PrintOctober 14, 2008
9 Banks 'partially' nationalized
Can you get "a little" pregnant? Then how can a bank be "partially" nationalized?
The U.S. government is dramatically escalating its response to the financial crisis by planning to invest $250 billion in the country's banks, forcing nine of the largest to accept a Treasury stake in what amounts to a partial nationalization.
News that European governments also planned to take stakes in their banks and anticipation of new U.S. measures unleashed a tremendous surge in U.S. stock prices yesterday, with the Dow Jones industrial average soaring to the biggest percentage gain since the 1930s, up 11.1 percent. It ended 936.42 points higher, the largest point gain ever, just days after the Dow had its steepest weekly decline in history.
The Treasury Department's decision to take equity stakes in banks represents a significant reversal, coming just weeks after Treasury Secretary Henry M. Paulson Jr. had opposed the idea. In a momentous meeting yesterday afternoon in Washington, Paulson, flanked by top financial regulators, told the executives of nine leading banks that they needed to participate in the program for the good of the national economy, two industry sources said on condition of anonymity because they were not authorized to speak publicly.
News that European governments also planned to take stakes in their banks and anticipation of new U.S. measures unleashed a tremendous surge in U.S. stock prices yesterday, with the Dow Jones industrial average soaring to the biggest percentage gain since the 1930s, up 11.1 percent. It ended 936.42 points higher, the largest point gain ever, just days after the Dow had its steepest weekly decline in history.
The Treasury Department's decision to take equity stakes in banks represents a significant reversal, coming just weeks after Treasury Secretary Henry M. Paulson Jr. had opposed the idea. In a momentous meeting yesterday afternoon in Washington, Paulson, flanked by top financial regulators, told the executives of nine leading banks that they needed to participate in the program for the good of the national economy, two industry sources said on condition of anonymity because they were not authorized to speak publicly.
So this is how it comes, yes? Not with dramatic speeches and chest thumping but in the silence of a well appointed government office where American citizens are told to hand over the private property of investors to virtual government control.
I am speechless with rage. Not one peep from "conservative" economists? Where are the op eds? Who is defending the free market system? Us? A couple of thousand internet bloggers and writers and a few radio talk show hosts?
What would Paulsen have done if the bank execs said "thanks, but no thanks?" That's a chasm I choose not to have open beneath my feet thank you.
If Bush can do this, what would a Barack Obama do in the name of this emergency? One shudders to contemplate it.
This won't stop at banks. If things get much worse, other industries will be sitting in Paulsen's office and given the choice of "doing what's right for the national economy" or...what? Anything is possible with this crew.
If it were simply a case of throwing the rascals out, that would be easy. But the entire government of the United States - save a few scattered souls in Congress - are evidently in favor of this switch to socialism. It makes one feel helpless when you realize that decisions being made now will have consequences that will reverberate the rest of our lives.
Have they all lost their minds?
