The market tracks oil risk and Fixing America

Market tracks oil:

Has been ever since the crash. Ben can pump the market only when oil risk is low. When oil risk is high, Ben's pump has no pipe, and he just exchanges treasuries for money. The Fiscal Kenyesians will think this is free money. The problem is the Fiscal money has variable freedom, when spent it drains California and fuels Tennessee. California pays the bills, Tennessee get the welfare. That darned heteroskedacity.

Fixing the problem:

The solution is mathematically simple, but requires a change in the DC Delusion:

Ben should create three of four regional security markets around the nation. Open up the separate markets to regions by proximity. Essentially create three or four independent currency zones. Each region, by qualified municipality, can borrow as long as they keep 15% reserve cash in the regional Fed account. If they default, the bondholders get the reserve and the matter dissolved.

The main advantage is that municialities would prefer local government over the Great Exogenous, we get variability and locality; Hidalgo and Hausmann again. The economy would boom as the municipalities distance themselves from and renounce the DC $15 trillion, leaving that mess to the Kazillions of government workers in Eric Cantor's district.

Gov Brown, are you listening?