As I continue to be in demand in obscure alternative media, I appeared on another radio program this morning. I was asked to comment on the proposal by the Congressional Republicans to create an insurance fund for mortgage securities.

My response is that we should ignore mortgage securities altogether. Just let things play out for the securities and the institutions holding them.

Just make sure that banks can continue to make good loans, especially to small business. Once again, I’ll get on my hobby horse of lower capital requirements. Lower capital requirements for bank lending to small business. The down side of lower capital requirements is that they raise the risk of bank failures, but we have a good system in place for monitoring banks and resolving failures.

The problem of tight credit and the problem of unmarketable mortgage securities can be separated. Focus on the problem mof tight credit, and leave the mortgage securities alone.

Mortgage security trading was a major source of profits on Wall Street, and I know that a lot of Hank Paulson’s crowd want to revive that industry. Instead, I’m ready to treat it like the parrot in the Monty Python pet shop sketch. The mortgage securitization model is dead. It is no more. It is deceased. Gone to meet its maker. It has ceased to be.

We need to take care of the living.