This is a question for Fred and or others; you said the other day that, "I think a convincing case can be made for permanent nationalization." I know Joseph Stiglitz has mentioned that temporary nationalization of the banks would allow the banks to operate in the national interests. What is the most convincing case that can be made for permanently nationalizing the banks?
Bill Leumer for the Workers Emergency Recovery Campaign <www.wercampaign.org> In a message dated 4/26/09 12:00:26 PM, [email protected] writes: > > Message: 3 > Date: Sun, 26 Apr 2009 11:09:14 -0400 > From: [email protected] > Subject: Re: [Pen-l] nationalize the banks, eh? > To: [email protected] > Message-ID: <[email protected]> > Content-Type: text/plain; charset=ISO-8859-1; format="flowed" > > Quoting Doug Henwood <[email protected]>: > > > Just posted the text of my talk at yesterday's Left Forum panel, > > "Nationalize the banks! What would that mean exactly?" > > > > <http://doughenwood.wordpress.com/2009/04/20/nationalize-the-banks/> > > > A few replies to Doug: > > 1. Doug asks: ?where is the outrage?? > > I would say that there is lots of public outrage out there ? it is all > over the press ? outrage against the government bailout of banks. So > great is the outrage that it is widely perceived that it would be > impossible at the present time for Congress to vote more money for bank > bailouts. > > The public seems to want a solution to the banking crisis, without > having to bail out the banks. And nationalization, with debt-equity > swaps, as I and others have described, is the best way to accomplish > both of these objectives. > > It does not seem to me to be a very large step for the public to take ? > from outrage against the bank bailouts to support for the > nationalization of banks, as the best and most equitable solution to > the banking crisis. It is at least a step that we should be strongly > advocating, in order to make it more possible. > > > 2. Doug also states: ?Nationalizing the banks ? means attacking that > class relation at its core. It would be insane, at our present level of > political development, to talk in those terms.? > > Yes, the control of finance is the core of capitalist power, but at the > moment it is also the WEAKEST LINK of capitalist power. The large > capitalist banks are technically insolvent, and would be actually > bankrupt without government aid. That is why a bailout is necessary ? > from their point of view. Something has to be done about the banks ? > this weak link is about to break. > > And if a government bailout of the banks is unacceptable to the public, > then we will have to look for other ways to make the banks solvent > again. Nationalization with swaps is the best and most equitable way > to do this. > > Nationalization with swaps would also lay the foundation for a more > stable banking system in the future. If we bailout the banks and > their bondholders this time, they will take continue to take risks in > the future, and we will have to bail them out again in the future. In > other words, nationalization would solve the ?moral hazard? problem. > > Again, it does not seem to me to be that large step for the public to > take ? from outrage against the bank bailouts to support for the > nationalization of banks as the best solution to the banking crisis. > > > 3. I agree with Doug that we need more ORGANIZED outrage ? large > demonstrations, etc. A first step toward organized outrage is to try > to educate the public as best we can, every chance we get, about this > very feasible and equitable solution to the banking crisis. Especially > when the Obama administration goes back to Congress and asks for more > money to bail out the banks. > > > Fred > > > P.S. The NY Times editorial today comes close to what I am talking about: > > "The banks? current executives would be fired, shareholders would be > wiped out and bondholders would take a haircut. But that is the best > way to ensure that the banks? finances are quickly and efficiently > restructured, and the taxpayers? investment is protected." > (http://www.nytimes.com/2009/04/26/opinion/26sun1.html) > > The main difference is that the Times is talking about TEMPORARY > nationalization, and I think a convincing case can be made for > permanent nationalization. Another difference might be how big a > haircut the bondholders would have to take. > > > > > > ---------------------------------------------------------------- > This message was sent using IMP, the Internet Messaging Program. > > > > ************** A Good Credit Score is 700 or Above. See yours in just 2 easy steps! (http://pr.atwola.com/promoclk/100126575x1220572846x1201387511/aol?redir=http://www.freecreditreport.com/pm/default.aspx?sc=668072&hmpgID=62& bcd=Aprilfooter427NO62)
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