SUNDAY NEWS

In “Lifelines for a monster”, Associate Editor Gil Smart asserts:

“Last week came news that the Federal Reserve and five other central banks decided to lower the interest rate on dollar liquidity swaps.

“I bet that phrase makes your eyes cross. Mine too. Basically, the idea is to ensure there are lots ‘o dollars available to banks in Europe (and, to a lesser extent, elsewhere) so those banks can keep making loans. This prevents a “liquidity squeeze” — as in, the type of thing you experience when the money in the checking account runs out on Tuesday and you don’t get paid till Friday…

“What is the endgame here? Restoring to full, ravenous health a system that has proven incapable, inequitable and even immoral, whose innovation and scheming has added little if any real productivity or safety to our societies?

WATCHDOG: Before we quibble, first two wags of the tail!  This is another world class column.

Concerning the currency swaps, we would describe it as discovering at the outset of an extended holiday weekend that you had forgotten to get cash from your bank.

Smart hits the nail on the head when he points out that by lowering their interests rates,  the Federal Reserveand other central banks transfer wealth from the general public to the banks.

Hopefully, but unlikely, the same central banks will join together in espousing worldwide regulations and taxes on financial institutions, so bad practices can be reigned in.

Lastly, although not a direct solution, returning tax brackets on the rich to at least the 50% level (as opposed to the current 35% and the 80% during the 1950s) would go far to redressing a lot of imbalance and unfairness in the capitalistic system.

By the way, when we saw the heading we assumed that Smart was writing about the Penn State – Jerry Sandusky – criminal justice system so we got a surprise.