Wednesday, February 18, 2009

Nationalizing The US Banking System

Well - it was just a matter of time before this brilliant idea emerged.
Sounds to me like they are boiling the frog.
"The American people will never knowingly adopt Socialism. But under the name of 'liberalism' they will adopt every fragment of the Socialist program, until one day America will be a Socialist nation, without knowing how it happened."

- Norman Mattoon Thomas (1884—1968), leading 1928 American socialist, pacifist, and six-time presidential candidate for the Socialist Party of America

Backed by Obama and apparently GOP leaders too, it looks like we are headed for a Swedish style banking system:
Barack Obama, the president, who has tried to avoid panicking lawmakers and markets by entertaining the idea, has moved more towards what he calls the “Swedish model” – an approach backed strongly by Mr Graham. In the early 1990s Sweden nationalised its banking sector then auctioned banks having cleaned up balance sheets. “In limited circumstances the Swedish model makes sense for the US,” says Mr Graham.
What's amusing is how this administration already speaks out of both sides of its mouth:
The Obama administration remains opposed to federal control. Mr Geithner last week said: “Governments are terrible managers of bad assets.”

But Even Alan Greenspan has lost his laissez-faire mind.
The US government may have to nationalise some banks on a temporary basis to fix the financial system and restore the flow of credit, Alan Greenspan, the former Federal Reserve chairman, has told the Financial Times.

In an interview, Mr Greenspan, who for decades was regarded as the high priest of laisser-faire capitalism, said nationalisation could be the least bad option left for policymakers.

”It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring,” he said. “I understand that once in a hundred years this is what you do.”

We do NOT need more government to fix the mess that government got us into in the first place!

Look banks... just renegotiate the damn mortgages and let's get on with it already - no nationalization needed. Thank you.

In a related story: Homeowners are demanding that mortgage notes be produced.
Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage.