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Bank Nationalization


Subdude

  

30 members have voted

  1. 1. Should the bigger banks be nationalized?

    • Yes, now!
      11
    • No, never!
      13
    • Wait a bit and decide later
      3
    • Don't know/no opinion
      3


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If you would have phrased the poll question as "Should taxpayers get bank stock for their bailout money?" you would get a FAR different poll result.

^_^ Fair point. But a lot of the discussion is also about what kind of bank stock (preferred or equity), and how much (controlling stakes or not).

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^_^ Fair point. But a lot of the discussion is also about what kind of bank stock (preferred or equity), and how much (controlling stakes or not).

True, but the term "nationalization" triggers knee jerk reactions in some people who fear a socialist government, yet many of those same people would demand that the government get something for their loan money, not realizing that this is the definition of nationalization (at least the definition that we are using here).

Of course, by pointing it out, we may have diluted the effect. :)

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True, but the term "nationalization" triggers knee jerk reactions in some people who fear a socialist government, yet many of those same people would demand that the government get something for their loan money, not realizing that this is the definition of nationalization (at least the definition that we are using here).

Of course, by pointing it out, we may have diluted the effect. :)

Again, you're absolutely right that "nationalization" can be a loaded term, but that is the word that is used in press reports about it, so we may as well lay it out that way. Myself, I would much rather go with loaded but honest words like "nationalization" than vaguely comforting euphemisms such as "conservatorship" (cf Fannie, Freddie and AIG). But your question is just as valid:

"Should taxpayers get (common/preferred) bank stock for their bailout money?

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The question of the week obviously. Should Citi, Bank of America and the like be nationalized? If not, how should they be supported?

I want to see an overarching fiscal policy package, and I want to have seen it in January. Struggling firms can't plan on an uncertain future.

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I want to see an overarching fiscal policy package, and I want to have seen it in January. Struggling firms can't plan on an uncertain future.

That's not one of the choices. It's either nationalize or the gov't. receives stock for its investment in the banks. Pick one. Don't be wishy washy.

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That's not one of the choices. It's either nationalize or the gov't. receives stock for its investment in the banks. Pick one. Don't be wishy washy.

No deal. I want a comprehensive plan within the context of which I can meaningfully evaluate potential future outcomes before we continue on a path of piecemeal intervention.

And if there's anything worse for business than general pessimism, it is uncertainty. We need to get people investing again, and right now they're just sitting on the fence because they know better than to think they know what's happening with the economy or the government. As someone evaluating policy, I'm in the same boat. You wouldn't want a physician prescribing you medication without asking what other medications you'll be taking, and you shouldn't want an economist telling to the end-all-be-all solution if that person doesn't know what else is going to be undertaken concurrently.

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Too late. Citi has already effectively asked to be nationalized with the stock conversion bid that came out in the papers yesterday. It will happen, at this point it's a matter of to what degree, and semantics. It's time for the government to show some balls, seize what assets are left, and refuse to keep losing ROI from the TARP. all indications now are that BOA and Citi are only going to continue to lose value. Private business would refuse to keep throwing money away in this situation, why shouldn't the Fed?

This is why I opposed all of the 'bailouts.' None of them have worked, and it was the equivalent of setting billions of dollars of taxpayer money on fire. The banks, the auto manufacturers, all are worse off now than they were in Q4.

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True, but the term "nationalization" triggers knee jerk reactions in some people who fear a socialist government, yet many of those same people would demand that the government get something for their loan money, not realizing that this is the definition of nationalization (at least the definition that we are using here).

Of course, by pointing it out, we may have diluted the effect. :)

Call it what you want but how will nationalizing our banks make us any different from the socialist European governments?

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Call it what you want but how will nationalizing our banks make us any different from the socialist European governments? Like it or not, letting poorly managed banks and companies fail on their own is part of capitalism.

That sounds good, but where will capitalists get capital without banks?

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Red, how would we consider who gets stock, and in what amounts ? Would it be a percentage based on your tax bracket. Would those who don't even pay taxes get a share, just like they get a share of the tax breaks now ?

I am agreeing with you that we should get something in return, but how to go about doing it is my question.

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Too late. Citi has already effectively asked to be nationalized with the stock conversion bid that came out in the papers yesterday. It will happen, at this point it's a matter of to what degree, and semantics. It's time for the government to show some balls, seize what assets are left, and refuse to keep losing ROI from the TARP. all indications now are that BOA and Citi are only going to continue to lose value.

What's getting tossed around is that the government would take 40% of Citi common, meaning it would still not have full control.

Call it what you want but how will nationalizing our banks make us any different from the socialist European governments? Like it or not, letting poorly managed banks and companies fail on their own is part of capitalism.

I'm afraid that train left the station after the bank panic last autumn. Nobody wants a repeat of that, and there is general recognition that banks aren't like other businesses that can be let fail without damaging the economy. The question at this point isn't whether the banks will be bailed out, just the form the bailout should take. For whatever reason we've let ourselves be saddled with a set of too-big-to-fail banks.

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Too late. Citi has already effectively asked to be nationalized with the stock conversion bid that came out in the papers yesterday. It will happen, at this point it's a matter of to what degree, and semantics. It's time for the government to show some balls, seize what assets are left, and refuse to keep losing ROI from the TARP. all indications now are that BOA and Citi are only going to continue to lose value. Private business would refuse to keep throwing money away in this situation, why shouldn't the Fed?

This is why I opposed all of the 'bailouts.' None of them have worked, and it was the equivalent of setting billions of dollars of taxpayer money on fire. The banks, the auto manufacturers, all are worse off now than they were in Q4.

Neither the Fed or the federal government are private businesses, nor should they be run as such. The economic damage is already done, and regardless of who controls what, society is going to pay for it. You can't get around that. The worst possible outcome is to allow banks to fail, but it is not clear to me at this time whether an unconditional bailout, a conditional bailout, or nationalization is preferable, or how that might affect or be affected by a fiscal strategy which is still completely unknown.

I'm afraid that train left the station after the bank panic last autumn. Nobody wants a repeat of that, and there is general recognition that banks aren't like other businesses that can be let fail without damaging the economy.

I'm not so sure that's true. There are political forces at work that might use this as a justification to nationalize auto manufacturers. It could be a slippery slope.

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I'm not so sure that's true. There are political forces at work that might use this as a justification to nationalize auto manufacturers. It could be a slippery slope.

That doesn't follow, does it? Yes, there may be knock on effects w.r.t. the auto manufacturers, but that doesn't mean that there isn't a broad level of agreement that the banking system needs to be saved.

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That doesn't follow, does it? Yes, there may be knock on effects w.r.t. the auto manufacturers, but that doesn't mean that there isn't a broad level of agreement that the banking system needs to be saved.

There is broad agreement that the banking system needs to be saved. What is not clear to me is that such agreement is exclusive to the banking system.

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Nationalization is happening now, whether we like it or not.

AIG. 80% govt owned. And needs more money.

Citi. 45 billion. And now wants the govt to buy up to 40% of common stock... before this "stress test"... hmmm... sure do find that strange.

At the end of the day, the US govt will own 100% of both... and they will still both implode.

The CDS market will ultimately doom AIG.

So long AIG and Citi! Nice knowing you!

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Neither the Fed or the federal government are private businesses, nor should they be run as such.

That's a matter of debate. But facts are the government and the Fed are currently the only entities with the ability and willingness to raise capital and buy assets, and are therefore the only viable near-term solution for bank stabilization.

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That's a matter of debate. But facts are the government and the Fed are currently the only entities with the ability and willingness to raise capital and buy assets, and are therefore the only viable near-term solution for bank stabilization.

No, I don't believe it is debatable. Government should behave differently from private businesses and with different aims. Not only would government duplication of private sector endeavors just act to crowd out the market, but because government is not set up to have a decent system of accountability where minutia is concerned and is rife with labor unions, government tends to be less efficient.

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No, I don't believe it is debatable. Government should behave differently from private businesses and with different aims. Not only would government duplication of private sector endeavors just act to crowd out the market, but because government is not set up to have a decent system of accountability where minutia is concerned and is rife with labor unions, government tends to be less efficient.

OK, let's say it's not debatable. But do you disagree that the federal government is the only entity currently willing and able to raise capital or buy assets in the amounts necessary to stabilize the credit market? In other words, do what banks do?

The government is uniquely qualified for the task, since it controls the money supply (in the strict fiat currency sense) --and if I'm not mistaken you've been a proponent of inflationary policy as a tool to get out of this mess. Govt prints more money, takes over a bunch more assets at fire sale prices, and pushes out the writedown until the 'free market' pulls its head out of its ass and can start buying things back.

In any event, I'm more interested in you new signature? Old man??

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OK, let's say it's not debatable. But do you disagree that the federal government is the only entity currently willing and able to raise capital or buy assets in the amounts necessary to stabilize the credit market? In other words, do what banks do?

The government is uniquely qualified for the task, since it controls the money supply (in the strict fiat currency sense) --and if I'm not mistaken you've been a proponent of inflationary policy as a tool to get out of this mess. Govt prints more money, takes over a bunch more assets at fire sale prices, and pushes out the writedown until the 'free market' pulls its head out of its ass and can start buying things back.

That much is accurate. But the very fact that the government can control the money supply is an indication of why it needs to be run differently than a private firm. A private firm would just print money continuously because it can.

In any event, I'm more interested in you new signature? Old man??

My signatures always get comments. Either I'm doing them very well or I'm doing them very poorly. ...probably the latter.

It came to me on Saturday night when I was watching George Carlin's last HBO set. He was drawing differentiation between old men, old farts, and old ____s like himself. I was the old man.

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I'm fascinated with how the idea of bank nationalizaiton has to be ignored, deflected, and outright lied about (Ben Bernanke lied, just flat out lied, and the stock market went up a couple hundred points) all because Americans get the heebie-jeebies at the mention of the word.

The nationalization genie is already out of the bottle. This guy on Bloomberg explains it a lot better than I could:

http://www.bloomberg.com/apps/news?pid=206...id=axsmjkDYWDsg

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Every day this mess just gets uglier and uglier.

It's sad a day for those that have done the right thing, made the payments, saved and scrimped and never asked for anything.. Pure and simple.

And that's the whole problem with these bailouts. Those of us that have worked hard to get where we are and stay out of trouble will be the ones paying for all this in the long run. There is no accountability left in this nation.

Government running banks? What has the government ever done right when they got their hands on something?

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Government running banks? What has the government ever done right when they got their hands on something?

Is that a serious question? Our government has done a lot of things right. The best instances involve public safety, like the regulation of food & drugs, building codes, environment, etc. Things that private interests could have profited from at public expense. Government control of the banking system is yet another example of that sort of safety. We're in this mess because greed found local maxima for a few individuals at the expense of millions of other citizens. We invented government to guard against that. Why not use it?

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Government running banks? What has the government ever done right when they got their hands on something?

What has the current non-government bank management done for banks? They're running the banks... right into the ground. And in the process, destroying America's retirement savings. Please!

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