Monday, February 02, 2009

If They Can't Survive, Nationalize

I haven't written much about the possible-maybe plans for a "bad bank"--you know, using a gazillion taxpayer dollars to bail out the banks and getting nothing at all in return for the taxpayers--because I find the whole thing so depressing.

Here the LA Times and Paul Krugman state the obvious.

If that's the direction in which Barack Obama is heading, it means that we'll be getting more of the same from the Treasury Department under Tim Geithner: the same catering to the big banks that afflicted the Treasury under John Paulson and the New York Fed under... Tim Geithner.

I shrugged when Obama attacked Wall Street bonuses last week. As Krugman put it: "Question: what happens if you lose vast amounts of other people’s money? Answer: you get a big gift from the federal government — but the president says some very harsh things about you before forking over the cash."

There's a simple solution to the banks' toxic waste. Not jawboning but filleting. This needs to be read with a kind of Jesse Jackson cadence:

If they can't survive, nationalize.

© 2009 Gary Weiss. All rights reserved.

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