(1) Every one of the President’s proposals was “top-down”. That’s anti-market. Put money in the hands of the consumers … in a form that must be spent … and they will choose the winners and losers and who should be lent money and who shouldn’t.

(2) “The 5% Solution” says the Fed should require all banks which borrow from and through the Fed, currently at less than a 1% interest rate, to cap their own interest rates to customer borrowers, including credit cards, to 5% above the Fed Funds and Overnight Window lending rates. Also, the banks should be limited to charging fees at no larger a percentage than the Fed charges them.

Hey, while my bank creditors are borrowing at 1% due to the economic crisis they caused, they are charging me 30% plus monthly fees due to the economic crisis they charged. What’s wrong with this picture? Doesn’t a 30% spread sound like a huge incentive to create more economic crises!

(3) “The 20-to-1 Solution” was suggested by Peter Drucker. (Yes, that Peter Drucker, the so-called inventor of management science, top business consultant throughout the 1940’s through 1970’s, and author of numerous best seller how-to-manage books starting with “The Corporation”.) Drucker was appalled by the exploding gap in compensation during the 1980’s.

Drucker had always emphasized the impact and role of the Corporation in the Society and the fact that a thriving middle class had proven again and again to be necessary for both a thriving economy and a thriving democracy … and the very survival of Capitalism.

So, Drucker proposed that the highest paid person in any Corporation should be (totally) compensated no more than 20 times that of the lowest paid. Until the 1980’s that was the gap between top and bottom in most companies.

It wouldn’t cost the government or businesses a cent. It would raise average consumer purchasing power enough to restore the economy (and the middle class) and perhaps a few executives might be willing to work for that 20-times compensation. The President cannot command this; but he can require through Executive Order that all companies (and their vendors and subcontractors) who do business with the federal government do it. And, the Fed can require banks to do the same.

I am pro-business, pro-capitalism, pro-banking, pro-market … and pro making money. But things are out of hand. The gap is too big. Pigs get fat while hogs get slaughtered.

The bell shaped curve looks more like a heart monitor. If we looked at mode average rather than mean and median average for income, we would find the quintiles frighteningly similar to that of Tzarist Russia and our own Guilded Age of the Robber Barons … both exactly 100 year ago … both leading to radical political revolutionary movements … Russia’s succeeded but the Roosevelts diffused ours with “A Square Deal” and then “The New Deal”. It’s time for “A Different Deal”.

The increase in health care costs is severely exacerbated by the fact that, during the period 2000-2009, real income of most Americans were flat or fell … despite an economic boom. Had mode average income tracked with economic growth, then the impact of increases in health care costs would not have been felt so hard and would not have created such a hostile environment.