According to an article by the Financial Times, Alan Greenspan has converted to the dark side of those promoting nationalization of private assets, specifically banks. The article quotes Greenspan as saying “The US government may have to nationalize some banks on a temporary basis to fix the financial system and restore the flow of credit.” This coming from the former 19-year Chairman of the Federal Reserve and the man viewed by many as the champion of laissez faire capitalism. The ship is definitely sinking.
Both republicans and democrats seem to be waving flags of surrender and going for the idea of nationalization in droves. According to Republican Lindsey Graham, “We cannot keep pouring good money after bad. If nationalization works, then we should do it.” Ouch.
According to Greenspan, government ownership in the banks would allow the transfer of toxic assets to a bad bank without the problem of how to price them.
Greenspan’s comments came as President Obama signed into law the $787 billion stimulus package and announced another $50 billion in spending for home foreclosure relief.
Regardless of what happens as a result of all the recovery efforts, it’s pretty clear that this will be the defining period of Obama’s presidency.
Popularity: 8% [?]
2 responses so far ↓
1 Abbe Waldman // Feb 19, 2009 at 11:01 am
What has become of our country? There are many solutions to be looked at. Instead of giving the public paltry credits, why isn’t the government allowing qualified citizens who prove they lost their job, have no cash reserves nor assets, to pay down their mortgages and debt in a significant fashion far beyond what the GSE bailout will pay. Secondly, if you shut down the federal reserve which is really a privately owned bank you eliminate massive interest payments that keep us in a perpetual deficit hole we can never dig out of.
2 Daphne Lacey // Mar 19, 2009 at 7:37 pm
I agree with Abbe…there are other ways to solve the problems we are experiencing now.
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