Bank Nationalization Now!
Mike Pettis reviews bank crisis literature: Quick Nationalization, and then reprivatization of the “good banks” left over. Basically, you want to nationalize early, and then reprivatize the good banks early. Avoiding nationalization, like Mexico or Japan, leads to a nightmare. Please, no more “bad bank” schemes…. if a bank is on the border, punish the shareholders (who have the responsibility, not just the right, to vote for good management) and lenders who were irresponsible. The lenders and stockholders, by and large, had the means to know what was going on and did nothing. U.S. taxpayers should, under no circumstances, help them. If the stockholders were old widows, well, that’s why we have Social Security, and if that’s not enough, we should increase Social Security before we bail out greedy bank investors that didn’t exercise their responsibility to reign in management.
Get it over with. Nationalize Bank of America and Citigroup now, and sell off the good assets later. It’s a far better deal for taxpayers than any “bad bank” plan.
