Financial Dinosaurs in Pain

And why shouldn't they be? How would you feel if a giant glacier was crushing you into amber?

The fact is, these big overleveraged banks are dying because of their own obsolescence. These banks encouraged and exploited an American economy that not only continued to make money, but HUGE amounts of money, even though our population had stopped living within its means long ago. Somehow, financial institutions were able to become even wealthier by selling the idea of American economic strength to their investors, even though our productivity had been falling for years.

But, optimist that I am, I think we're better than that. I think America is on the verge of an economic Renaissance because of the new opportunities available to future-oriented business entrepreneurs. Unless, of course, government intervention prevents us from competing.

Don't get me wrong. I am no free market dreamer who denies the importance of governmental involvement. In fact, the most important reasons for America's economic dominance was because government did subsidize new and developing industries. We've been doing this since even before the Louisiana Purchase in 1803. Why stop now?

But the latest plan to bail out the banking industry -- at least a day after Treasury Secretary Geithner's announcement -- looks like a loser. The one thing we know about dinosaurs is that they become extinct. That's what is happening now. The question is whether the American economy can only be saved by saving them.

I don't think so. What amazes me is the absolute certainty -- going back to the creation of the TARP Plan last October -- that the best way to avert a possible depression is to put the dinosaurs like Citigroup (my bank, by the way) into rehab therapy until they can start acting like healthy dinosaurs again.

What I'm getting at is this. This country has thousands of banks that are NOT dinosaurs. They are not leveraged up to their eyeballs in debt, and they continue to make loans to the American people. It's just that they were never capitalized enough to compete with the dinosaurs. Until today, that is. They have lessons for us on sound financial management that has allowed them to survive the coming Ice Age. Why haven't we been hearing from them?

Instead of just pouring taxpayer's money, and our future wealth, into the dying behemoths of the past, let's subsidize the leaner, smarter banks that are surviving. Instead, we've been introduced to huge new programs that totally ignore them.

I think the American people are losing out by ignoring them. I would like to see the Administration design a program that would guarantee the expansion of loan activity for banks that are continuing to make loans and do not need a bailout from the government. Why not get testimony and suggestions from them instead of the braindead CEOs testifying before Barney Frank and the House Retribution Committee?

There's still time to tap into this resource before pouring trillions more taxpayers' dollars into a prehistoric swamp, where it will disappear forever.