A Break in the Ranks at the Fed - A Most Important Speech

The Kansas Federal Reserve President, Thomas Hoenig, representing himself, just gave one hell of a speech, Too Big Has Failed. Calculated Risk, (who found this gem), said this is a call for nationalization. Is it?

In the speech, Hoenig states:

we have not defined a consistent plan and not addressed basic shortcomings and, in some cases, the insolvent position of these institutions.

Hoenig then acknowledges while the United States is trying to avoid nationalization, it's happening anyway, slow, painful and piecemeal. He also suggests the current series of actions are adding to market uncertainty.

Hoenig describes current actions on the financial crisis, the results and offers a road map of policy suggestions.

What is Nationalization and why is Everyone Afraid of It?

What's in a word? Doesn't a rose by any other name smell as sweet?

But the boogie man du jour is nationalization.

What do they mean exactly? The definition of nationalization is:

Takeover of privately owned corporations, industries, and resources by a government with or without compensation.

Ok, so what's the difference between this and the fact the U.S. taxpayer has given the financial sector $800 billion dollars?

There is little difference says George Will.

The issue is what the U.S. taxpayer gets in return.


Weekly Audit: Geithner's Terrible, Horrible, No-Good, Very Bad Bailout

by Zach Carter, Media Consortium MediaWire Blogger

In this week's Audit, we're examining Treasury Secretary Timothy Geithner's thoroughly uninspiring bank bailout plan, which fails on almost every level. What's more, some of the most insightful (and stinging) critiques of the proposal are coming from progressive media.

Word Du Jour - Nationalize

What is Nationalization? It means to put under government ownership and/or control a private sector institution.

Like a grassroots tsunami wave, the blogs are now a buzz with the concept of nationalization of the banks. But we pointed out, months ago, by nationalization, Sweden had the best result and least pain during their financial crisis.

Tony has made a list of some of the nationalize now blog posts sprouting up like mushroom clouds in a nuclear implosion.

Econ-Fin News - Dec 5, 2008 – Basic Assumptions and Nationalization

Back in the middle of September, when the Wall Street model of investment banking collapsed into the dustbin of history Stirling Newberry wrote a series of articles laying out the underlying realities of the financial crises, and re-framing the issue as a Constitutional crisis because of the existence of a reactionary faction in American politics that is as yet unwilling to move from the existing means of storing wealth – the development of land, i.e., suburban sprawl – to a new store of wealth that would allow us to begin building a workable future. The Constitutional crisis arises because the present monetary configuration of the United States rests on the valuation of mortgages, the values of which are supposed to keep increasing as more land is developed:


A Little History of Financial Crises

The claim by the Fed and Treasury that spending $700 billion of public money is the best way to recapitalize banks has absolutely no factual basis or justification. - Nouriel aka Dr. Doom Roubini

I woke up this morning to see the blog buzz word of the day is Nationalization as Economics bloggers hunt for the solution to the financial crisis.