Get ready for nationalization of the largest banks in America, because it is coming. Reluctantly, because the economists and financial pros around Obama really don't want to do it, but there really won't be any other choice if we are to make it through this crisis.
“The case for full nationalization is far stronger now than it was a few months ago,” said Adam S. Posen, the deputy director of the Peterson Institute for International Economics. “If you don’t own the majority, you don’t get to fire the management, to wipe out the shareholders, to declare that you are just going to take the losses and start over. It’s the mistake the Japanese made in the ’90s.”
“I would guess that sometime in the next few weeks, President Obama and Tim Geithner....will have to come out and say, ‘It’s much worse than we thought,’ and just bite the bullet.”
Well, think of it this way. The single largest employer in the world may well be the U.S. military, which is 100% nationalized, and it doesn't do so bad.
Anyone for privatizing the military, raise your hand. If not, then shut up about the banks. Or here is a final suggestion: why don't we just shrink both of them?