Image via WikipediaI love the English Language. And moreover, I love the English Dictionary. How dictionaries work is that if you are unsure of the meaning of a word, then you look it up. Now with the internet, you can do it easily online. With the greatest of respect, Secretary Geithner needs a dictionary because I am not convinced he fully comprehends the meanings of the words "nationalize" or "nationailzation".
Here's one meaning of Nationalize: "To convert from private to governmental ownership and control" . That's from dictionary.com.
Or if you are a purist like me, you prefer the Oxford Dictionary. So according to AskOxford.com: Nationalize - transfer (an industry or business) from private to state ownership or control
Have a look at this article from the Huffington Post. Geithner: Nationalization is the "Wrong Strategy", "Deeply Offended" By Banks. I beg you, watch the interview as well with PBS' Jim Lehrer
Let's recap, shall we:
Secretary Geithner was part of the team that agreed - rightly - to intervene in the private banking system back in September. That was to prevent complete collapse. I'm not rehashing what the Government did to cause this problem in the first place because we would be here all night. At that time, he was in charge of the New York Fed. You know New York right, where Wall Street is......moving on....
When he and the Administration - rightly - tell CEOs who have taxpayers funds propping up their companies that no, they cannot buy corporate jets and no, they cannot have lavish retreats, what do you call that? Is banking private then? Because when the Government is telling anybody how to run a company - beyond exercising legislated regulatory authority - then that is some form of nationalization.
Again, see the definitions above. Telling companies what to do - beyond normal regulatory supervision - and own shares, and providing funds IS exercising "control". Or am I missing something?
Now, did I read this right? From the article above stated:
"As for the banks and their behavior during this crisis, Geithner said he was "deeply offended by the quality of judgments we've seen in the leadership of our nation's financial institutions. They've created a deep hole of public distrust and anger..."
So he would prefer to keep these people who have "deeply offended"? And this is because he trusts these people who have created a "deep hole of public distrust and anger"? This makes NO sense. Could the Secretary please clarify?
Moving on, which private person will put money into this halfway arrangement - private parties who the Secretary says exercise bad judgment and the Government who has no place in banking other than supervision.
The Government needs to get in and get out.
This half way is making matters worse.
Respectfully, I have to completely disagree with the Secretary. The Government does not have to be tentative. The Government has every incentive to get out as soon as possible.
Propping up banks and pretending to be a "silent investor" is really just a charade that is not fooling anyone, not making the banks and the banking system work as it should, and not instilling confidence in the sector, or frankly, confidence in the Government to take the hard decisions to handle this problem.
We are waiting.