Nationalize this! Part II

All around the world discussion now includes the distinct possibility of the U.S. nationalizing its top banks. Alan Greenspan no less suggests, “it may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring.” And it was probably Senate Banking Committee Chair, Christopher Dodd, who made us all stand up and take notice when he said, “I’m concerned that we may end up having to do that, at least for a short time.” The Wall Street Journal even gave their coveted prime position on their Opinion page to an interview with Nouriel Roubini, the famed Dr. Doom of NYU’s Stern Business School, explaining the inevitability of a Swedish style takeover within six months.

Gosh knows we need new management of our big banks. The vast majority of the American public seems to have lost confidence in the imperial bank executives, what with toxic assets, choked-up capital, inadequate reserves, plummeting share prices, remodeled bathrooms, and private jets. Government management, however temporary, will seem mild by comparison.

And now we hear that the Obama administration fears the bankers might reject the bailout money because of the $1/2 million cap on executive compensation! Will they not stand up for what this nation needs rather than their own personal gain? If the financial system collapses, then how could it possibly be in the best interests of their company, their stockholders, or their customers? Let’s stop this game of moral hazard with the bankers, throwing good money after bad.

So, ask yourself, would you bank with the government? Do you have confidence in this country’s ability to pull itself together and climb out of this mess? I do. I own treasury bonds. I do so, not because I feel I will get hugely wealthy but rather because they pay a comfortable return with a sense of security and national benefit. I like the sense of collective rescue instead of a culture of fawning obsequiousness and dependence upon unaccountable, unresponsive mega-bank CEO’s.

We’re all in the together, so let’s band together to fix it. As I’ve said before, it’s not like we’re going to stop saving and lending. Go get your money and put it where you think it will do the most good. That’s right – go down to Bank of America, Citibank, Wells Fargo, and First Interstate Bank and ask for your money. Tell them you don’t think they are managing this country’s financial system appropriately. You might then put your money in a local credit union or a community bank or in treasury bonds. (All of which are paying quite reasonable returns, I might add.) Because if we don’t take charge, then the government will be left with no choice.