> On Feb 17, 2016, at 11:32 AM, raghu <[email protected]> wrote: > > On Wed, Feb 17, 2016 at 12:04 PM, Marv Gandall <[email protected] > <mailto:[email protected]>> wrote: > The central issue is not the size of the overweight financial industry, but > that it needs to be nationalized, rationalized, and reoriented to serve > public needs rather than private interests. Despite their being conditioned > to regard public ownership in the abstract as anathema, I’m convinced that > most Americans would rally to the takeover of the unpopular financial, > pharmaceutical, and energy industries were any US politician improbably bold > enough to propose these as solutions. > > > Hi Marvin, > The question of nationalization is more interesting and complicated than you > suggest. After all Henry Paulson's Treasury had no qualms about nationalizing > Fannie and Freddie when they ran into trouble. So it is not as if the idea is > politically impossible or anything like that. > > Why were Lehman Brothers, AIG and the other major Wall St firms treated > differently than Fannie and Freddie? Certainly the legal status of FNMA was > somewhat different than than of Lehman, but I don't think that is the whole > story. > > I think the real answer to why Lehman and others were not nationalized has to > do with the fact that many of the activities of these entities were purely > speculative and have no public utility whatsoever. > > If this is true, then what we really need is a good portion of Wall St to be > shut down, not nationalized.
The kind of nationalization I’m thinking of is not a) the temporary takeover, reorganization, and recapitalization of failed banks at taxpayer expense and their return to the private sector at bargain basement prices nor b) the conversion of publicly-owned enterprises to profit-making entities with shareholder participation and so-called Special Operating Agencies (SOE’s) whose survival depends on their performance in competitive capitalist markets rather than government funding. As you know, this is another feature of the neoliberal turn, including in China. I have in mind the original socialist conception of public ownership whose primary purpose is service to the public rather than competition with low-wage private corporations whose operations are restricted to profitable sectors. Fanny and Freddy and the conversion of post offices and other public utilities into profit-seeking enterprises fall into this category. I certainly agree about the investment houses and insurers which have no public utility and which could be shut down. I’m still not persuaded that the American people, given a lead, would not support targeted nationalization of the polluting energy sector, the price-gouging pharmaceutical sector, and the loan-sharking financial sector. The most radical proposals for regulation coming from Sanders and others are equally perceived as unrealistic given the power of these lobbies. There are no easy answers because of the power imbalance which has greatly widened between the classes in the past three or four decades.
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