Nationalizing U.S. banks?

When the Treasury Secretary announced the new plan this morning, he made it clear he was holding his nose as he did so. Yet he noted the alternative of leaving businesses and consumers without access to financing is unacceptable. This analyst says today’s move is actually a tried and true remedy, even though it may seem shocking. More importantly he says this is the standard thing to do with banks during a financial crisis because banks with no money tend to make bad loans and the way to get out of that is through capital infusion provided by the government. The Bush administration may still be key to minimize the perception of a government takeover of banks, says this analyst. The first analyst says Americans have come up with a number of euphemisms for nationalizing when it happens here. Economists and historians say this amounts to cultural aversion, that Americans don’t like the idea of government anything interfering with private enterprise. This can be traced back to the early days of the country, as America was made up of an assortment of colonies that became relatively independent states distrustful of federal government. The notion of small government is something of a myth, the analyst points out�and many have noted the irony of what’s happening now with a conservative government takes moves similar to the New Deal. Whatever it’s called, it seems to be today’s version of the last best chance to save the world from the financial crisis.