Saturday, February 14, 2009


Thomas Riggins

based on THE WEEK 2-20-09

Geithner’s bank rescue went over like a lead balloon. It was short on specifics and long on generalities and had no new positions to offer. The Week quotes Chicago Investment manager Peter Cook who observed the government said it was “going to do something bold and new, and it [Geithner’s speech] was neither bold nor new.” The Wall Street Journal pointed out the new plan looked like an echo of what Bush and Paulson wanted to do-- buy the toxic assets of the banks.

Why not just nationalize the banks and admit that capitalism can no longer function, if it ever did, for the public good?

Governments around the world will be forced to take socialist measures to get out of this depression-- any other actions will just patch the system up until the next crash.

Robert Kuttner (USA TODAY) says the truth is “Several of America’s biggest banks are insolvent.” How much cash will it take to correct that-- can it be corrected short of nationalization? Geithner’s proposals will only keep them running along while their assets go down the rat hole of bad debts.

What Kuttner suggests, according to The Week is “that ‘It would be far cleaner and more efficient’ for the government to ‘take over the large banks, clean out their balance sheets,’ and then sell them back to the private sector.”

Sell them back? Didn’t the private sector cause this mess in the first place? The whole argument for capitalism is that it is more efficient and runs the economy better than state ownership and socialism can.

But we have never had socialism in an advanced first world industrial state so we don’t know what it can or cannot do. But we have had capitalism and it has produced this current mess-- and we have only seen the tip of the iceberg.

No, I don’t think we should sell the banks back to the same private sector which ruined them in the first place. If it takes the government to keep things going then the government should just keep them permanently.

The banks should be seen as public institutions run by the government to provide loans at reasonable rates and to help people, not as means to generate profits for a few capitalists at the expense of all the rest of us.

Geithner has too many ties to the old moribund Wall Street gangs, he should be replaced by someone who will boldly go where no capitalist has gone before.

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