Last Labor Day, the thought of nationalizing banks was alien, if not seditious. Today, some argue for bank expropriation. Bafflingly, this advice comes not from Communists, but from Republicans.
“It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring,” former Federal Reserve chairman Alan Greenspan said in Wednesday’s Financial Times. This would “allow the government to transfer toxic assets to a bad bank without the problem of how to price them.” Mr. Greenspan, whose monetary bubble elevated the economy to the vertiginous heights from which it is tumbling, seems old enough to understand that banking without the “problem” of prices is like flying without the “problem” of altimeters.
Why do newspapers still seek this man’s counsel?
For Sen. Lindsey Graham, South Carolina Republican, mere practicality trumps free-market principle.
“We should be focusing on what works,” Mr. Graham chirped to the Financial Times. “If nationalization is what works, then we should do it.” Mr. Graham claimed that many GOP senators – including former Republican presidential nominee John McCain – want nationalization “on the table.”
The idea of government commandeering banks is nothing new. It appeared in 1848 in “The Communist Manifesto.”
“The Proletariat will use its political supremacy, to wrest, by degrees, all capital from the bourgeoisie,” Karl Marx predicted. This would include “Centralization of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly.”
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