Bank Nationalization
The 2008 winner of the Nobel Prize in Economics was Paul Robin Krugman. He is He is a professor of economics and international affairs at Princeton University, a centenary professor at the London School of Economics, and an op-ed columnist for The New York Times.
He quotes Alan Greenspan, the former Federal Reserve chairman, and certainly a big defender of free markets as saying, “It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring.”
Paul Krugman agrees with Greenspan, and so do I.
The great depression of 1929 resulted in several vital reforms in America. Most important were Social Security and the various things insuring that the banks did not fail, like FDIC insurance and proper regulation. FDR tried to get universal health care implemented, but he failed at this part.
To keep the country and the world functioning on a half-way even basis it is vital that the banks function properly. During the last 7 or 8 years all the deregulation fever meant that the bankers could pretty much do anything they wanted. And they did. The result is that the people of the United States have had to pump many billions of dollars into propping up the banks. But this hasn’t yet been sufficient. If we are going to give the corrupt or stupid bankers all this money, then we should have an equal amount of say over how they do their business in the future. In a capitalist economy this means that we will need to take over 51% ownership and voting rights.
Governments and government bureaucrats have traditionally done a fairly poor job of sensibly spending money. But not anywhere nearly as bad as these Republican MBAs that have been running the banks and Wall Street.
In five or ten years this government ownership of the banks can gradually end, but it is going to take at least that long to get their house in order. My guess is that there has been plenty of corruption going on. In the name of “free markets” there has been widespread theft of the shareholders money taking place. Some of these bankers will no doubt be going to jail.
LINK: http://www.nytimes.com/2009/02/23/opinion/23krugman.html?_r=1&em
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