Last week, several congresspeople were heard commenting that nationalizing banks might be a good idea and something that America was probably going to have to do. Lindsey Graham was the one that really caught my attention on this since he is a Republican – a RINO, but still a Republican. The market went crazy last week as investors began to fear that the Obama Administration might just go ahead with nationalization and the Dow fell considerably almost every day. Before we entered the weekend, the Obama Administration assured everyone that they were not going to consider nationalization. But you know, if the president’s lips are moving he is lying and so today breaking news on the wires seems to indicate that banks will be nationalized – they just are not going to call it that.
Here is what Fox News is reporting: “The Treasury Department and Federal Reserve are expected to announce details this week of new capital assistance measures ‘designed to avoid nationalization’ of banks, including details of a previously announced ‘stress test’ for institutions that likely will require some bigger firms to temporarily raise more capital, an administration official told FOX Business on Sunday.”
An adminstration official said that these new capital measures are to provide a buffer and give regulators “an insurance policy” in case the market continues to deteriorate. This “test” they are talking about I guess is suppose to see if institutions can withstand a “tougher economic scenario”. Is this test suppose to be used to try and make the crisis appear worse and get the American people’s support behind nationalization? Why run a test? Isn’t the current economic crisis enough of an example? How much worse do they want this to go? I use the word “want” because this crisis is becoming something that the government is adding to and making worse.
Fox News also reports, “The official said that any new mandated additions to a bank’s capital will be ‘a temporary thing,’ supplementing existing rules for capital levels. ‘It’s not a [permanent] change in capital requirements,’ the official said.” What in the world is going on here? And now for some revelation of truth, “The official acknowledged that nationalization remains a policy option of last resort for the administration and regulators, because they have ‘always’ pledged to ‘do whatever it takes’ to stabilize the financial system — the Bush Administration used it to take over Fannie Mae (FNM: 0.52, 0, 0%), Freddie Mac (FRE: 0.54, 0, 0%) and American International Group (AIG: 0.5389, 0, 0%) last year in September, before Congress approved the $700 billion TARP, with its various new policy tools, in October. But the official, expressing frustration with market speculation last week, emphasized repeatedly that regulators ‘are not going to nationalize.'”
I decided to review exactly what it was that White House Spokesmoron Gibbs said about nationalization and upon further review, it is apparent that the administration never ruled out nationalization of banks. This is just another case of double-speak coming out of the adminstration. Here is what Gibbs said, “This administration continues to strongly believe that a privately held banking system is the correct way to go, ensuring that they are regulated sufficiently by this government.” When pushed to say if the adminstration would clearly come out against nationalization Gibbs responded, ” It’s hard for me to be clearer than where I just was.” There are the catch phrases, ensuring and regulated sufficiently, that prove that no matter what they tell us, they already are running the banks. If you are telling the banks exactly what they can do and providing them with capital, you are running them.
They think we are such fools. Forty percent nationalization is nationalization!