Dear Timothy Geithner,

It’s tough to say how well you will do as Treasury Secretary for the Obama administration.  Clearly you are qualified.  Yet it’s quite “coincidental” how you misinterpreted your tax obligations (and you even worked for the Treasury, come on…).

But that’s beside the point.

I write to you in effort to show you how we need to do without our banking system.  Yes, I said do without.  We’re in a bit of a bind here, the banks, their consumers.  People do not want to keep their money in anything but absolute “safe” bets, US treasuries, FDIC insured deposit accounts, and the like.  Let’s first sum up the general current position of the banking industry – lack of deposits & capital, and no new loans are being made. Sound about right?

I’m sure you’re also aware that TARP money did not go the way planned in order to alleviate banks of their scramble for cash.  Actually, as CNN astutely (but a little behind) just pointed out today – banks did not take that money to make loans.  They invested it (some in US treasuries, giving it right back to the Fed).

To break this cyclical nonsense – I propose this: let’s rid ourselves of the financial intermediaries.  This day in age, nearly everyone seems to be socially networking online.  Let’s make a social network for funds.  Have money? lend it.  Need money? borrow it.  Simple as that.

Perhaps you’re thinking “I want a guarantee on my interest” or “How can I be so sure the money lent will be paid back?”  There’s a solution.  It’s anonymous, but the critical decision-making information from the borrower is not. Public companies will have, of course, public information.  But you won’t know it’s your neighbor asking for $3000 of seed money.  But you do know his intentions, his FICO, his cash flows, possible collateral to put up against the loan.  And perhaps it’s better that you don’t know GM is asking for money.  But you can see income statements, balance sheets, cash flows.  If the stigma of the media is gone, will the appropriate businesses survive?

Maybe some companies are too big to fail.  But surely, the publicity, as well as the forcing of companies to consolidate, isn’t going to help companies get back on their feet.  Putting a blanket over the name, over the identity – their numbers will surely speak for themselves.

So – Mr. Geithner, I ask of you to get rid of the financial intermediaries.  They are clearly getting too big.  Too big to lend out to anyone.  Too big to get deposits on their balance sheet.  Too big to get capital other than by ringing out the taxpayers.  X out the middle men – the banks – and you have a person lending to another person.  An investor lending directly to a company.   Everything made transparent.  

Sincerely,

rogueLynn