I’m still waiting to hear a real argument from the Obama administration rather than this:
[Geithner] discouraged speculation that the plan would include the nationalization of some banks.
“We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system,” he said.
Well, look, as of 12 months ago we had a financial system run by private shareholders, managed by private institutions, and functioning without massive taxpayer subsidies. I think we all wanted to do our best to preserve that system. But, you know, it didn’t work out. And once you kick the “functioning without massive taxpayer subsidies” leg out of the stool, then it’s less clear to me why privatizing the profits makes sense. Or, rather, I understand perfectly well why it makes sense—it makes sense because the people getting the subsidies want it that way. But unless there’s a serious alternative to having the government offer the massive subsidy, it seems to me that it makes a lot more sense to own the upside and have a formal say over what’s done with the subsidy.
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