One is supposed to think roughly this: the crisis drags on simply because business doesn't get off the ground again. That's because the banks, “lifeline of our economy,” aren't supplying business people with the credit they need. They aren't doing this because they sit on a lot of “toxic assets,” which is why “no more trust” exists between them, like in dealing with the rest of the business world. So its clear that the state must do whatever is necessary to help them out of the crisis, and thereby all of us. This should be accomplished by an “ultimate step to rescue the banks” with the name “Bad Bank.”
Such a thing has never existed before in this country, and its alarmingly expensive. But it is, first of all, inevitable – “time is pressing.” Secondly, the model is an “impressive idea,” and thirdly, it's really “not illogical” how the crisis is tackled by the state: for the purpose of relieving banks of their “bad assets,” a special purpose company incorporated specifically for this purpose is very logical. A special bank registers securities which have no value as its assets, they go back to the banks in the form of loans whose value the state guarantees, and this impresses: they have “cleaned up their balance sheets,” they can “trust each other again” and this will “revive the credit business.” In this way, the annoying crisis can once again be brought to an end.
It's not exactly easy to make sense of this as somehow plausible, but in any case its urgently imperative.
* It is certainly undeniable by now that a general opinion has taken shape about the quality of the business articles which the banks cultivate for their business: they are no good for the purpose for which they were invented. These fine “structured securities” of the banking houses are, as the experts convincingly affirm, “in critical condition.” Concealed behind the technical initials which everybody has mastered by now (ABS, CDO, CFO, etc) are “badly appraised,” “barely disposable,” “worthless toxic securities” which should be “decontaminated” as quickly as possible. However, these same experts also report an extremely strange problem which shows up in the process of disposing of them. Simply throw away “scrap securities” like scrap? For heaven's sake! This is out of the question. “Toxic” waste of this kind is not simply burned, no, it needs a very special landfill.
The difficulty in disposing of this garbage is that it brings up the interesting question as to how many toxic securities are interfused with the assets of the banks. This is difficult to determine because one has to know which papers are “toxic” and which are not. It can't simply be read on their labels which ones to shelve alongside the – still – above-board existing loans at the banks. What they are effectively worth and whether anything else, how much they could soon be worth again or whether they will remain worthless forever – all that is not marked on them. For the pros of the debts and risks business, there may be ample indications for speculating on them, like on anything. However, the same applies to these clues for their calculations as to the stuff they speculate on: what they are worth is decided by them in practice; namely, by the fact that they ply their trade with them. Only, they just don't do that now, the otherwise normal competition between suppliers and purchasers which determines the price of the product called a “security” has been suspended by its own agents, and the reason why is no big secret: banks in their capacity as purchasers don't buy from each other because they fear reeling in a valueless piece of paper instead of an automatically increasing source of money; in their capacity as sellers they don't search for customers with their abundantly available offers because they fear getting the worthlessness of their commercial articles definitively certified in the form of missing purchasers; and anyone who has to sell nevertheless to balance accounts thereby lowers the price of the type of product sold and further decimates his assets. This is how insanely the free market economy, the best of all worlds, works: the securities are not traded because they are worth nothing, and they are worth nothing because they are not traded! Even more absurd is what devastating ramifications this entails: because debts in the form of securities with certified promises of being worth more in the near future than today no longer find prospective customers who want to become richer through an “investment” in them, nothing in the whole rest of this fine economy now runs like its supposed to. Producers and distributors of quite tangible use values, and in the end even state budgets, go into crisis – because those who trade in pieces of paper without use value and value have dropped the business bases of their enrichment!
* Its exactly this market economy madness that will be kept alive with the “Bad Bank,” no matter what the cost. A gigantic effort is organized especially for the purpose of writing off from the fictitious capital of the banks preferably nothing which has turned out to be worthless as worthless. Instead, according to all the rules of the art of accounting fraud, a juridical fiction of economic value is construed that plants economic value on bank assets that have become valueless – in the form of a bank which officially initiates its business operations with a bankruptcy, but precisely to rescue all the remaining banks from the same, and this should grant them the basis for further legal capacity: so that they again show a plus, they may stow away the minuses in their balance sheets with a company with the apt business purpose of storing their depreciated financial assets for 20 years as sources of wealth in waiting – and if the state takes care of the matter, capitalist money increases on an astonishing scale simply by federal law! In return for a scrapping premium amounting to 10% of the book value of the worthless slips of paper, for which they themselves must be liable in this case, the banks then again obtain plenty of the stuff with which they ran themselves and the rest of the economy into shit: new debts whose goodness is guaranteed this time not by a fantasy of their structuralization but by state power – which is also why they are good again and in their hands can be used as a source of money, increasing according to all the tried and true rules of their trade! That is the banal concern which is so perfect for clobbering us with the stupid image of a “lifeline” on which we all depend. That is the purpose for whose “rescue” simply nothing is too expensive for the state, and anyone who now grabs his brain and asks what kind of world he really lives in is on the right track. Only, he shouldn't stop with this question, because what is the establishment of a “Bad Bank” compared to the insanity of the business principle whose continued existence it should ensure?!
* One also extracts a truth if one allows the endpoint of the popular if-then connections with which the experts of the market economy fudge all the idiocies of their society into successively-ordered laws of growth and from these derive why the reorganization of the banking system is one single necessity for the state. If they and everyone of distinction in politics and economics in this country time and time again assert that without a reconstructed banking system no growth takes place, then one can also let that stand for itself – and ask whose wealth flourishes in such an exemplary manner with a thriving banking business in a market economy like ours? This will then obviously be precisely those who thrive in exactly this line of business. To trade debts as commodities, to transform lent money into property titles with built-in promises of growth and to distribute the means to profit-making – that is the source of wealth without whose functioning nothing else happens! Fanatics of GDP growth and export figures record the very first business principles which govern the market adored by them. To have others' money work for themselves as a source of money, to put this down in any duplicated form desired, and to buy and sell them – no, this not only enriches the traders of these products: this is at the same time the elixir of life of the whole rest of the economy, including the debtor himself! And for the whole rest of this great market economy this is the clarification that it also has to prove itself as a loyal servant of this type of wealth increase. It is the lesson that the equations executed in the world of finance – money is more money and giving away money in order to dispose of the right to more money is the method of all methods for increasing wealth – these control the direction over everything that unfolds in the so-called “real economy” as the command power of money. Because they say so themselves: if these equations no longer add up, the purchase of means of production and labor will just cease in a lot of places, and it goes without saying that, in this sequence, the procurement of the means of livelihood of the ordinary money earners just doesn't work out, now more than ever.
* The suspicion that “money rules the world” sometimes accompanies the market economy, even when it is not in crisis. If it is, the suspicion sometimes takes moralistic form as an accusation. That is no good. One should not simply make accusations, but look at this world, which in the invention of “Bad Banks” gives such clear lessons about what matters in it. Better to soberly and objectively notice the content of the lesson – and then one discovers that money – specifically, money in its determination to become more – is not there for anything other than ruling the world.
“Bad Bank”: all the absurdities of constructing such a thing in order to rescue the banking system, the huge effort with which it will be launched and then nurtured for 20 years, all this makes clear how absolutely and unrelentingly the regime of money, the objective constraint of its propagation, commands the life of the market economy. And if one has figured this out, one simply no longer desires to go through life with the stupid opinion that its not fair because its really about something else.