It's the Economy Stu... Percolate up

Friday's news included Wells Fargo bank offering to take over Wachovia bank. This offer was 'sweeter' than the previous Citi Bank offer. This is what happens when the government (that is We, the people), step in and promise to pay for all bad debt. I see this takeover offer as the first in a long line of mergers in which the profits go to the executives and share holders of the banks and the debt goes to the tax payer, me.

There is no apparent down side to taking on another bank's bad debt. H.R. 1424 puts the full faith and credit of the United States of America behind absolving the debt. A bank can assume, and then write off, the poorly performing loans keeping the profitable ones for themselves. As part owners in these banks We the people have some stake in those profits, but the 'bad' debt will most likely siphon off any gains. And on top of these undesirable conditions We the people will need to foreclose on the bad loans in order to obtain our best return on our investment. We the people will be forced to throw our neighbors out of their homes so we can gain at least some return. And the beneficiary of the sale of the foreclosed houses will be the 'rich' people who have the money to invest in real estate. This is a foundation of "Trickle Down" economics.

Advocate "Percolate Up" economics. Put the money in the hands of those who need it, by forgiving mortgagee obligations and let that additional cash, flow into the private sector in the form of new purchases of real and durable goods. The resulting surge of purchases will jump start the global economy. The money will quickly get from the bottom and percolate up to the wealthy. The purchasing power of the American consumer will swell the treasury when additional tax revenue from income and sales begins to flow, by this December.

Someone can always point out deficiencies in a theory. But we have tried 'Do nothing' and 'Trickle down'. Let's try 'Percolate up'. Give this theory a chance for 20 or so years and if it isn't working out we can adjust, just as we need to to day. But Albert Einstein said to do the same thing over and expect different results is a definition of insanity. I, We the people, are not insane.

Percolate up!