The Hill has a piece today arguing that Obama might have a harder time pushing bank nationalization than a Republican since he’d be more vulnerable to charges that he’s a dangerous left-wing freak like Alan Greenspan, Joe Stiglitz, Lindsey
Graham and others who support the idea. As a political matter that may or may not be true. But what caught my eye was the quote from Scott Talbott, vice president and spokesperson for the Financial Services Roundtable, which represents most of the big TARP recipients in addition to a medium sized list of big financial institutions nationwide.
Says Talbott: “If you had government running the banks, in the long run, you’d destroy the private sector.”
The only problem is that no one is talking about a ‘long run’. No one who is remotely part of the mainstream policy discussion is talking about the government taking over and running the banking sector. The idea under discussion is having the government take over the failed banks, clean them up and then reprivatize them. Private banks in, private banks out. The only difference is that the private banks that come out on the other side would be owned by different people. That’s the rub.
So this is a complete non-point.
