Friday, March 27, 2009
I had assumed that virtually all conservatives were opposed to bank nationalization.
But Paul Craig Roberts, whose conservative credentials are pretty impeccable - former Assistant Secretary of the Treasury under President Reagan, former editor of the Wall Street Journal, listed by Who's Who in America as one of the 1,000 most influential political thinkers in the world, PhD economist - is calling for nationalization of both the banks and the Fed.
Roberts writes today:
Would it be cheaper for government to buy the shares of the banks and AIG at the current low prices than to pour trillions of taxpayers’ dollars into them in an effort to drive up private share prices with public money? The Bush/Paulson bailout plan of approximately $800 billion has been followed a few months later by the Obama/Geithner stimulus-bailout plan of another approximately $800 billion. Together it adds to $1.6 trillion in new Treasury debt, much of which might have to be monetized.Many liberal economists, as well as Alan Greenspan, free market advocate Marc Faber, and many others have previously called for bank nationalization.
Could this massive debt issue be avoided if the government took over the banks and netted out the losses between the constituent parts? A staid socialized financial sector run by civil servants is preferable to the gambling casino of greed-driven, innovative, unregulated capitalism operated by banksters who have caused crisis throughout the world.
Perhaps the Federal Reserve should be socialized as well. The notion of an independent, privately-owned Federal Reserve system was never more than a ruse to get a national bank into place. Once the central bank is part of the state-owned banking system, the government can create money without having to accumulate a massive public debt that saddles taxpayers’ and future budgets with hundreds of billions of dollars in annual interest payments.
Congressman Dennis Kucinich is also calling for the Fed to be nationalized.