On Mar 24, 2009, at 10:06 AM, Jordan Hayes wrote:
>
> I'll try to type more slowly. The "Swedish Solution" is not being
> considered in this case by anyone other than bloggers, *because it
> will not work*. You say that it's not being considered "because of
> power" -- to which I "call BS" and invite you to prove it, by
> showing how, if only they'd disregard "power" they could in fact
> make it work. It's a simple proposition.
>
Since neither Jordan nor anyone else understands by "Swedish Solution"
the nonsensical idea that the US should simply adopt 1990's
legislation translated from the Swedish, we must recognize what
"Swedish Solution" means. I think it means--as understood by just
about everyone--that insolvent banks should be taken over by the
government; the unsecured creditors given only what they would get in
a bankruptcy liquidation (*their* *innocent* creditors [like pension
funds and municipal governments, but not hedge funds etc.] being held
harmless by the government); the stockholders wiped out; and the core
institution returned to private operation as a normal (pre-repeal-of-
Glass-Steagall) commercial bank.
Since Jordan seems to think that this "will not work" and is advocated only by sneer-worthy "bloggers," I call his attention to this morning's statement by the editorial board of the New York Times:
"In other banking crises, both in this country and abroad, resolution of a systemwide problem has sooner or later involved separating solvent banks from insolvent banks. In the end, there is no getting around firing the executives at failing banks, acknowledging the losses, wiping out the shareholders and then deciding how the government can best restructure the institutions. The Obama administration has yet to explain why its approach is better than that."
Since Jordan is so certain that this "Swedish" approach "will not work," it should be very easy for him to do what the Obama administration is so plainly unable to do: EXPLAIN WHY ITS APPROACH IS BETTER.
>
Shane Mage
> This cosmos did none of gods or men make, but it
> always was and is and shall be: an everlasting fire,
> kindling in measures and going out in measures."
>
> Herakleitos of Ephesos