Friday, February 20, 2009
Obama previously said that he won't nationalize the banks, because that is contrary to American values.
But I am convinced that nationalization will happen.
Because leading liberal economists are calling for it.
And Alan Greenspan is calling for nationalization.
And Citigroup is pleading for nationalization.
And Senate banking committee chair Christopher Dodd as well as John McCain and other politicians are now calling for it.
Even free market advocate Marc Faber is saying that nationalization is a solution to the banking crisis.
Some experts are saying that nationalization is already a done deal:
Indeed, some people argue that the banks are already quietly being nationalized. See, for example, this and this.
"If you look at Japan, if you look at Sweden, if you look at the S&L crisis in the U.S., it's clear what's going to happen," said Pete Kyle, who holds a chair in finance at the University of Maryland. "What's going to happen is the bad assets are going to be removed from the banks, the government is going to wind up owning the assets and winding them down. The government will take its losses and, over time, maybe 10 or 15 years, we'll figure out how much money we've lost."The banks also need new capital, maybe $1 trillion to $2 trillion more. "The only issue is how fast it's going to occur," Kyle said.
Update: Even Obama's White House press secretary doesn't sound so sure that Obama won't nationalize.