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Stress-Testing Us!
So, before the government takes further steps to support the financial system, there will be a "stress test" to see how the biggest banks would do in an even weaker economy? I'll tell you who's being "stress tested." It's us.
If the banks need more, we're told, the government might have to act. But don't worry -- it won't be a government takeover. A takeover would be "surprising," the head of the Federal Deposit Insurance Corp told CBS this week.
It won't be a takeover, oh no, because a takeover would be bad. That's the drumbeat of the week.
Economist Paul Krugman makes the point that it's not entirely un-American to nationalize the banks. He's right. It's happened in the past. The bigger point is that even as the public -- and markets -- panic about nationalization via "takeover," our government has already actually nationalized much of banking. At least the risky part.
Taxpayers have already relieved banks of the risk of banking by recapitalizing the banks that squandered their capital and buying up or guaranteeing those banks' bad debts.
The "takeover" on the table now is the takeover of the profits part. That's the potential profit earned on taxpayer funds.
That's not scary socialism any more than privatizing profits while socializing risks is free market capitalism. It is giving taxpayers a fair deal. Instead of scaring us, government should be reassuring us of just that.
If it requires taking over banks for Americans to get value for their investment -- well -- that's what its going to take, they could say. Instead, I guess someone out there is hoping that as long as this terror talk about terrible "takeovers" keeps up, the public will be too stressed to figure out what's at stake.
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Show AllNationalizing the banks would mean for the first time we would have total transparency of the corporate transactions instead of relying on corporate executives to be honest for a change. Nationalizing would mean all of the executive conventions, parties, conferences, luxury private jet purchases, bonuses, pay raises, etc... would stop. These are my reasons for supporting nationalization, but it should shorterm and a transitional process only.
Mike ,I wish they would hurry up.Zombie banks ate my government cheese and my tax return! peas in
We The Taxpayers are the equivalent of "net" profit participants in a Hollywood film deal - not one of whom has ever seen a dollar of "net" profits in 100 years.
But it's fun to hope, apparently...
Laura, the one thing you left out of your good article is that the best way to privatize the profits is to give each American equal and non-negotiable shares of stock in the banks they are buying. If banks are handed over to politician recipients of bank's campaign "contributions", we know what will happen.
How much better privatization can we have than to let taxpayers be stockholders in these banks?
There seems to be a repeating theme by edops this week. EdOps like Flanders and Sirota and Nichols appear to be repeating each other. Is it a chorus, or is it redundancy, or is it intentional, or are they pandering for the Obama team?
It's hard to tell what's real anymore knowing full well the above EdOps have personally invested in Obama. What I'm coming to realize is real is how little the average population is representative by either politicians or the pundits who say they speak for all of us.
One side said free-unrestricted markets, now the other side is trying to build a movement calling for nationalized bank. There is no movement -no unified single opinion- in the crowds of on-lookers. One thing is for certain, 60% of the population thinks handing money out to banks and investment firms bites. But another thing for sure is happening and that is watching pundits soft-peddle Obama's potentially long reaching bailout of banks as “not scary”.
Of course it is scary, but it isn't because of nationalization (as their counter-pull, Rush, would have us believe). The situation is scary because the public is powerless in uncertain times. And the one flagging thing all of us are dogged by is the certainty that we will have to pay our own personal debt load no matter how high the APR. No pundit and certainly no professional politician are going to come bail out my or your sorry ass.
Let's not hold our breathe hoping we'll ever see anything paid back.
Banks have taken over the USA. Not the other way around.
how can you "stress test" this?:
http://www.globalresearch.ca/index.php?context=va&aid=12053