The Federal Reserve Bank is set next week to further reduce interest rates for banks – the very banks that are looking to continue tightening the reins on granting credit. The Federal Reserve by all current wisdom would seem to be powerless to do anything but effect interest rates – but that is not the case. The Federal Reserve has the authority to effect and force change on member banks and how they grant credit – and for what.

One of the reasons the United States is in a freefall economically is our “addiction to oil” as President George W. Bush put it. That, and the massive cheap imports coming into the country to fuel the consumer economy – with most of the manufacturing capacity and capability of the country sitting idle.

With the dollar cheap against the euro, the yen, and virtually every other currency on the planet, the cost of maintaining the current status quo continues to rise, but anything still being Made in America seeing significant increases in exports. Something has to change.

Perhaps the Fed needs to take a closer look at how it’s doing business.

The Fed could force banks to offer below-market loans to individuals, for the installation of green technologies, and for energy-generation capacity at the level of the private individual - and it could be forced by Congress to do so. It may be even capable of this sort of forced feeding of the economy by Presidential mandate.

Such a program would have a two-pronged effect – the manufacturers within the United States who are the world’s leaders in technologies such as solar photovoltaics and other electrical generation schemes such as Stirling engine systems, wind turbine generators, and geothermal heating and cooling systems, would have a massive market open to them for smaller and more efficient systems. Private research dollars would flow more rapidly into these areas as a consequence of the dollar signs dancing in their heads much like sugar plums at Christmas.

These systems would then be suitable for export, and if the cost-curve follows that of the previous thirty-years of history, the cost of those systems would fall rapidly after the first five years of deployment, keeping those industries cost-competitive for world export.

And the reliance on importing oil and natural gas would rapidly fall – strengthening the dollar and lowing the overall debt of the American people.

Such a program would have to be long term – not a quarter-by-quarter or year-to-year program for it succeed. It would require a minimum of a five year commitment by the Federal government to have any hope of success. And Big Business interests would balk and kick their heels screaming at the idea of their profits being lowered to what is, in essence, a tax on the banking system to support the overall economy.

Does Congress have the cajones to pull this off? Does the President have the brains to see how this would work, on more than one level?