The global financial crisis in its current phase apparently boils down to the fact that banks won't lend to each other, to businesses or to individuals as we are told by the BBC, Bloomberg, MarketWatch, the Times, MSN MoneyCentral, etc. Everybody agrees on the problem, even Socialist Worker!
We have seen governments try every inducement - buying off the toxic debt, provide unlimited liquidity, nationalising banks, lowering interest rates. Nothing has worked.
"Nice" is not working. Time for a somewhat harsh solution, but hey, the world's future is at stake and in the past governments have not shied away from being somewhat heavy handed when the occasion called for it (here you can fill in your own favorite example, depending on which country you hate the most).
My solution rests on the fact, at least I believe it to be so, that the banks are run by people. Now, all people have emotions, even bankers, and the one emotion stronger than greed is, you guessed it, fear. Right now, bankers are afraid of lending. So we must replace the fear of lending with a greater fear of not lending.
All the heads of the various governments, being on a first-name basis with all the head honchos at the banks, or so we are constantly told, must therefore have their phone numbers and addresses. Therefore, George (Bush), Gordon (Brown), Stephen (Harper), Angela (Merkel), Nicolas (Sarkozy), Taro (Aso) ... should pick up the phone and "suggest" to bankers that they start lending. I'm sure their people and communication skills will be more than adequate to convey the "accidents" that might happen to them and their families should the bankers fail to change their destructive non-lending policy forthwith. Using certain specialist human resources to back up the suggestion, it would only take one unfortunate uncooperative banker for word to get around and things to change rapidly. Surely that would be a small human sacrifice compared to the untold misery facing millions of citizens who would suffer in the hard recession that is developing as a result of the banking freeze-up.
I don't know the going rates for such specialist resources but it surely is much cheaper than the several trillion dollars already spent by the US alone. And my fee for this suggestion is a standard investment banking rate, discounted by half as my contribution to these difficult times, only $0.001 trillion (and pay that in Canadian dollars please because I suspect the USD will soon be toast).
... later on ... Ha, ha ha! Just found this column by Robert X. Cringely in which he seriously suggests something similar - the heavy he suggests is Jack Welch, famous former CEO of GE.