Nationalization: It's Not Just for Communists Anymore

businessandmedia.org ^ | February 25, 2009 | Jeff Poor

[Rufus2007]

In America, “nationalization” used to be a dirty word. But that was prior to this era of government intervention to save industries and institutions deemed “too big to fail.” Now, state involvement in – and even ownership of – certain sectors of the national economy is called a “necessary evil.”

The markets may not see it as necessary, but they’ve made no bones about it being evil. The mere mention of nationalized banks by a prominent senator sent the Dow Jones into a tail spin.

With good reason, too. Vladimir Lenin wrote an entire book about it with “On Worker’s Control and the Nationalization of Industry.” Mao Zedong of China nationalized all land and equally distributed it to landowners and peasants when he came into power in the 1940s. More recently, Venezuelan dictator Hugo Chavez had no qualms with nationalization, evident from his seizing of several private sector industries as he has ascended to power.

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[Rufus2007]

All bank nationalization needs is a little public relations fine tuning - no big deal there.

[Hoodat]

Hey, it worked for Hitler (for a few years, anyway).

[Tempest]

Sweden is communist? wow that’s news.

[SandWMan]

Well, it’s very socialist. Strictly speaking, no country was ever communist.

[Professor_Leonide]

Of course it’s just for communists - they simply try calling themselves Democrats.

[vpintheak]

Well they commies just didn’t do it right, that’s all. We are smarter and we will do it better, don’t ya know?

[muawiyah]

I don't recall Mao "redistributing land". I do recall that he seized all of it and assigned it to agricultural communes.

Major property owners were given bonds payable whenever the Chicoms said they could get paid.

Biggest deal in Big China was when the Chicoms knocked down and ploughed over the ancient family burial monuments. One estimate was this increased arable land by 25%.

[M. Dodge Thomas]

The "markets" don't like the idea of temporary nationalization and recapitalization of insolvent money center banks because doing so would wipe out shareholder value in these institutions.

The alternatives however protect shareholder value at taxpayer expense.

As someone who has a (small) portion of my retirement funds invested in US financial institutions I'm not very happy at the prospect watching much of that investment wiped out with no hope of recovery.

But I also don't see why the taxpayers should be bailing me out as an one of a limited number of investors when short-term nationalization and recapitalization is much more fair to me (and everyone else) in my general capacity as taxpayer.

[Jim Scott]

The political sky is just full of trial balloons these days. Nationalization of banks by the (Obama) government is just one of them.

Politicians and TV people who pretend not to understand why the concept of bank nationalization is anathema to the financial markets and considered a negative by a vast majority of Americans are being used as stalking horses for the Obama gang to see if they can pull off this long-dreamed of coup d'etat and do huge damage to a major part of the capitalistic economic system.

I'm worried - but still have some hope that the American people will stop this before the damage to our economic system becomes irreparable. If not, America as we know it is, essentially, over. The Leninist America-haters will have won. God help us all.