Up here, on the already too high edge of "the fiscal cliff", forget jumping, but do we climb up or down?
Sir I refer to your “A fiscal cliff fall will cost us dear” December 15.
“The fiscal cliff” is the name used to describe the possibility of big tax increases and important spending cuts that would send the economy in a downward tailspin which we do not know where it would stop.
The alternative, which has no name, but I guess to remain “sitting on the edge” would do, though when adjusted for the fact that the edge is position higher and higher each day, “sitting on the ever higher edge” would seem to be more appropriate, does also seem like a quite scary proposition.
My problem is that no one discusses the reason why we find ourselves up here in the first place, and which is because of how the natural market driven Ying-Yang relation between what is perceived as safe and what is perceived as risky, was distorted by utterly intrusive bank regulations.
Nervous desk-bound nannies created too big incentives (meaning too low capital requirements) for the banks to lend to "The Infallible", as if banks needed that, and to avoid "The Risky" (meaning higher capital requirements), as if banks were not doing that anyhow. And, as a natural result, they doomed our banks to dangerously overpopulate the safe-havens, and for the real economy equally dangerously, to under-explore the more risky but certainly more productive bays. And as a result banks do not finance the future, they only refinance the past.
And I know that safely climbing, up or down from where we find ourselves, already much too high, will require some serious risk-taking.
And so the first action required before climbing, up or down, because of course we should climb and not stupidly jump, must be to free ourselves from the dead-weights of the risk-weights which were imposed by the most useless dangerous and stupid bank regulations ever.
Two concrete proposals on how to climb better, up or down:
And America, before deciding whether to climb up or down the fiscal cliff, go to a church and pray, “God, in the Home of the Brave, make us daring!"
PS. By the way I cannot understand why someone who declares a motto “without favour”, with respect to tax-cut proposals, can hold that it is up to the Republican speaker of the House and not to the President “to make the first move”.
PS. Republicans and Democrats here is a bi-partisan proposal that could be acceptable to both of your extremes.
PS. But, in truth, in too many ways, we are already way over the cliff!
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