February 23, 2009

Nationalize the big banks and fire their managers, The New York Times declared in an editorial this weekend.

Most of those who commented online supported nationalization, what the Times dubbed "the least bad solution to a truly desperate situation".

Only with the government in charge can taxpayers get "a realistic assessment" of toxic assets that banks won't disclose, the Times said. "Bank losses are mounting, leaving some institutions undercapitalized and — by credible calculations — insolvent[T]axpayers need the banks to function, and it is their money on the line to support banks that are too big to fail, like Citi and BofA," said the editorial, which would have been shocking just a year ago, but today did not make the list of the 10 most emailed Times stories.

"Americans have a visceral horror of the word nationalization," the Times said.

This echoed a recent interview BS&T did with a former member of the New York Federal Reserve, Neal Soss, now a managing director with Credit Suisse First Boston. Soss said that the U.S. had become "socialist" overnight without a philosophy to support it. In the video interview shown here, (about one-third down the page) Soss said, "No one will ever say we're going to nationalize the banks but de facto, what else is going on?

Richard Schumacher, one of the Times' readers, commenting on its web site said: "Let's take a quick poll. Which phrase is scarier:a. bank nationalizationb. economic collapse? Send your answer to your congresspeople and your favorite political party."

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