Capitalism 2.0?

I've heard a great deal of talk about this in the wake of this 'crisis,' and it troubles me. I commented on the linked article, my thoughts also available here.

One of the basic tenents of philosophy is that while one cannot prove the existence of others, the act of proof is sufficient evidence to assume one’s own existence (I think, therefore I am). The only person, object or force in all of reality that must exist is you yourself.

Given that, freedom is not a luxury, or a benefit we receive from benevolent governments. Freedom is a fact of nature. 

Capitalism recognizes that nature and attempts to harness it for the best possible outcome. To deny freedom is to reverse the basics of philosophy, holding each person more accountable for the well being of others than that of those they directly care about.

Please don’t misunderstand me. There must be discussion about the proper law society uses to hold people accountable. Peaceful coexistence requires standards of behavior. If those standards are called ‘regulation,’ then fine. But if you deny the basic reality that Freedom is natural and required for life, then expect disaster.

Craiglist Crime Syndicate

http://news.cnet.com/bank-robber-hires-decoys-on-craigslist-fools-cops/?tag=rtcol;pop

The crook hired people on Craigslist to show up near the scene in a particular outfit while he robbed an armored car and made a getaway using an innertube. Police are still looking for him.

Competitive Alternatives

I'm really bothered that in all debate around the topic centers on the concept that if one is against this bailout, then one is in favor of 'doing nothing.' I have not heard a single serious alternative even floated about how to fix this problem.

I want to hear more about capital requirements. The Chinese have lowered theirs while theEuropeans have raised theirs. Here is my proposition.

Complicated Proposition

The fed should decrease the reserve ratio from 10% to 8%.  That would change the liquidity multiplier from 10 to 12.5. There are 6.3 trillion in time deposits, which probably means there's 630 Billion in base deposits. Reducing the reserve ratio by 2 points would instantly create 1.58 Trillion in liquidity. The danger here is that doing this could inflate the dollar by a lot. To limit that, announce that the reserve ratio will rise by 1 tenth of a percent each quarter until the ratio is back at 10%.

Simple Proposition

The same thing just explained in more detail for the many who  don't follow all the terms  in the complicated version. Follow the link.