The TRIZ analysis of the current financial crisis and how to solve it
(The invitation to a discussion)

The current crisis is the result of the long-term problems in the economic system, which were causing imbalances that have been accumulating over the long time until they reached the threshold which triggered the catastrophe. But all proposed remedies aim at resuscitating the system without fixing the problems: buy bad debt from banks so that they start lending money again; buy stakes in banks (or nationalize them) in order to prevent them from collapsing; enact a new stimulus package in order to temporarily spur customer spending in hope that it will jump-start economic engine which then will be working by itself without new stimulus packages; do nothing in order to let the crisis to dissolve by itself, etc.

It is well known that short-term remedies for long-term problems have never had a lasting effect. One has to either apply long-term remedies or fix the problems.

What such a long-term remedy could be ? For instance, instead of spending $700 billion instantly on buying something (either bad debt or stake) spend it on a long-term project, e.g. building a Moon station or setting up an expedition to Mars. It is a pity and unfortunate that space exploration was curtailed in order to save tens of billion dollars (that undoubtedly contributed to stalling the economy) and now we are facing the prospects of throwing hundreds of billion to the funnel because of the miserliness in the past. It is pretty obvious that spending money on such projects will re-ignite economy better than any stimulus package.

There could be other long-term remedies, of course, but fixing the problems that caused the crisis is even a better approach. The main problem is that most shares traded on stock exchange ceased to have any value outside stock exchange. In the past they had value of their own because they guaranteed dividend which allowed one to value them without stock exchange. But now the only which is left of them is price at which they are traded on stock exchange. If they are traded at price zero then this is their value. One would not be able to squeeze anything more from them because they are backed by nothing.

In the recent years the situation reached the point which is best described by a paraphrase of Abraham Lincoln: it is possible to fool some investors all of the time and all investors some of the time but it is impossible to fool all investors all of the time. Eventually investors lost trust in backed by nothing financial instruments and stocks started falling.

How this problem could be fixed ? Firstly, profitable companies have to be separated from unprofitable. Their stocks have to be traded on different stock exchanges. Their shares should never be mixed. This would allow conservative investors invest into reliable stocks and risky investors pursue their dreams at another stock exchange. This would make risk management more manageable.

Secondly, holding shares of unprofitable enterprises has to be made financially disadvantageous. Currently shareholder may profit from shares of an unprofitable company and the only thing he/she bothers about is its stock price. To fix it, he/she has to be made personally liable for the share of company's debt proportional to the amount of shares he/she owns.

There could be other approaches to restoring liability and trust without which markets cannot successfully function. Anti TRIZ-journal calls on its readers to start proposing and discussing them.