Image by jeco via FlickrOk, I'm confused. Frankly, I need to exercise one of my favorite provisions of the Constitution tonight: the right to free speech. So here goes:
Today, it's reported that the President says that the banks should be in "private hands". The implication of this is that he is anti-nationalization. Is he?
Well, let's examine this. What does one consider the current Government shareholdings of banks? That is "partial nationalization". I hate to be the one to have to break it to everyone.
Can somebody explain to me the merit of increasing the stakes in the banks but not fully nationalizing? Let's look at this.
- Banking is a private sector activity. Government's regulate. And Government's must not regulate themselves in banking.
- There is plenty of merit for the Government to hold shares permanently in certain companies in certain industries, under certain conditions. Banking is NOT one of those industries
- There is plenty of merit for the Government to nationalize certain industries. Banking is NOT one of them - UNLESS it is temporary and ONLY to prevent the complete collapse of the banking system , clean up the entities and put the entities back into private hands. Temporary nationalization is not the same as permanent nationalization.
- Governments must intervene when depositors are at risk and the whole banking system is on the verge of collapse. Paulson did that. President Obama has continued it. It was the right move. It is ONLY a holding pattern. It is NOT the end all.
- Now, what is the point of increasing ownership in banks but leaving them in "private hands". This only adds to the uncertainty. Markets HATE uncertainty. Here are the logical questions: So after 40%, is the Government going for 45%? What will make the Government go for 51% or more? What does 40% mean anyway? Who is in charge? Will the government be a shareholder forever? Why on earth would the US government be a shareholder in a bank forever? If the US Government is planning to be a shareholder forever, then let's all know so the markets can just deal with the pain of that adjustment and let's move on. This "in between" but "nowhere" is just ridiculous.
This situation is dragging down the entire domestic and global financial system. And because the domestic and global economy depends on the banking system, this situation is dragging down the entire global economy. And because domestic and global social stability depends on the local and global economy, this situation is threatening the entire global social stability. Is anybody getting this picture?
Ideology is strangling the US. Don't believe me? Well, check this out: Now some Republican Governors are not taking the money for the people because they did not get what they want. Of course they want different things in the stimulus, but they didn't win the election. No one gets everything they want. This is a democracy, or did they all forget? Thanks to the Republicans, I am really wondering what is the point of democracy. No seriously, if you don't have something constructive to say, then what is the point? Let's get over it and get the country back into gear.
In my lifetime, I thought I had seen the last of the major global turning points. I remember the end of apartheid and when the Berlin Wall fell, for example. I am now convinced that I am going to see an entirely new world order because American leadership just cannot seem to see past ideology.
Long ago, when the collapse started, I said that I was making plans to learn Mandarin. Thank you China, for taking the time to visit us here in Jamaica last week. Thank you for all of your assistance. And as one of the newly announced cooperation initiatives, thank you for making it very easy for me to learn Mandarin right here if I wish to.