Problem: Credit crises because of the unregulated and “ill-liquid” market, if you will.

The Housing Bubble is ridiculous in it's absurd untethered reality. I use the housing market as an example, because it is perhaps the most indicative mark of stability or safety.

1984 Real Home Price Index 105.85 – 2007 RHPI 195.85 – 2006 RHPI 202.82 (high).

1984 Real Meadian Family Income $45,000 – 2005 RMFI $55,000

The comparable years' indices don't match exactly, but, an 85% increase in RHPI was mirrored by only a 22% increase in RMFI. All allowed by “unregulated” markets. I would call them regulated markets in favor of capitalist leaders, against the long term health of the economy.

In this economy, I see all of us. Our health and stability are directly connected to the health of the economy - nothing radical here. It should be obvious that it is in our best interest to embrace progressive regulations and accuse the proponents of “free market forces” as being naïve to human nature or indifferent to the needs of the body politic. In the extreme, unfettered free markets in practice lead to feudalism and serfdom. Although we're not quite there yet, the recent bubbles (housing, stock market, wage inequality, negative wealth acquisition) have all been bred and developed by orgiastic, Caligula-like growth and speculation. Greed. Irrationality is central to human nature; laws and regulations protect us from our irrational selves.

My Proposal

Initiate an economic stimulus package offered to the credit markets.

These funds may go to projects with proven benefit to overall economy.

Funds may be earmarked for specific industries (i.e. clean energy, manufacturing, infrastructure, state-side consumer products)

These funds may not enter the housing finance market.

Credit institutions looking to access these funds must show the following:

Financial stability, and the ability to assume risk already held. Would also have to subscribe to business procedures and limits relying less on risky speculations.

No holdings in offshore or unregulated American accounts.

Equality in wage distribution. Highest salary (including bonuses) shall not exceed 25:1 against Real Medium Household Income.

Stock offerings shall not be available as employee salary packages or bonuses and may only be purchased through independent bodies.

Payback of funds shall be paid up to 25% of the institution's profit.

Program will be instituted by a bi-partisan commission, Treasury management office as well as institutional economists, academic economists, worker's rights representatives, and state gubernatorial representatives.

I have no idea how much is enough.

I think the housing market and financial influences might have to fail to finally come into check. It might be a wacko socialist idea, but I do not think homes should be so defined by market forces. Homes should not be considered a financial asset, an investment. Homes should be considered as someplace to live and a human right of existence. I think funds should be given to projects for affordable housing in support of our housing trades and priced-out home buyers.

If the financial institutions can't assume or move their risky holdings, then they fail. If current institutions can't prove their stability, there is no reason why smaller or new institutions can't manage these funds. It is obvious the risk levels have been ignored with regard to stability. The rules need to be readjusted and would have to be followed to participate.

No reason to allow institutions to benefit from this stimulus and hide or remove money from our economy. The 25:1 ratio also addresses the issue of money removed or isolated from the general economy. I have no idea what the absolute effect would be if over the last 30 years, while this ratio has exploded, the total income that gap represents were dispersed throughout the general population. I know it would be a big effect, a big effect on the standard of living and overall economic stability.

In 2005 alone, total executive pay covering a sampling of just 350 public held companies was $2,164,952,000 – total pay of manufacturing jobs was $55,551,589 (at the current 39:1) – the difference being $2,109,440,410. That's a lot of money going to just 350 company executives instead of shared in the general economy, especially manufacturing. Although this isn't solid representational comparisons, it shows the creep of wealth away from the general population. I assume it would be a larger spread if compared over the whole economy. And not that the income difference would have to go directly into other income, it could also be used as industry investment.

Offering stock (or other non-income?) as salary will only lead to mismanagement and possible corruption. It also consolidates future wealth in a few, limiting access to the open market which is a stabilizing force over the value of those interests. These non-income salary components could be considered if they become and continue to be treated as taxable income instead of circumventing Federal Income Tax.

I do not know if the 25% payback rate is realistic, but it is necessary to treat the stimulus as an investment with expected return if only to break-even. Arguably, payback from profits in effect takes money away from investors' accounts, but the benefit from the stimulus is aimed at the whole economy and not just those able to invest.

What's stupid about this? What am I missing? And if this is too simplistic in theory (obviously the specifics are not here), why has our economy become so convoluted and bilge laden? I was thinking this might be the three page starting place that should have been offered as a solution.