In a speech earlier today, President Barack Obama laid out a new rationale for his administration’s opposition to nationalizing the country’s major banks. Watch:
So let me be clear. The reason we have not taken this step has nothing to do with any ideological or political judgment we made about government involvement in banks. It’s certainly not because of any concern we have for the management and shareholders whose actions helped to cause this mess. Rather it’s because we believe that pre-emptive government takeovers are likely to end up costing taxpayers even more in the end and because it’s more likely to undermine than to create confidence.
Governments should practice the same principle as doctors: First, do no harm.
Back in February, Obama offered an arguably different rationale. He told ABC News’ Terry Moran that there were two problems with the so-called Swedish model. First, that “Sweden had like five banks,” while “we’ve got thousands,” and second that “Sweden has a different set of cultures in terms of how the government relates to markets and America’s different.”
“[W]e want to retain a strong sense of that private capital fulfilling the core — core investment needs of this country,” Obama said.