Nationalizing The Banks

[GREENBACK]

Let's see,
Were welfare and section 8 housing,both great ideas!, created by the banks? If the gov't had just kept to themselves I believe the banks would have continued to screen people for loans as they did in the past. I hope I don't come across as putting big buisness "on a pedestal". I know they can screw things up as well but not nearly as well as the gov't does.

My point with gov't is that they always have a political agenda that is usually motivated by staying in power over other parties and sometimes supercedes doing what makes sense. Once they sell an idea and pass feel good laws they go away. They have no real stake in seeing a buisness do well or not as much as the people running the company. They are simply counting votes in the next election.

The problem wasn't that they encouraged home ownership, it was that they demanded it. This really made them look good for a time. Their house of cards is now collapsing. There is certainly more than one guilty side in this. The gov't has a long history of trying to fix things and screwing it up to the point that it can't be fixed(see welfare above). Part of the culture of the financial buisness is based on greed(they're about making money). I truly believe the gov't opened the lions cage here. I'm not sure who is most suited to fix this but I don't think it's the gov't based on their past record.

[boosami]

Maybe I'm just an idiot, but haven't banks always been effectively nationalized, even before the bailout and this recession? The big worry here is that the government will have control of what the banks do... But that's already true, isn't it? Banks don't have the money; the US government allows them to create the money.

The amount banks can loan in ratio to their deposits--among many, many other things--are controlled by the Federal Reserve. Banks have to conform to the Fed's rules and regulations. The Department of the Treasury delivers physical money to the banks as needed. Banks were created and could not exist without support from government entities such as FDIC and other national backing. They depend wholly on the government, which seems to me like they are already under national control.

I guess I just don't get it...

[GREENBACK]

It's true that banks follow many federally mandated guidelines but my fear is that we will see yet another bureaucracy created solely to insure full gov't control of the banking system. This is when we'll see things take a turn for the worse.

I'm not advocating that there be no gov't involvement in the banking system but I think to let the gov't create it's own agency(that's what they'll surely do with our tax dollars funding it) to control things is a major mistake. I've said it before; someone show me where this has ever worked.

[Snodog]

I don't understand what the big deal is about nationalizing some banks. We did this in the S & L crisis in the early 90's and it worked out quite well. Sweden did it when they had their own credit crunch and it worked quite well. When the markets stabilized the banks were privatized again. Lets not get carried away with the fear mongering.

[Angio333]

U.S. regulators stand ready with more bank capital: Financial News - Yahoo! Finance

I kind of understand the push for homeownership by the government -

Which is easier to you?

A. Keeping people eternally on welfare and paying for Section 8 housing?

or

B. Encourage homeownership as a form of social insurance?

What about work hard and rent until you can buy? Its not just own a home or Section 8.

I don't believe that all business people are fair and effective. However, I would prefer them over Uncle Sam anyday.

[Scanner]

What about work hard and rent until you can buy? Its not just own a home or Section 8.

This is the problem politicians face. Sure. . .on superficial exam, that seems to be the answer. And that's what we did. It's what a lot of people do to become "socially upwards mobile."

The problem is this - you have a couple let's say - one who is a cafeteria worker and the other who stocks shelves at Walmart. Rent for a 2BDR/1BA apt. in my area was around $1200/month. You then add in utilities, car insurance, renter ins. and they are basically just living paycheck to paycheck. . .not able to save up the 20% down. (debatable I realize. . .they could embrace a very frugal life)

Now. . .okay, many here would just say - "Okay that's fine. . .not everyone in society is meant to be a homeowner. . .they should just work and accept their lot in life."

And many do. The problem now becomes what happens when disability or old age arrives and they don't own their home? The landlord is still going to want his/her rent.

It's welfare time. . .society, get out your pocketbook. We don't want to be stepping over the elderly in the street.

This is why homeownership was initiated and used as "social insurance." I don't think the idea was bad per se but when you mixed in the profit motive with what was supposed to be a societal goal, well, you have this train wreck.

[tripods68]

Thje first steps was the first bank bailout. rumour has it that Obama wants to nationalize the banks even more.

Do you think its a good idea?

I don't. It screams socialism.

We already nationalized Fannie, Freddie, AIG more than 70% of their assets. We partly nationalized all nine biggest institutions; WFC, JP Morgan, Bofa, CITI, Goldman Sach. BOFA and CITI are both "almost" at the brink full nationalization. How about the Auto industry. We already gave them money. Another 130 Billion will soon come to all 3 automakers. It just a matter of time. I hope i'm wrong.

[EEinNJ]

"Nationalization" is just a buzzword to whip up opposition. A much higher degree of regulation and oversight is called for, not for it's own sake, but because it forces institutions to change unacceptable operating practices. I've worked in the pharma industry, for employers and clients that found themselves in trouble with the FDA. The threat of being shut down or taken over was big motivation to clean up their act.
The reason why to do this that reaches beyond so-called socialism- public health safety. In this case, it is financial safety. When the implications are a tide of unemployed and/or homeless people, neighborhoods of boarded up homes, cities and states that are broke and can't provide services, you can't just write it off as the creative destruction inherent to capitalism.
That said, I want my money back. And I don't want to give any more to the rich and powerful.