers. And each wants a cut.
Maybe congress should give the money to credit unions instead.
Since most credit unions are locally owned and operated - they tend to have a better idea about what is going on in the real economy.
What a city like Riverside, California needs is different than what a city like Scranton, Pennsylvania might need.
The big banks have proven their inability to determine the worth of their assets and liabilities.
How can a two year old 5,000 sq. ft. house be "worth" $0.00?
Since a credit union is usually based in the area it serves, a credit union could value an asset based on it's own local economy.
That same house might currently be "worth" $600,000 in Riverside but only $450,000 in Scranton.
But it would have a real value, or worth.
Since credit unions don't have to have a Super Bowl ad (an ad featuring "Jake" from the local body shop will do), they can spend your money on your community.
Since credit union board members live in the community in which they serve - it's easier to see whether "Joe" bought a boat that he shouldn't have.
Since credit unions use the same services as the national banks, there will be minimal job loses in the banking service sector.
Routing companies, printing companies and other industries who service the banks would still be required.
Since most of our money would be local - the Armani clad bespoke suit wearing snake oil salesmen in NYC would have to feel the same pain as their (former) customers.
Maybe it's time we cut out the middle men in NYC and started banking locally.
Maybe it's time to make another run on the banks in favor of credit unions.
Maybe Washington is trying to water a flower pot (well... really a lot of flower pots) with a fire hose instead of a pitcher.
In their rush to solve the economic crisis, maybe they need to reassess their belief that the cause... can solve the problem.
The 350 billion for the banks in the TARP program was not nearly enough. After all, we are talking about a 1 to 2 trillion dollar hole so, 350 billion was just a drop in the bucket.
ReplyDeleteOh, I know.
ReplyDeleteBut it just seems to me that the money was misdirected.
I agree with the Trickle Up theory more than the policcy that will probably be forced down our throats.
02 02 09
ReplyDeleteYou are right UBJ. Me and my husband have been using a credit union for over ten years now.
Amen! What I can't beleive is that the money was released with litte or no strings attached. Our Government simply threw money at people in the business of making money any way they can, and hoped it sticked!
ReplyDeleteIn addition to your proposals, there should be SPECIFIC end goals tied to this money and contracts signed stating so. These contracts should then be monitored for compliance by Government Contract Specialist--like any other.
It's an excellent and original concept, but the reason it would never get off the ground is in the name... Credit "Union". As you stated, credit unions are based in and on the community. They are sponsored by local school boards, factories, civic associations... basically organized poor folks.
ReplyDeleteIt's bad enough that the corporate cats are losing their precious deregulations, they are absolutely not going to allow what's left of their ill gotten gain to stay in the hands of those who earned it. Unions are the arch enemy of corporate greed. Credit Unions have remained small enough to not pose a threat thus far. This would make a great movement, but the attacks by the business and banking industries on the creidt unions would be brutal.
aint that some shit
ReplyDeleteYour right! Giving the money to Credit Unions is a great idea! They don't spend their money on Junket trips to Vegas or give out fat bonuses at the end of the year. Almost every dollar a credit union spends is on investments locally. They can better gauge how there local economy is doing and offer loans and incentives that benefit their bank and their community better and faster than a behemoth like Bank of America.
ReplyDeleteAlso America and the world has to realise it is experiencing a contraction and correction in the market not a recession. When you have real estate prices rising 10-15% a year on speculations, executives of large corporations making 20M a year and regular employees spending 7 dollars on exotic coffee from Starbucks, sooner or later your going to experience a correction in the market. Come on! The Chinese wrote about markets correcting themselves drastically 600 years ago. We still haven't learned our lesson!