Thomas Schinkel and Associates

America’s New Deal with Capitalism Part II

By

Thomas Schinkel

February, 2009

In Part One of my article entitled “2009 America’s New Deal with Capitalism,” I concluded that the economic crisis that has enveloped us all had a scope in the range of $9 trillion, that this was a lot of money and that it was accompanied by an even more severe crisis, and that was a crisis of trust.

Trust in this context means implied trust among various groups in society such as the middle class, the financial services community and the governing class. Each of these groups has a stake in our present system of capitalism, and without credible efforts to restore this trust, nothing will work to save this system of capitalism from collapse.

In this second part of the series, I will first outline an alternate set of action steps that I believe are necessary to arrive at a solution. Then I will outline the benefits of such a new way of thinking.

Preamble
Instead of focusing all its energies on preserving the top- tier of the financial services architecture, what the Federal Government needs to do instead is focus on preserving the economic integrity of the American  middle class!
Without the top tier of banking institutions the world will function anyway. Competition within the banking community is sufficient for the remaining, more mundane, bankers to pick up the slack in the event that the top ten banks disappear altogether. (Click here to read the rest of this entry)

Fallout from the Bailout

By

Thomas Schinkel

October 5, 2008

Rescue or Bailout? Wall Street or Main Street?

Have you noticed? Less than three days after the deal was done, it is already politically incorrect to call it a bailout plan. The correct wording now is ‘Rescue Plan’, and it is not Wall Street that is being rescued; no, it is Main Street that is being bailed out. What a difference a week makes!

Leaving that one for what it is seems to be, at least for now, here are twelve talking points for the “ME” generation, exploring what can be expected in the aftermath of “Project Main Street’s” approval by Congress last Friday. Keep in mind that as of today it is entirely unsure whether the bailout is actually the correct cure for the problem, as defined.

1. Rising Unemployment

Expect unemployment to rise above 7%. And it will take a long time to get this number down to where it was before 2008. Also expect underemployment to rise. More and more people will look for part time jobs, time share jobs, two part time jobs and any other arrangement to bring in cash.

2. Reduced Consumer Spending

Consumers have been spending well beyond their means for years on end. Low interest rates and the resulting housing bubble merely aggravated what should have come to a halt as far back as 2000/2001. Expect a wave of austerity throughout all levels of the economy.

(Click here to read the rest of this entry)