Nationalizing is the wrong word. It is really receivership, and that happens all the time.
I saw those blogs, too --
talkingpointsmemo.com
But it really is NOT the wrong word. Receivership is the wrong word. This is what happens when a blogger leaps outside his area of knowledge ("Aren't they really the same thing?". Hell, no).
A "receivership" involves a receiver or trustee who is appointed -- by the government or a court or whatever. But the distinguishing characteristic is in whom the ownership of property and liability for debts vests (there are also issues of control, but these are relatively minor).
We're talking about nationalization -- in which the federal government will take ownership of the net assets of these entities, as well as become responsible for their liabilities.
If, instead of this, they are forced into bankruptcy, then you could end up with a receivership. I don't hear anyone talking about this and frankly, these organizations probably don't meet the criteria for anything other than a liquidation, which would apparently not serve the intended purpose.
Nationalization of some of these banks may be the best way to deal with them. Most of us agree that some of them are plainly too big to fail, and all the merging and acquiring that can be done probably has been done. Any solution now is going to be more complicated.
Still, a RTC-like approach would be preferable, but I don't see anyone talking about that. And RTC did have some fairly major mis-steps. But a lot of the people who ran RTC are still around (a couple are good friends of mine) and could quickly have an operation up and running again.
I'm not sure how a receivership is helpful, unless it is used to obscure the fact that they're nationalizing some banks. |
