Infastructure rebuild is a no brainer for US job growth

In all the hand-wringing and panic about how to rebuild stability in the financial system and growth in the US economy, there are two ideas that are clear as water and should be actioned without further delay.

First, re-separate banks and investment dealers into two distinct and separately capitalized entities, i.e.; bring back Glass Steagall. This need has been obvious for years now. It was a mistake to remove regulatory restraints on these completely separate business areas, and the longer we refuse to admit this the longer we suffer. Banks should have strict capital requirements and be backed by the government, investment banks should be on their own to risk and implode as only they do best.

Second, focus stimulus efforts on a desperately needed infrastructure rebuild in America. I have written on this theme several times over the past few years, here and here.

To accomplish this second goal, CNN’s Fareed Zakaria suggests that the U.S. needs an infrastructure bank. This would be a mission specific entity that could raise capital for infrastructure building in the bond market and put millions of construction workers back to work while giving the country something tangible and lasting for the effort and investment. Simple and beautiful; makes good sense.

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