Obama is asking for ideas, and while I have no faith that they will go anywhere, I sent one in anyways.
Namely, I’d like to see a sovereign wealth fund ultimately responsible to the Treasury, under advisement of Commerce and Labor. The mandate for the organization would include:
- Ensuring restored market liquidity by sheer force of gravity (if possible), or via the right of the stockholder (as necessary).
- Providing venture capital to entrepreneurs, particularly in carbon-negative (e.g. clean energy, public transit, etc.), ecologically renewing (e.g. toxic waste cleanup/disposal, recycling, etc.), and high-tech (e.g. high-speed telecommunications) industries.
- A lender of last resort for stable companies during dire times (e.g. right now).
I also had points about creating a federal credit rating agency, but I think the end goal would be better served by requiring outside audits of credit ratings. I also had a point in there about investing in existing businesses who add jobs in the U.S., but I think you’re guaranteed to have pretty severe corruption in such an investments program, to the point that it undercuts the profitability of the program.
It isn’t a particularly radical idea, most resource-rich countries already have SWFs, and Sarkosy was stumping for this in Beijing weeks ago. Further, it’s my understanding that much of this authority is already held by the U.S. government today. The primary change is reorganizing the disparate authorities into something resembling an investment bank—with the taxpayer as shareholder and a mandate for profitability.
Oversight must be absolutely airtight, perhaps a well-funded adversarial organization within the executive branch (a joint operation by Justice and the SEC which provides their investigators with a petri dish of what nonsense to look for in the private sector—perhaps they will then be able to keep up with changes in the market?) in addition to the more traditional oversight exercised by Congress.
I cannot stress enough that the success of such a program—rather than it’s devolution into a cookie jar of farcical proportions—requires that there be as many people as possible who’s feifdoms depend on rooting out corruption in such a program.