Burn it Like Beckham

My thoughts range from jello salad to lawns in need of care and perhaps, I have lost my mind. I realized today that the global economy is similar to a home in foreclosure with a seriously shitty yard. You have seen those, right? The yards so full of weeds and crap that the best options are to set fire to the whole thing or tear it up; that is our economy. The scary thing is that it isn't just our economy anymore, it belongs to everyone across the globe.

I always found debt fascinating as a student of economics and as a mortgage originator. Debt can do wonders for people, corporations, and as Ross Johnson once said, the sphincter.  I have no intrinsic problem with debt, if you have read this blog then you know that I have at times encouraged people to acquire debt to degrees formerly considered stupid.  But, what scares me now is how many countries are in debt and printing money.  It is all fine and good when we you just have Hitler or Bernanke printing money in solitude, at different points in history....but when all the major players are printing money at the same time with no economic backing, we should be very afraid for the future.  There is no economic growth to base money supply expansion on and this should scare the crap out of people.  For those of you who hate economics, let me make it very simple.  Inflation is inevitable.  It has to be.

In a break with tradition, I have a solution or two.   Here they are, in no particular order of importance:

1.  Burn the whole fucking disaster down.  Get rid of the Fed, Federal regulatory agencies, the FDIC, Fannie Mae, Freddie Mac, and anyone else who has an incentive to make the government bigger and hose the taxpayer.

2.  Replace government regulators with private sector regulators and MAKE THEM BID FOR CONTRACTS ANNUALLY, and maybe make private firms decide who gets the contracts.  As an example, in the oil business you would have smaller companies regulate the larger ones.  Recognizing that this is a collusive industry, you would want to bring in new potential competitors to regulate the long standing firms.  It cannot be BP regulating Exxon.  That would be like fraternity boys policing themselves in a date rape, not cool.

2a.  For all the hits capitalism is taking, it is the best system for improving human welfare, if you don't think so than I have to infer you have not read much about history and I am sad for you.  We need to quit confusing capitalism with cronyism and we need to recognize what it needs to work better.  We need to look at our legal system and government institutions that ruin what is a competitive environment that actually helps consumers.   

2b.  In the banking industry, I could see this as a way to save small banks.  Let smaller banks audit the big banks and serve as an enforcement mechanism for regulations in place.  Give the private banks an incentive not to take bribes or get ahead other than the fact that they could grow and prosper, unlike government regulators, who have no incentive to do right.  The truth is that more regulations solve nothing unless they are enforced and no one is enforcing them.  The banking and financial industry is very much like OPEC, a very close knit oligopoly that can allow oil to go from $14 to $56 a barrel quicker than you could get Jessica Simpson to say something stupid.  This is not capitalism or competitive economics.  Do not be confused.  This is consolidation of economic power that results in a strange form of economic totalitarianism.   

I am just beginning to mull this around.  I want to avoid the inherent problems in government regulations and the crazy game theory dilemmas that these arrangements create.  I want a system where potential competitors police behavior because it reduces barriers to entry and levels the playing field for everyone and at the end of the day, that is good for the consumer. 

If the effing Beckhams can float freely between continents without anyone regulating the transmission of stupidity, surely, we can figure out how to regulate behavior without the government?  Right?

Your thoughts are welcome....unless, you think Congress can fix it.  If that is your suggestion, then please feel free to hang out with Posh Spice in another delusional land.  I am setting fire to this one.