I highly recommend this column in today’s Times, by David Leonhardt, in which he argues that today’s financial crisis was caused by people who knew they were free to ruin the economy, making big bucks for themselves in the process, because they knew the government would step in and bail them out. In a word, he says they were “looting”. That would be us, the taxpayers that they were looting, by the way.
I was struck by this paragraph:
Mr. Bernanke actually took a step in this direction on Tuesday. He said the government “needs improved tools to allow the orderly resolution of a systemically important nonbank financial firm.” In layman’s terms, he was asking for a clearer legal path to nationalization.
It made me realize how quickly we have legitimized the use of what is, in this very odd country of ours, a loaded word, namely “nationalization”. I think I’ve used it myself, so I’m not criticizing Leonhardt, but it’s testimony to the Republican spin machine that this bogey man word has entered common parlance as it has.
I lived through the Savings and Loan debacle, and as a I recall, failing banks back then were put into receivership. In fact, many banks have failed this year and last, and they have been put into receivership. It’s only the banks that have not yet been put into receivership about whom we use the word “nationalization”. My online dictionary defines the term thusly: “transfer (a major branch of industry or commerce) from private to state ownership or control.” At least by that definition, it’s an all or nothing proposition; if you don’t nationalize all the banks, you haven’t nationalized at all. But if we grant that you can leave some private actors standing, the term still implies a degree of permanency that no one wants and no one is advocating. So why the easy shift from “receivership” to “nationalization”. It certainly harmonizes well with the so far quaint Republican attempts to revive fears of “socialism”.
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