tag:blogger.com,1999:blog-19217611.post3288809580975454935..comments2024-03-28T09:13:04.373-04:00Comments on KIKO'S HOUSE: The Price of O.J. & Financial DysfunctionShaun Mullenhttp://www.blogger.com/profile/14964214385216513188noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-19217611.post-41559129878384917562007-08-18T11:30:00.000-04:002007-08-18T11:30:00.000-04:00The fed drops its discount rate by a half per cent...The fed drops its discount rate by a half per cent.<BR/>This means that they have offered a lower than would be normal borrowing rate to financial institutions.<BR/>This means they are subsidizing the banks' excessive risk taking consequences, now run amok, in the mortgage markets.<BR/>Any modestly experienced economist knows that financial institutions go on risky sprees every few years. While these sprees are underway, financial types take a percentage of every transaction. They make the loan; "take a cut." They package the loans; "take a cut." They repackage and repackage the loans. they sell off differentiated pieces, called 'tranches'; losses occur, they repackage the loans and at every turn the bankers slice off a little profit for themselves.<BR/>The final result is that the individual bankers have put much dinero in their pockets. The capital position of the banks has hemorrhaged. The Government uses tax money to assist the wounded financial schemers. And John and Jane Doe will have to pay.<BR/>When the Does seek a new car loan or other financial resource; the interest will be higher until the capital wreckage caused by the "Known-in-advance" excessive risk behavior of the banks is steadied.<BR/><BR/>The little guy when in trouble is denied universal health coverage. The Jane Does can't have their interest rate burden lessened or enter bankruptcy without being hammered by the banks. But the financial industry is left to habitually go off on risky tangents, pocket billions, and ask the tax paying public to finance the rescue.<BR/>There is an equitable remedy.<BR/><BR/><B>Them and Us: A Capital Tax Plan</B><BR/>.<BR/>(Wall Street firms are expected to pay out a record $23.9 billion in bonuses this year. 12/20/06 USA Today)<BR/><BR/>Place a one one hundreth of one percent Value Added Tax on all capital flows.<BR/>'Them' enrich themselves by taking a bite out of America's capital flows at every instance while 'Us', the creator's of this wealth, need Moms and Dads working multiple jobs to eat and provide the capital for this system.<BR/>As our capital washes around the globe for economic enterprises, both good and bad, and hedging and currency (and other asset) speculation, there is no reason Us couldn't charge a way tiny `rent' for this resource.<BR/>Social Security and Medicaid could thus be amply funded and capitalism would manifestly not miss a heart beat.<BR/>--cognitorex--cognitorexhttps://www.blogger.com/profile/05092226654355873888noreply@blogger.com