>The poor need the rich to start a company as banks are prevented (by the rich) from lending to them.
replyno. the banks hold the poor's money, and it needs to do so without risk because the poor need their money. lending money to start companies that are completly unsecured is too risky for banks, they lend money to buy houses which is secured debt.
Banks lend against homes as the state guarantees the housing market is too big to fail and will bail them out.
replyBanks often lend at low LTV ratios because the prices are inflated so people on normal salaries can't actually afford to put down a large deposit, which means a slight drop puts them into negative equity but the banks are not concerned as they are protected.
If the state chose to underwrite startups in the same way...