the Treasury would take shares in some companies

Who spends hastily repent at leisure. Frightened at the thought of reliving a great depression of the 1930s-style, us politicians have developed, almost from one day to the next day, a rescue plan of $ 700 billion to revive the national financial sector in full decline. The basis of this project, there is the idea that the ingenuity of the Government will succeed where Wall Street experts have completely failed. On top of all, had said us that the Government is so clever that it might even earn money in this history. Perhaps, but let us not forget that much of big heads of the finance industry thought the same thing until very recently...

A year ago, the United States had five independent investment banks that dominated its powerful financial sector. Collectively, their employees have shared more than 36 billion dollars in bonuses last year, thanks to the huge profits "earned" by these institutions their risky and aggressive business strategies. Mid-August, I had the audacity to predict that risks had come and that a large US investment bank might soon go bankrupt or be forced to merge in poor conditions. I was far from imagine that today ' today there would be no independent investment bank on Wall Street.

After years of attracting the brightest in the world and extremely lucrative jobs, investment in crisis banks are developing them outside. This brings back us to the project of the US Treasury to spend hundreds of billions of dollars to unlock the "sub-prime" market The concept is that the US Government would serve as buyer of last resort for dubious claims that the private sector has not been able to assess. Who, exactly, Treasury would use to solve this But, see, the same employees of investment banks now reduced to unemployment! Ponder this. Investment banks were losing their job because they have been unable to find a convincing way to evaluate distressed mortgage debt. Now, working for the taxpayer, these same bankers will suddenly find the magic pricing formula that has eluded them so far.

It's not surprising that scholars from across the political spectrum have expressed serious doubts. Of course, the Treasury would take shares in some companies, so there would potentially benefit. But the main concern the apparent intention of the Treasury to pay more than double the current price (20-30 cents on the dollar) market on the pretext that its success in Untangling the mortgage market would appear to be any reduction as a boon. But can we afford to be as fussy when it comes to recognize the urgency of fixing the financial system Any plan is better than none isn't at all Well I did in not I. Efficient financial systems are supposed to promote the growth of the real economy, not to impose a huge tax burden. And the US financial sector, greasing the wheels of the real economy has absorbed 30 of corporate profits and 10 of wages. Thus, unlike what occurred in the 1930s, the United States found a hypertrophied financial system. Is it not possible that instead of causing a great depression a significant reduction in the financial sector, particularly if it is facilitated by an improved regulatory structure, does improve the effectiveness and growth

I am not suggesting that the Government remains idle. It needs to provide a form of insurance of deposits during this time of turmoil, that the bank runs in the style of Northern Rock do not reproduce. This is the big lesson of the 1930. The Government may also will need to inject funds more directly in the mortgage sector while the private sector reconstitutes itself. There is no doubt that he will also be better ways to help owners and their lenders to find effective bankruptcy procedures. Banks seize homes has no meaning when there are solutions that would enable people to stay home and banks recover far more money.