A simple metaphor for the current financial crisis. Your comments and elaborations are welcome.

[AdHocSolver]

The economy is like a ship that has a hull breach and is taking on water and sinking. The ship's captain and officers were drunk with greed and caused the problem.

Finding themselves in trouble, they decide to abandon ship. However, they took on more passengers than they have lifeboat seats, so they have decided to leave some of the passengers behind.

To prevent the passengers from panicking, they tell them that there is no serious problem, this boat is designed not to sink. The captain and ships officers are going to take the lifeboats to get help to repair the ship. They just need the passengers to help the captain launch some of the lifeboats, and everything will be okay.

We, the passengers, are being asked to bail out the crooks who ruptured the ship's "hull", no more and no less. The bailout will not prevent the ship from sinking. It will merely forestall it until the crooks can make their escape.

There are two actions that have to be taken to correct this problem and allow the U.S. economy to recover. Note that neither action will prevent a difficult adjustment in the economy in the short term. It is like serious surgery that will help the patient in the long run.

First, the government must reinstitute a strong regulatory system for the corporations. Deregulation is like making theft legal. Regulatory agencies must be revitalized and staffed with competent, ethical personnel. Stiff penalties for noncompliance must be established and enforced. The tax code must be revised so that the scams pulled are no longer profitable. The Federal Reserve has to be removed from corporate control. The current Fed is equivalent to the fox guarding the hen house.

Second, steps must be taken to bring jobs back to America. The U.S. trade deficit is destroying the American economy. As our debt to foreigners increases, the value of the dollar is decreasing, and this is one of the causes of the increasing prices and overall inflation that we are experiencing.

One step that is needed is to rewrite or rescind NAFTA, the WTO, the IMF, the World Bank, and every other corporate cartel agreement that is designed to limit competition. These are NOT "free trade" agreements. There is currently no international "free trade". It is all corporate controlled.

Another step is to impose import restrictions and duties to enable companies that want to manufacture goods in America to compete with foreign companies who use cheap labor and ignore environmental issues. Using cheap foreign labor does not save you money. The importers do not pass their savings along to you. They just pocket the savings to increase their profits. Moreover, the debt caused by the trade deficit is devaluing the dollar and causing higher prices through inflation on all goods.

A third step is to change the tax code to reward companies who create jobs in the U.S., rather than the current situation, where companies are rewarded for sending jobs to foreign countries.

If you read and understand this post, you have all the information you need to understand the current economic situation and what needs to be done to help us weather the coming storm AND PREVENT A RECURRENCE.

"Deregulation", "bailouts", "free trade" are all part of the scam that brought this economic hurricane to our shores. In the 1930's, it took a Great Depression to get the people and the government to enact the laws and set up the institutions to prevent economic meltdown. If we act now, we can avert the worst of the coming storm.

Just increasing taxes on the "rich" alone won't solve our problems if the financial and corporate infrastructure that enabled the fraud and the thievery is allowed to still exist.

[Swamp Rat]

1. Drop anchors onto the longboats and sink them.

:)