Minniebakker’s Weblog

Nationalization

Posted in Uncategorized by minniebakker on March 24, 2009

Krugman: Banking on the Brink, Feb-22-09.  “… What Alan Greenspan, the former Federal Reserve chairman — and a staunch defender of free markets — actually said was, ‘It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring.’ I agree.” …
     ” … long-term government ownership isn’t the goal: like the small banks seized by the F.D.I.C. every week, major banks would be returned to private control as soon as possible. The finance blog Calculated Risk suggests that instead of calling the process nationalization, we should call it “preprivatization.” The Obama administration … believes “that a privately held banking system is the correct way to go.” So do we all. But what we have now isn’t private enterprise, it’s lemon socialism: banks get the upside but taxpayers bear the risks. And it’s perpetuating zombie banks, blocking economic recovery. What we want is a system in which banks own the downs as well as the ups. And the road to that system runs through nationalization.

Baseline Scenario posts on nationalizationResponse to reader questions.

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