An outsider's suggestion to solve the Global economic crisis

For more than 80 weeks the general public have had the chance to enrich their economic vocabulary with words like Sub Prime, Global Economic meltdown, Toxic Assets or Non Performing Assets(NPA’s), Bankruptcy etc.



What the hell is going on and why so much of noise from the people who are entrusted with the job of guiding and navigating the economy. Can’t they fix this damm problem or, where are world famous, Nobel award winning economist, financier and other learned people who are supposed to be masters of economics. Aren’t they supposed to create a picture of confidence even before the common man had a chance to hear or read the above mentioned dreaded words in their local dailies.



Unfortunately the real world issues can’t be captured accurately in the “so called” economic models which are widely used inside the Global financial institutions. We still haven’t learned to predict accurately the human behavior. That’s why still we can send a probe to land in distant planet Mars or orbit around Saturn but cant eradicate poverty, mal nourishment etc. Ever since human being came out of the jungle a lot of rapid development and progress has been made on the Hardware side ( technology, material comfort etc) but the software (human mind) hasn’t been updated with latest upgrades or patches.



So here I am throwing my hat inside the ring, suggestions to solve the Global Economic Crisis.



1. Creation of new Banks, promoted by the government under strict banking regulation laws. The Western world can very well base their laws on Indian Banking laws. These banks should have at least 900 billion – 1 trillion dollar of cash. The employers working in these banks should understand the quality of the product being sold.


2. Distribute money to the common man for e.g. let’s say 1000$ each, instead of giving bailouts to the banks which is like pouring liquid in a bottomless pit. This will increase either of these consumer spending or repayment of debt or consumer saving.

3. Nationalize the “toxic assets”, meaning let the Government own up the NPA until their valuation comes up. In this way the tax payers money is not squandered in the longer run.

4. Create ambient conditions to instigate the banks to seek out quality clients and sell quality products thereby increase the “Trust quotient” among banks and public.

5. For another couple of years convert all the banks to provide only Micro Credit Loans, where the cost of failure is very marginal but the upside is pretty rosy.