Strict regulation of Wall Street is essential to protect the integrity of the economy, but neither Wall Street regulation nor bailouts, are going to get people working. Wall Street is only interested in extracting society’s real wealth, not in contributing to its creation. Giving public handouts to Wall Street in the hope that some of it will flow into the creation of productive jobs is a sucker’s folly. On the other hand, government spending to put otherwise unemployed people to work producing beneficial goods and services makes great sense. It increases tax collection to reduce deficits, recapitalizes the local banking system from the bottom up to the extent that wages are deposited with local banks and credit unions, and need not be inflationary even though financed with government created credit or borrowed interest free directly from the Federal Reserve, because unlike Wall Street bailouts, properly spent stimulus money is simultaneously creating real value. David Korten ☀
Tuesday 11 May 2010
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