Fools! The
problem is debt. More lending, more debt, won't improve anything. won't even stem the troubles. Whats the point of
giving away money to banks when
banks don't consume products, just shift money around? How does that help production and employment?
That money may be lent, all right. But
to whom? Unless banks are willing to lend at a loss to (not gonna happen!) it won't increase the income of real consumers. The profits to me made from any loans which do happen (and which will be made to people who can be expected to repay them anyway) will simply accumulate with the assets of the already wealthy. Who are not going to consume any more because of that, as they use their excess money for investment, or speculation, or ultimately further accumulation.
Governments are in full suicide mode.
It can't work, for two reasons.
One: should it really be tried (and it isn't yet, whatever the press may have said about the swedes) people would simply pull their money away from banks. That would be the end of capitalism, as capital effectively ceased to circulate.
Two: even if one didn't happen (extended "bank holiday"?) the money is still being
lent. It's not being
given away. As such the real incomes of consumers remain unchanged, as do their long-term ability to consume. Debts must eventually be repaid, we'd expect that bankers had learned that by now, after the events of the past year...
The difficulty isn't with the bank's willing to lend, or with the lack of money. It's with people's ability to take loans!
This is a crisis caused by income distribution problems, and outdated views towards labour. Labour is viewed only as a cost to be reduced, and governments have been blind to the fact that it is a fundamental part of the economic cycle, and that "reducing costs" there, as a
systematic practice, compromises the whole structure of the economy. The whole mess started when management views changed from seeing a company's main goal as that of making a product to seeing the main goal as that of making profits.
Making profits is a necessity, a constraint, not a goal.
The end result, inevitably, was banks selling
contracts as "financial
products"... calling financial contracts a
product, and trading on it, is an offense to the real productive economy.
/weekly rant
