Tuesday, March 3, 2009

Professor Joseph Stiglitz says 'Nationalise banks'

Professor Joseph Stiglitz on a BBC 'Business Daily' interview which I heard in the middle of the night has said what many are beginning to think is inevitable

“We don't have the control, so they get to make the decisions in their advantage”
There's a growing chorus of voices in the United States suggesting that temporary nationalisation may be best solution for the living dead, or 'zombie banks' among America's banks.

Listen to the interview with Professor Stiglitz here

The voices include Alan Greenspan, a former chairman of the Federal Reserve, and the Nobel prize-winning economist Joseph Stiglitz.

The argument goes that rather than drip-feeding public support to so-called 'zombie' banks, the government should take them over, clean up their balance sheets and sell them off.

It is not something the Obama administration wants to consider right now. After all, nationalisation is a dirty word for many free-market Americans.

But then what does it really mean - full state control, or partial ownership? After all, the US government already owns about 40% of Citigroup.

The US Treasury and the Federal Reserve dismiss the idea of nationalisation. But uncertainty about it is causing upset in the markets.

Business Daily's Lesley Curwen spoke to professor Joseph Stiglitz of Columbia University, who believes it is only a matter of time before nationalisation happens.


Frank Partisan said...

When bourgeoise economists talk about nationalizing banks, it is good, but different than us talking about it.

Mike Morin said...

Nationalizing the banks is rubbish.

How can we nationalize things that are internationally owned? We need a world economy based on relocalization and inter-community,inter-regional and worldwide cooperation.

The proposal to put failing ("lemon socialism") banks into Government Receivership, "clear out toxic assets" (whatever that means - have the government buy the bad investments (i.e. take the loss), then sell the banks to "a new round of investors". Does the Government plan to pay the old investors for the failing bank?

What the U.S. Gov't. should do is honor the obligations of FDIC, FSLIC, etc., pay unemployment insurance, and allow the affected to apply for SSI and food stamps.

We don't need banks. We don't need investors in financial institutions, only depositors. Money can be held in credit unions, and since credit is an overly risky and inflationary business strategy and a dangerous personal strategy, credit unions could evolve to equity unions.

Localizing real assets (nationalizing is a subset in a faulty planetary organization of peoples) makes more sense. It would favor comparartive advantage over competitive advantage in an eco-syndicalist re-organization based on peace, equity, humanity, quality of life, and sustainability.

Mike Morin

Vance Christensen said...

Professor Stiglitz is a Neo-Keynesian, meaning he's far from being a true free market capitalist. I find it hard to believe we can debate Capitalism vs. Socialism/Communism/Statism/what have you, when the evil "free market" has not been able to function for a very long time without government intervention--at least since 1913.

The banks have essentially nationalized our government since the creation of the Federal Reserve. Ben Bernanke, the Fed Chairman, is without a doubt the most powerful person in the world as he controls the printing presses for the world's reserve currency. Not even Barack Obama has such power.

Professor Stiglitz is a strong advocator of a Central Bank. That doesn't make him a capitalist or a believer in the free market--to the contrary. Advocating centralized control, especially of our banking system, was something Karl Marx supported. If anything, America has been moving in the direction of statism just as any and every country has in history. Look how bad it's working for us now.

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