Nationalize the banks!
No, this is not the rallying cry of a new populist or socialist movement in the U.S. It is now the slogan of some Nobel prize-winning economists and respectable financiers. Even Alan Greenspan, anointed the “high priest of laissez-faire capitalism” by the Financial Times, has conceded the need for temporary government ownership of the nation’s largest banks.
How far and fast we’ve traveled. Until just a few months ago, the belief that the government should not own any significant portion of the financial system was akin to a religious conviction in the U.S., even among liberals. There was only one god, the Market, and an entire priesthood, including members of some of our most important institutions — the media, the universities, and our government itself — preached its virtues and commanded us to obey.
This hitherto unassailable doctrine has suddenly become vulnerable as the Market turns against us with the kind of fury normally reserved for vengeful deities and forces of nature. Proposing nationalization, heresy earlier, is now commonplace. (1) Indeed the government has already been acquiring substantial equity in some of the nation’s largest financial institutions, though it refuses to ask for real power over them in return. (2)
My aim here is not to address the details of the nationalization debate. Rather, I want to use the crisis in our financial system to pose a fundamental question about our political system. Link to article
