Monday, January 19, 2009

Too Much Agreement Kills a Chat

It's nice to see some of the bigwigs coming around to a position I advocated months ago - and that was thoroughly debated in the comments at Calculated Risk by about September 21.

Hopefully the concept will filter through the bureaucracy to this Obama guy I keep hearing about.

Update: Note that nationalization, as used by everyone prominent that I have read, does not mean permanent state ownership of all banks. It means forcing all banks to revalue their assets according to certain accounting rules and then seizing any bank that is insolvent. A bank is insolvent when its balance sheet is unbalanced, not because it cannot meet current cashflow requirements. Only cranks in the comments are insisting on permanently nationalizing all banks, usually along with the Federal Reserve. Everyone else has enough sense to say that any government-controlled banks should be unloaded at the first opportune point in the business cycle. The country has been through this (on a much smaller scale) during the S&L crisis in the late 1980s, so clearly it can be done without endangering our capitalist economy.

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