Wednesday, February 18, 2009

Alan Greenspan backs bank nationalization

For context, this is roughly equivalent to the Pope standing on the Vatican balcony on Palm Sunday, throwing the devil horns and shouting 'Hail Satan, bitches!'
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.”
On the subject of the stimulus package and bank nationalization, he sounds like Paul Krugman now. Alan Greenspan, Objectivist devotee of Ayn Rand and dedicated free market uber alles believer is so scared about the state of the economy he thinks the Democrat's $ 700 billion plus stimulus package plus the billions in the bank rescue plans probably aren't enough to save the world economy.

This is one of those things that should be scaring the hell out of you.


janfromthebruce said...

Why temporary???

Cliff said...

To be fair even Krugman is only calling for temporary and in Britain and Sweden the nationalization plans are ostensibly temporary.

There will be an increasing stake for the public in the banking sector all over the world in the next year, come a recovery that wave will peak and recede leaving behind a much more stringent regulatory regime. If we're very lucky and progressives win the future arguments on the subject, it will also leave behind a larger ongoing public sector presence in major lending.

But that's for when we're picking ourselves out of the wreckage of the oncoming tsunami that's currently just a black smudge on the horizon.

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