The discount window is something that, while necessary, should be discouraged and penalized. It is corporate welfare and hurts the overall economy. I can only imagine the abuses that the banking system has done that we can't know about for fear the system would collapse with such knowledge.
The mystery of money is the substance of money, by people being in such ignorance about how the system works that those who know the truth profit from it most. After all, banking is based on loaning money that does not exist. If you rent to someone a car that does not exist, you'll probably go to jail for fraud. In banking, it's business as usual!
The discount window should be available only on an emergency basis and organizations should be required to make organizational and structural changes when they use the window in exchange for the use.
Inflation is a hidden cost these organizations externalize on all of us. We must end the corporate welfare. We should not keep zombie banks alive at the cost of the soundness of the greater economic good.
Dec 10 2009 - 5:52pm