On Tue, 10 Feb 2009, Doug Henwood wrote:
> <http://doughenwood.wordpress.com/2009/02/10/obama-to-coddle-bankers/>
>
> At this point, the only thing that makes any sense is to nationalize the
> weakest banks, kick out management, wipe out the shareholders, clear the
> decks, and start over with a tightly regulated system.
I have three naive questions.
One, besides the pleasure (which I would feel as well as anyone) what exactly do we get of kicking out management? Wouldn't we simply have to hire new bankers who we would then have to get up to speed? Isn't it more a question of re-regulating bankers, whoever they are?
Secondly, if we nationalize the two weakest banks (BofA and Citi) right now, is there no chance that will cause a rapid meltdown in the worth of the banks we don't nationalize? (Thus getting nationalization off to a horrid-looking start?) Is this something we don't have to worry about?
Thirdly, is it certain that the stress-testing that Geithner talks about can't be a path to nationalizing the banks that fail it in the near future? That this isn't an exercise in laying political groundwork for nationalization?
Michael