There are many who believe that the US Economy can and should be revived by an effective rescue of the Financial sector. They seem to be under the impression that we should take care of the money markets which will then return to their rightful position as guides of capitalist development. Newly restored to vigor, these markets will take care of us.

And it appears that most of these advocates of a rescue of the financial sector would have us work within the current financial system, using the same tools and the same management cadres as before. It wasn't really their fault, after all, we were the ones who did all that borrowing and we, the sovereign consumers ought to foot the bill. They just showed us how to use the dope, assured us that it was not addictive and marketed it to us, they didn't make us use it.

Now it should be clear that Wonks Anonymous does not believe that a new round of consumer debt is what the economy needs right now. We have been using consumer spending as a substitute for real investment for far too long. My people call it monetary policy. He is a firm believer in private thrift and the proud owner of a 1980's vintage color TV.

Wonks Anonymous does, however, recognize that there is some need of borrowing and lending and a well regulated financial sector is needed to continue economic activity. He does not see this happening with our current banking system.

Our banks today manage to simultaneously discourage savings and deposits and restrict credit to businesses and private individuals who can and will be able to repay their loans.

When was the last time you saw a positive return on the money in you savings/checking account. You keep it in the bank because it the only place you can keep it. And, when you want to get it out in a part of town where your bank does not have an ATM, you pay dearly.

At the same time, well run businesses find that their lines of credit have been canceled without recourse. Just as nobody bothered to check out borrowers in the boom before they made the loans, nobody is checking out borrowers before they pull the line of credit.

It seems to Wonks Anonymous that bankers have become addicted to a steady flow of free money from the Fed and are now trying to become addicted to unconditional rescue when their unconsidered investments go south.

It is not that banks do not valuable resources. They own computer networks, ATM machines and other capital needed to move money around and they have valuable employees who are trained to talk to customers, asses credit and make loans. Banks have simply mismanaged these resources over the past decades.

Now that we are on the verge of owning several major banks - in fact if not in law - it is only logical that we should take control of them. When we do this we need to run things differently. Securities based on consumer debt are an invitation to mismanagement and fraud. The people who make the loans do not lose money when the loans fail and the people who buy the securities can do nothing to manage the loans. We need to get back to retail banking and if this slows the flow of credit well maybe the flow has been too free lately.

Wonks Anonymous nominates the SF Fed to run a pilot project to reform the financial sector and reconstruct the banking business. Wells Fargo or, more likely the California operations of Bank of America are likely to be in need of rescue in the near future. Janet Yellen is a fine woman with no bedad nonsense about her. Her child is grown and in college and she is no doubt equal to the task.