Obama Needs to Nationalize

Update II: Krugman - "Nationalization is actually as American as apple pie."

Update: Time Magazine - "According to Reuters, there are over 8,300 FDIC-insured banks in America. Last August, dour economist Nouriel Roubini told Barron's that 1,400 banks in the U.S. would eventually fail."

The Obama administration can pivot fast, but there is no doubt that Wall Street and policymakers (some of whom are being earnest) want more specificity on how Obama will manage the bank bailout plan.

As part of the American Recovery and Reinvestment Plan, Obama needs to move decisively on the bank bailout with lots of a details, clear timeliness and delineated scope in a manner that would make project management professionals proud.

Treasury Secretary Timothy Geithner didn't provide any of that yesterday.

As David Mizner at Daily Kos notes, one suggestion that is growing among our top economists is: Nationalize the banks we now subsidize. See Krugman, Stiglitz, Roubini, Taleb, Baker Agree: Nationalize.

The voters don't care about free market ideology (such as it is) and what the pundits will say to nationalization: They want decisive action now as bleeding jobs turn the futures of Americans bleak.

As Krugman writes this morning, "And the argument that our culture won’t stand for nationalization — well, our culture isn’t too friendly towards bank bailouts of any kind. Yet those bailouts are necessary; and even in America they may be more palatable if taxpayers at least get to throw the bums out. Oh, and not a week goes by without the FDIC taking several smaller banks into receivership. Nationalization is actually as American as apple pie."