In the second part of my interview with economist Dean Baker, we talk about the fact that a significant portion of the banking industry is already insolvent and that a much larger portion will be broke before the end of the year. Any discussion of nationalization -- or any denial that we're nationalizing the banks -- needs to start with the premise that if you're not going to let the banks declare bankruptcy then you're nationalizing them at some level.
Who takes the bigger hit: taxpayers or shareholders? It depends on how you do it. Dean Baker explains: