...the high cost of borrowing and of servicing existing debts is crippling companies and forcing them into bankruptcy and layoffs. It is these high borrowing costs that are causing home foreclosures to balloon upwards. Each day inflicts more damage - on the economy, on society, on families and on individuals. And each day the stock market shows its lack of patience with an administration prevaricating over the economy.

The Fed is the slouch here -- dragging its feet. Fed Governor Bernanke needs to urgently get all borrowing costs down -- for companies as well as households; for risky as well as safe loans. At this stage of the economic cycle, very few loans are without risk. And if businesses and entrepreneurs are to take the risks needed to pull us out of this crisis, they need affordable finance. The Fed can get rates down by applying the policy of quantitative easing far more aggressively.

And then there are the banks. Collapsing banks can't wait while Treasury embarks on a painstaking and punctilious "stress test." The stock market knows what Treasury still needs to admit: the banks are bust. Their CEOs lack all credibility. Until they are nationalized the Dow will continue its very rational path downwards....

The economy cannot wait for the president's patient building of bipartisan agreement. Those congressmen and women that cannot grasp the gravity of this crisis need to be sidelined. Millions of unemployed Americans can't wait while Ben Bernanke, Tim Geithner and Larry Summers learn from the mistakes made by Japan in the 1990s. Millions of homeowners can't wait till economists unlearn the dogmatic and misguided theories of Ayn Rand, Milton Friedman and Paul A. Samuelson.

posted by speakingcorpse : 3/02/2009 12:02:00 AM