There are many reasons to feel joyous today. Not least among them: we have grabbed the reins of the economy back from the lunatics.
I have such high expectations for Obama. I know he is not a miracle worker--but frankly, we need a miracle worker anyway. Even as Obama was taking the oath of office, the financial industry was accelerating its meltdown.
We need to nationalize the banks. They are insolvent. They need to enter receivership, and have their assets marked appropriately by selling them in an orderly fashion. The pieces worth keeping should then be sold back into the private market. Wipe out the shareholders; wipe out the bondholders. It will be ugly, but not as ugly as insolvent banks continuing to destroy the rest of our otherwise-functional economy. We did it in the 80's with the S&L's. Sweden did it in the 90's with their entire banking system.
It's time, Mr. President. Do it now, before it's too late.
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Intriguing idea but I want to see a National Health Service FIRST.
ReplyDeleteThe idea of nationalizing banks isn't to keep the government running them. It's to force a real accounting of their balance sheets. Many, many banks are insolvent, but have various off-balance sheet "assets" and assets that aren't accurately priced so they haven't triggered FDIC/regulatory action. (It really is like a Ponzi scheme; they all owe each other money, no one can pay; that equals insolvency, but hidden unless all the books are looked at simultaneously.) The only way to fix it is declare a bank holiday, settle all the books, wipe out all the stake holders for the insolvent institutions, and sell the stuff that's still worth anything back in to the private market. (And naturally, fire--and hopefully jail--the bank executives who perpetuated fraud. They can start with Thain, the Merrill CEO who "quit" today.)
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