Ben Bernanke, Federal Reserve Chairman, Doesn't Rule Out Banks Nationalization!

[Better Believe It]

Ben Bernanke, Fed Chairman and Newly Minted Radical.
By Dana Milbank
Washington Post
February 19, 2009;


History will no doubt judge Bernanke as the man left holding the bag when maestro Alan Greenspan left the Fed. But the economic collapse seems to have had a salutary effect on Bernanke: The academic known for his bland answers and brown socks has been liberated in both word and deed. This student of the Great Depression has taken extreme and unprecedented actions to avert a modern-day sequel, and he's taken the Fed chairman's lexicon well beyond basis points and LIBOR and M1 and M2.

"Extraordinary times call for extraordinary measures," the radicalized Fed chairman said. To prove that, he's dropped interest rates to near zero and has the Fed lending directly to corporations and buying mortgage securities. Yesterday, Bernanke left the door wide open to the most radical step of all: nationalizing the banks.

President Obama over the weekend said a "good argument" could be made for Sweden's temporary nationalization of banks. And no less a free-market authority than Greenspan, in an interview with the Financial Times this week, said "it may be necessary to temporarily nationalize some banks," calling this the "least bad solution" to the financial crisis.

When Bernanke was asked at lunch about his predecessor's sentiments, he voiced no opposition to the idea. While discouraging government ownership of banks "for a protracted period," he offered no such objection to short-term nationalization. "Whatever actions may need to be taken, at one point or another, I think there's a very strong commitment, on the part of the administration, to try to return banks or keep banks private or return them to private hands as quickly as possible," he said.

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/18/AR2009021803173.html

[avaistheone1]

1. I hope it is done before the Treasury drains us taxpayers dry.

[babylonsister]

2. Whoo hoo! Bernanke and Greenspan!

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=5079806&mesg_id=5079806

I kid! And I have no clue. But I'm listening.

[catnhatnh]

3. I have no problems with permanently nationalizing the banks...

with the sole proviso that lending standards are permanantly set by a balanced bipartisan board. A bank that lends with the power to attach paychecks and tax refunds is liable to write few bad loans and a bank that could lend to all at prime rate would be a blessing.