Fixing the Banks

As bank stocks continue to plummet, bank executives scramble to loot the assets of their institutions while working the politicians for yet more bailout money with which to pad their bonus packages before the whole system collapses.

They are already into the American public to the tune of $4,000 for each man, woman and child. It is long past time to bring this insane game of squeezing the blood out of the common folk to a halt.

Here, in broad outline, is what I propose we do about it--if, that is, we can find any politicians with enough courage to take on the psychopaths in the boardrooms:

First--get an accurate accounting of the true value of the assets and liabilities of the large banks. This will require outside auditors, preferably government auditors. If private contract accountants are used, they should be assigned to tasks in such a way as to preclude their co-optation by the entities being audited. For example, accountants from different firms should be teamed together and nobody should be assigned to audit a bank with which they had a prior professional relationship.

Second--nationalize these banks. Using the data from the audits, determine the true present market value of each bank. Shareholders will be reimbursed by the Federal Government for the actual value of their shares.

Third--restructure the banking system as needed for efficiency. The restructuring may remain as an ongoing process so that the banking system can evolve as needed for changing economic circumstances in the future.

Fourth--disassemble the Federal Reserve and reassign its functions to the nationalized banking system.

And fifth--As evidence of prior criminal activity is turned up in the audit and accounting process, prosecutions of the bank executives will proceed. The IRS will be assigned to track down hidden assets. Given the worldwide scope of the financial crisis, the US will seek treaties with other nations that will permit the opening of bank records around the world to investigators for purposes of locating and repatriating the fruits of fraudulent activity.

Small privately owned banks will be permitted to operate, but strict rules will be reinstituted to define their bounds of operation, and they shall in no case be permitted to operate in more than one state.