Nationalization of Banks

Nationalization of Banks

There's no question that nationalizing a few of the biggest banks would be less costly and more efficient than the present patchwork approach ? says journalist and author Doug Henwood ? yet Obama administration officials still believe there's something perilously un-American about doing it. In the end ? he adds ? "we think the situation is dire enough that all these ideological objections may be overcome pretty soon."

Both Citigroup and Bank of America are down more than 20% in early trade today ? and we imagine that Hank Paulson and Tim Geithner are starting work on yet another weekend deal of some description ? since at this rate it seems that neither institution is capable of surviving in its present form much longer. They should embrace the inevitable and just nationalize the two banks.

Any deal will be necessarily complicated by the fact that Paulson dragged his heels when it came to requesting the second tranche of TARP funds ? even after he blew through the first $350 billion in no time. As a result ? it's far from clear what money Treasury can use to shore up two of America's most systemically-important financial institutions.

Citigroup got a nice taste of reality plummeting 39% on this supposed good news for the company. Good news for who? The executives that will still be getting million dollar salaries until they figure out a way to get hefty bonuses before shoveling off a carcass of a former mighty bank to the majority of the population? Doesn't this remind you of that scene in Titanic where everyone is trying to get on the lifeboats? Unfortunately, the U.S. taxpayer is the last to get any support here and is most likely going to freeze in the water with those toxic assets. This was not ...