Let's All Be Banks!

Update to yesterday's post:

It appears that Philadelphia, Phoenix, and Atlanta have written to Sec. Paulson, requesting funds from TARP to support pension plans, and other things.

If these cities are allowed to "convert into banks", then we are proceeding down the course of the nationalization I mapped out. First banks and insurers, large financial entities, are incorporated into the "single balance sheet", then industry (GM), then municipalities. Market and Industrial Zone-Entities (MIZE, consider it coined!). Leaders of the entities are allowed to retain control, but all monetary liquidity, assets, and debt are flowed through the Fed system.

Of course, they won't let those cities become banks. Instead, they just say, "nope, just wipe out the pensions, but keep building highways." Fair enough, I guess. This isn't the Soviet Union, after all!

But more to the point, it doesn't matter that they won't get TARP funds. The Fed is becoming the single market, whether they like it or not. But, can they handle that role....