Who said this?
I would not be for nationalizing [the banks] … I don’t think government is good at making these decisions.
And what about this?
I’m very much afraid any program to salvage the banks is going to require the government … I would not take off [the table] the idea of nationalizing the banks.”
Would it surprise you, as it did me, that the first comment was made by a leading Senate Democrat and the second by a leading Senate Republican? WTF? Don’t believe me? Check it out — and then, buckle up … because this thrill ride, I suspect, is just beginning.
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For some history on what happened in Japan in the 1990’s:
- “In Japan’s Stagnant Decade, Cautionary Tales for America,” New York Times, Feb. 12
For both sides of the debate over nationalizing banks, I recommend the following (h/t Sullivan) …
- “The Limits of History,” New Yorker, Feb. 13 — James Surowiecki questions nationalization
“Nationalize the Banks! We’re all Swedes Now,” Washington Post, Feb. 15 — Matthew Richardson and Nouriel Roubini favor nationalization
And finally, for a peak into Obama’s mind on the matter (h/t Sullivan, again) …
Obama refused to close the door on a broad range of possibilities. One of his interviewers asked him to compare his approach to the responses to earlier banking crises in Japan — which faced an economic “lost decade” after failing to intervene forcefully enough — and Sweden, which temporarily nationalized its failed banks before selling them off. Obama said the administration was trying to find the “sweet spot” between those alternatives. Japan offered no model, he said, because “they sort of papered things over and never really bit the bullet.” And while many on the left are urging Obama to follow Sweden’s example, he thinks the scale of the U.S. problem argues against that course. “You can make a good argument for the Swedish model except for this fact: They only had a handful of banks; we’ve got thousands of banks,” he said. “The scale, the magnitude, of what we’re dealing with is much bigger.”
Strikingly, the president would not rule out more direct government intervention if his initial approaches fail. “What you can say is I will not allow our financial system to collapse,” he said forcefully when asked if he was excluding a Swedish-style solution. “And we are going to do whatever is required to get credit flowing again so that companies and consumers can do their business and we can get this economy back on track.”