It's ridiculous to suggest that anyone wants an economic collapse to puff themselves up.
Perhaps this article can bring some clarity to what you think will be a "vibrant banking system".

Paulson's Reasons for Delaying Day of Reckoning: Jonathan Weil

Commentary by Jonathan Weil
Oct. 2 (Bloomberg) -- If you think this bailout is expensive, just wait until you see the next one.

The $700 billion rescue plan approved by the U.S. Senate won't fix the core problem with the nation's ailing financial institutions. And it almost guarantees that you and I will have to pony up for an even costlier bailout someday, maybe soon, if the House of Representatives passes it tomorrow.

Treasury Secretary Hank Paulson has correctly identified the quandary: Lots of shaky banks and insurance companies are showing strangely high values for assets that aren't worth squat in the market. Many need more capital and can't raise it. And he's right in saying the outlook is grim if we don't get this fixed.

What's stunning is how little the taxpayers would get in return for their money under Paulson's package, and how illusory much of the banks' newly minted capital would be.

Under the plan, Treasury would buy some companies' troubled assets at above-market values. To boost their capital, Paulson would have to pay the companies more than what their balance sheets say the assets are worth. Then other companies would use the rigged prices to write up, or avoid writing down, the values of similar holdings on their own books.

So, the taxpayers get hosed on the asset purchases. Other banks use the trumped-up prices to cook their books. And investor confidence supposedly is restored.

That brings us to this question: Why would a smart guy like Hank Paulson -- the former boss of Goldman Sachs -- advance such a dumb, shady plan? Let us count the reasons:

No. 1: It delays our national reckoning until after the presidential election.

Paulson first floated a bailout Sept. 18, at the very hour when shares of Goldman Sachs Group Inc. and Morgan Stanley looked like they might go into a death spiral. It's not so much a bailout, as it is a timeout. He had to follow up with something, anything, to stop the freefall from resuming. It didn't have to make sense.

So it doesn't. The plan is about creating the illusion of stronger financial institutions, not strengthening them.

The banks know this. Otherwise, they would have stopped charging each other near-record rates for three-month loans by now. The reason they haven't is because they're still afraid their customers -- other banks -- might go broke.

No. 2: The reckoning will be worse than you can imagine.

If Paulson were serious about recapitalizing rickety U.S. banks, he would infuse them with hundreds of billions of dollars of fresh government money, in exchange for ownership stakes. And if he wanted to create market liquidity for all those troubled assets on their books, he would be ordering banks to disclose everything there is to know about them, so Mr. Market could figure out their present value.

He can't let that happen. Not now. If everyone could see how much the toxic waste is worth, the writedowns would be so huge that many banks would have to be declared insolvent.

Better to let the next administration deal with the clean- up. The trouble is, the longer the government waits to address the banks' lack of capital, the worse it gets, barring a miracle.

No. 3: He's helping his friends.

Is there any doubt? Let's see.

As of yesterday, Morgan Stanley Chief Executive John Mack owned 2.75 million shares of his company's stock, valued at about $67 million. If Mack can get Morgan Stanley to trade reams of sketchy paper for billions of dollars of our Treasury's cash, without diluting any of his stake in the company, who benefits?

Paulson would have us believe it's you.

No. 4: There's an excellent chance the Congress will pass it. Leave someone else to figure out the costs another day.

(Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: Jonathan Weil in New York at jweil6@bloomberg.net

Robert, your willingness to deliver a bitter message is laudable, but you must realize that only a certain percentage --- unfortunately, perhaps a rather small percentage --- of your audience is ready or willing to hear it. When Obama (or God forbid, McCain) have to deliver the same message, he will be met with the same rile. God help him (either one).

Now, I think I get what you are saying, and I have heard it from a few other sources as well, particularly from author Kevin Phillips: Essentially, Americans are addicted to cheap goodies, and buying their cheap goodies now instead of tomorrow, and on credit instead of using real cash that they have already earned. The American politicians know this, and they also know that the American voter will be infuriated at the mere suggestion that he should get financially well again by going thru "goodie withdrawl" --- quit buying all those goodies and teach yourself how to put real money into savings again. Any politician that delivers that message without a sugar coating an inch thick is not likely to survive the next election. As incredibly productive as the American worker is, he (or she) still manages to spend more money than he or she brings in.

Now, on first glance, there might not seem to be much difference between what I just said, and what you, Robert, just said ("25% of humanity that is at death's door while some folks are lamenting having to give up Starbuck's"), and what Phil Graham said earlier this summer, that Americans are a bunch of whiners. Well, calling us "a bunch of whiners" is oversimplifying to the extreme, but it is true that we need to face up to some painful realities if we are to get ourselves out of this mess in a non-cataclysmic way. Next time around, newlyweds Dick and Jane might need to buy a little three-bedroom bungalow in Fresno instead of immediately grabbing the house of their dreams, a 5000-sq-ft bohemoth in Sausalito.

And even so, the path is not clear because our leaders are sending mixed messages. They tell us to spend to "stimulate the economy" and then they tell us to save to provide liquidity for the financial markets. I don't know about you, but the dollars that I receive cannot be saved and spent at the same time.

And yes, if the American economy collapses, then all the foreign aid and economic stimulii we are pumping out over the globe will disappear too.

Now, Robert, how close am I getting to what you're trying to say?

Ridiculous doesn't begin to describe it. Wacky and silly come closer but even they don’t full describe the statement “I think some people might like economic collapse so that they can puff themselves up…” How does that relate to anything dealing with the economic crisis caused by the losers who run the economy?

Do you think they’re spreading bad news to try to destroy the economy? If so they’re a threat and we need to contact Homeland Security right away. Give us some names, for instance one person who posts at Bilerico and from another source? I’ll make the call and save you the long distance charges.

What you’re trying to do is divert us from the real question? To try to shift the blame away from the corporate rich, management and the politicians who service them. They wrecked the economy all by themselves and trying to apologize for them is futile. It won’t work.

Capitalism is a failure and the proof is all around us. A $12.5 trillion to $15 trillion debt by the end of the year, an unwinnable war that’s become genocide, soaring unemployment, massive numbers of foreclosures and soaring unemployment (159,00 in September alone) and a health system closed to one in six. The parties who support it and bail it are already despised for their efforts and that will only intensify.

Secondly exactly why will one fourth of humanity starve unless we cover the losses of the losers who’ve irreversibly wrecked our economy, our standard of living and our future? What countries do they live in, what’s the agricultural production capacity of those nations, and how will making a few incompetents pay their own debt, as Lincoln recommended, relate to the starvation of billions. Is their only source of credit US banks? Do you have any facts for us, any analysis, or are you just making this up as you go along?

There may indeed be more widespread food and water shortages and more starvation in the future, as bad as what’s occurring African regions undergoing desertification and among the homeless in many North and South American cities but it has it’s origins in the kind of economic damage inflict by Clinton’s NAFTA, Bushes withdrawal from the Kyoto Treaty and the greed of food speculators, oil speculators and housing speculators, and so we’re back to the real villains in all this: the corporate rich, who are a pack of greedy wolves and losers.

Michael Moore describes them to a T:

The richest 400 Americans -- that's right, just four hundred people -- own MORE than the bottom 150 million Americans combined. 400 rich Americans have got more stashed away than half the entire country! Their combined net worth is $1.6 trillion. During the eight years of the Bush Administration, their wealth has increased by nearly $700 billion -- the same amount that they are now demanding we give to them for the "bailout." Why don't they just spend the money they made under Bush to bail themselves out?

Not all of us are so limited. And many of us are, as you say, open-mined movement theoreticians with ideas worth reading, as opposed to merely glib and wrong.

Now that the rip-off has passed Congress with overwhelming support from Democrats maybe you can calm down. Any losses your portfolio incurs will be paid for by... the rest of us.

1)"As you said Bill:'...why will one fourth of humanity starve unless we cover the losses of the losers who have irreversibly wrecked our economy..." "...do you have any facts for us, any analysis... What countries..." So answer the question? Or we'll assume it's just another of your innumerable evasions.

2) Lincoln's remarks are totally relevant. You'll get more chances to read them, so maybe you'll come to understand them and their significance at some point.

3) Your history's off as usual. The Daily Worker ceased publication in 1956. In any case I wouldn't like it much - the Stalinists have been hard core Democrats for decades. They just don't talk about it but if I went to a DP meeting, holding my nose of course, I bet I could spot them.

4) No emails. After the second poison pen email you sent me I blocked yours for good.

And no one is yet fed.

The price of oil/cost of rice component comes from the transport costs, but in Utopian Socialism where no one pays for anything it would not matter.