> This is what everyone says, but I don't understand it at all. If there's
> an upside, we share it 50/50. If they go bad, then (a) at least we've
> removed them from the banks, which is huge plus for the economy, and
> largely solves the banking crisis
Nope. This isn't the S & L crisis, which was sectoral in nature, or like the dotcom bust, which wiped out stocks rather than loans. The whole damn neoliberal bubble machine is busted. At a minimum, the financial losses are going to be $3.5 trillion, according to Roubini's latest analysis.
The Federal Reserve flow-of-fund statistics are pretty shocking: financial firm debt went from 21% of GDP in 1980 to around 200% by the end of 2008. That debt fueled a massive consumption binge, which kept the world economy going for thirty years.
That game is done. Huge chunks of that debt need to be erased for an economic recovery to happen, and that means Nationalizing. The. Banks. Now.
-- DRR