Adults (18-64)

Tuesday, December 9, 2008


Why are the “brains” of this world constantly redefining the problem? We know what the problem is, why don’t we come up with concrete proposals.

The problem is the banks, which were given in excess of $100 billion in Taxpayers money but are still not willing or able to help. $100 billion in Cash assets theoretically creates $1 trillion in credit, assuming a 10 to 1 leverage ratio; they were leveraged at 30 to 1!

Why are they not lending? Are their assets worth less than we thought and the money given them not sufficient to balance their books? Are they using that money to de-leverage? Or are they spending it on the wrong things? They are still paying out dividends and handing out bonuses!

On the other hand they are collecting up to 22% interest on credit card debt and over 7% on mortgages when the cost of money is less than 1%!

Whatever the problem, these traditional and apparently “failed” banks are not functioning and perhaps require a little encouragement by providing them with some competition.

The government should form 10 or more state banks with $100 billion or more of taxpayer’s money and make the Taxpayer stockholders of these banks, not the government, by issuing stock certificates in these new banks to each taxpayer.

The $100 billion or more would create credit facilities of roughly $1 trillion or more at a leverage ratio of 10 to 1 and would immediately unfreeze the credit markets.

These banks could lend to the auto industry amongst other things and take that monkey of the government’s back.

The taxpayer should receive a stock certificate in each of these banks. The banks would be run by reputable individuals including retirees; this would create employment.

The banks survival would be guaranteed by the government for a determined amount of time, say three years.

After a certain amount of time, say five years, these banks would be returned to the market through an IPO and capitalism would be restored and the taxpayers holding the stock certificates would get their money back and most probably make a decent profit.

This proposal has the following advantages and does the following things;

1)- Create new and competitive financial institutions that are not too big to fail and continue the mantra of creative destruction.
2)- Immediately unfreeze the credit markets and provide $1 Trillion or more in credit facilities and perhaps help the American automakers.
3)- Provide banking jobs to thousands of people.
4)- Maintain the capitalist system by providing the taxpayers with stock certificates and thus create oversight by taxpayers and not government.
5)- Ensure a return to the taxpayer by spinning these banks back to the open market through an IPO.

I realize this proposal is controversial and out of the box, but I firmly believe it is feasible and would be more effective than the current solutions of pouring good money after bad.

Alternatively Lets start our own PEOPLES' BANK

Thank you for providing this platform and look forward to your comments and or your support.

Bou van kuyk, Dallas, TX

Tuesday, December 2, 2008


Why do we keep bashing Detroit based on a number of myths?

Ford and GM are still two of the world’s largest and most successful automakers. They make and sell cars all over the world not just in the USA!

They do make good and reliable cars and have beaten foreign makes in quality and durability.

They do make Hybrids, the Ford Escape has been around before the Toyota Prius and more of the big three are launching new hybrids like the 60 MPG Ford F150.

They do not only make gas guzzlers, I drove a Ford Fiesta in Europe that did 65 miles to the gallon and there are US models like the Focus that are well above the average in miles per gallon.

They do make cars that Americans want. Unfortunately the American market wants large gas guzzlers like the SUV's. Every automaker in the world has been trying to bring successful SUV's to the American Market.

The government is blaming the big three for making cars that the market wants! This is what a capitalistic corporation is supposed to do; sell cars that people want and make a profit doing it!
It is true that the cost per automobile is too high, I am not sure though that the cost comparisons to foreign car makers is not an exercise in comparing apples and oranges.

Social costs of foreign labor are measured differently. Most foreign manufacturers have a government taking care of health care costs and pensions which are paid for by the taxpayer. The big three are all carrying the full burden of these costs (health care and pensions) that in most other countries are carried by the government.

The current problem of the big three is exacerbated by the current financial crisis. Credit is tight, it is hard for them to rollover/renew their credit lines and their ability to raise new capital has been greatly diminished by the precipitous decline in their share price.

The problems of the Detroit three is not a lack good, quality or fuel efficient cars that the people want, it is their burden of taking good care of their current and past employees and the current economic crisis; the government should help them.