David E. Sanger: Nationalization Gets a New, Serious Look

[babylonsister]

Nationalization Gets a New, Serious Look

by David E. Sanger


WASHINGTON - Only five days into the Obama presidency, members of the new administration and Democratic leaders in Congress are already dancing around one of the most politically delicate questions about the financial bailout: Is the president prepared to nationalize a huge swath of the nation's banking system?

Privately, most members of the Obama economic team concede that the rapid deterioration of the country's biggest banks, notably Bank of America and Citigroup, is bound to require far larger investments of taxpayer money, atop the more than $300 billion of taxpayer money already poured into those two financial institutions and hundreds of others.

But if hundreds of billions of dollars of new investment is needed to shore up those banks, and perhaps their competitors, what do taxpayers get in return? And how do the risks escalate as government's role expands from a few bailouts to control over a vast portion of the financial sector of the world's largest economy?

The Obama administration is making only glancing references to those questions. In an interview Sunday on "This Week" on ABC, the House speaker, Nancy Pelosi, alluded to internal debate when she was asked whether nationalization, or partial nationalization, of the largest banks was a good idea.

"Well, whatever you want to call it," said Ms. Pelosi, Democrat of California. "If we are strengthening them, then the American people should get some of the upside of that strengthening. Some people call that nationalization.

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http://www.commondreams.org/headline/2009/01/26-2

[DJ13]

1. Kerry was on CNBC this AM trying to dismiss nationalizing banks

I would hope they dont try to protect the bankers at the expense of fixing this as fast as possible, but thats precisely the impression Kerry gave me.