Clunky Flow

I proposed the simple idea of ‘internet only’ ‘new banks’ back here in “My friend the economist and my dumb question.”

Since then Buiter, Stiglitz, Soros and Romer have proposed similar schemes. New banks: Did I get the scoop? Did you hear it here first?

But the really good news is that Marc Andreesen is now pushing the idea.
Why is this good news?
Well, Marc Andreessen could carry this idea.

Andreessen’s got all the right credentials ie he is a wunderkind of the industry of wealth-creating technological innovation and has none of the wrong ones ie he is not of the wealth-destroying financial innovation industry.

And Obama and Andreessen are already personally acquainted.

Can Andreessen carry this simple idea to move Obama? I hope so.

And I hope it can be done in time to demonstrate the Irish leaders that there is a smarter and simpler way.

Talk about ‘new banks’ 50 minutes in. Transcript below. But note that as always Andreessen give great value entire way through.

Good banks, bad banks, doesn’t matter. What we need are new banks. And I actually think what we need — and I think the valley can play a role in this, I think there should be a new wave of financial institutions that should be created from scratch today. And they should take the role.

So instead of trying to unwind some big bank that’s underwater, and hundreds of billion dollars insolvent, let’s create a whole bunch of new ones.

And by the way, let’s have them all be new and online.

So instead of having all this infrastructure and all these old systems and these ATM’s and all this stuff, let’s do purely online, purely Internet banks.

Purely virtual, much lower cost structure.

Because it’s going to take — even if you can figure out a way to fix the old banks, it’s going to take a long time. I mean it is a very complicated and involved process. They are deeply broken in very fundamental ways.

Create a new bank. I mean a bank is a simple concept. You can create a bank in software.

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