[email protected] wrote:
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>
With the retail sector assuming 100% of economy-wide disbursed expenses
as its operating costs, whatever debt servicing fees are charged by
financial institutions has to closely match the direct spending of those
obtaining their income (directly or indirectly) from those institutions,
otherwise retailers cannot possibly obtain the necessary returns to stay
in business. A mismatch in banking fees would thus be a leading cause of
systemic defaults and irredeemable debt creation. Or in other words, it
is the source of fictitious capital.
I seem to recall having read somewhere that the av. debt servicing cost
in N.A. (mortgages, credit cards, etc.) is around 50% of personal
income. This would mean that financial institutions absorb income (i.e.
living standard enhancement) way beyond a possible counterbalance by
rentiers and those employed in the FIRE sector. Given the general
acquiescence with those fees though, it seems to me that public bank
income should be able to make taxation, for the great majority, a thing
of the past. But which ever way the government decides to obtain income
for its running expenses, current financial sector practices are clearly
detrimental to economic health. Is this depiction convincing enough to
have made a case for permanently nationalizing banks?
John V
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