George Soros on Bailing out Banks

This article in the FT on Jan 22 points out the cornerstones that define the essence of corporate power: equity and money as control. The question is who is in control: of issuing money, toxic assets, good and bad banks.

The former US Treasury secretary Hank Paulson’s proposal was supposedly similar to the current one, which boils down to the Fed ‘guaranteeing’ those toxic assets via a ‘toxic aggregator bank’.

Instead,  George Soros is proposing

• an equity injection scheme
• a cut in minimum capital requirements for banks.

It doesn’t remove the Fed’s power, but it seems, as if at least wouldn’t widen it.

Another article by George Soros on his site is The Crisis & What do to Do About it doesn’t go to the heart of central banks, but at least questions the current paradimg of ‘markets tending toward equilibrium’.

Debt, Credit and Equity

These are ominous words behind which to hide stark realities, above all, of control. Debt and Credit are controlled by banks, equity is controlled by shareholders. Together, they form “institutions” that live longer than their people. They have mission statements, while we, the taxpayers, may be looking for a purpose in our lives.

Money used to be a medium of exchange to facilitate trade. Since it’s virtually only credit by now, it has become a means to control, mainly ownership: access to land, property and other natural resources, rights to ideas and “intellectual property”.

Wealth for all? Millennium Goals? Freedom? Democracy? Stewardship for planet Earth?

It’s a great challenge not to participate in that schizophrenia that we’re are presented with. Still, we live in “interesting” times!

Overlooked solution to credit crunch

This article appeared in The Australian – Online Newspaper of the Year as a remarkable comparison of household and corporate debts.