New Poll Reveals 56 Percent Of Americans Favor Bank Nationalization

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"New Poll Reveals 56 Percent Of Americans Favor Bank Nationalization"

geithner.jpgA new Newsweek poll finds that 72 percent of Americans have a favorable opinion of President Obama, 58 percent approve of the job he is doing, and 65 percent are very or somewhat confident that he will be successful in turning the economy around.

The poll also contains the interesting and “somewhat surprising” finding that a majority of the American public supports nationalizing the banks:

11. Temporary nationalization is another way for the federal government to deal with large banks in danger of failing. This is where the government takes over a failing bank, cleans its balance sheets, and then quickly sells it off. In general, which do YOU think is the better way to deal with failing banks…

29 Government financial aid WITHOUT any government control of the bank, OR
56 Nationalization, where the government takes temporary control?
11 Neither/Other (VOL.)
4 (DO NOT READ) Don’t know

It appears that the Obama administration has thus far resisted nationalizing the banks because it views that option as not politically viable. Obama has argued “America’s different” than other countries which have embraced nationalization.

But, in addition to the American public, the noteworthy list of those who are advocating nationalization is bipartisan and growing. It includes Paul Krugman, Alan Greenspan, Nouriel Roubini, Lindsey Graham, James Baker, and now Thomas Hoenig. Hoenig is the Kansas City Fed President, and in remarks yesterday, he criticized the Treasury Department for moving forward with nationalization in a “piecemeal” rather than a comprehensive manner.

As Pat Garofalo explains on The Wonk Room, Treasury Secretary Tim Geithner’s “public-private investment” rescue plan appears to be operating on a faulty theory:

He seems to believe that the problem with the assets is not that they are actually relatively worthless, but that they have an “artificially depressed value” that will return as soon as a market for them is created. [...]

Geithner has posited that the toxic assets have a “basic inherent economic value” that is absent because of “the absence of financing and credit.” Unfortunately, today’s market valuations may reflect actual prices, which would throw a serious wrench into everything about the administration’s plan.

Matt Yglesias warns that the Geithner plan is more likely to fail “by being too cautious rather than overreaching.”

Update

In an interview with the New York Times, Obama said blogs aren’t a reliable source of information about the economic crisis:

Mr. Obama rode to the White House partly on his savvy use of new media, and he has a staff-written blog on his presidential Web site. Even so, he said he did not find blogs a reliable source of objective information, citing the economy as one example.

“Part of the reason we don’t spend a lot of time looking at blogs,” he said, “is because if you haven’t looked at it very carefully, then you may be under the impression that somehow there’s a clean answer one way or another — well, you just nationalize all the banks, or you just leave them alone and they’ll be fine.”

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