Results 1 to 8 of 8

Thread: President Obama looking at Swedish banking model; repugs coming onboard

  1. #1
    Friend of Gossip Rocks! buttmunch's Avatar
    Join Date
    Oct 2005
    Location
    Uranus
    Posts
    31,885

    Default President Obama looking at Swedish banking model; repugs coming onboard

    Long regarded in the US as a folly of Europeans, nationalisation is gaining rapid acceptance among Washington opinion-formers – and not just with Alan Greenspan, former Federal Reserve chairman. Perhaps stranger still, many of those talking about nationalising banks are Republicans.

    Lindsey Graham, the Republican senator for South Carolina, says that many of his colleagues, including John McCain, the defeated presidential candidate, agree with his view that nationalisation of some banks should be “on the table”.

    Mr Graham says that people across the US accept his argument that it is untenable to keep throwing good money after bad into institutions such as Citigroup and Bank of America, which now have a lower net value than the amount of public funds they have received.

    “You should not get caught up on a word [nationalisation],” he told the Financial Times in an interview. “I would argue that we cannot be ideologically a little bit pregnant. It doesn’t matter what you call it, but we can’t keep on funding these zombie banks [without gaining public control]. That’s what the Japanese did.”

    Barack Obama, the president, who has tried to avoid panicking lawmakers and markets by entertaining the idea, has moved more towards what he calls the “Swedish model” – an approach backed strongly by Mr Graham. In the early 1990s Sweden nationalised its banking sector then auctioned banks having cleaned up balance sheets. “In limited circumstances the Swedish model makes sense for the US,” says Mr Graham.

    Mr Obama last weekend made clear he was leaning more towards the Swedish model than to the piecemeal approach taken in Japan, which many would argue is the direction US public policy appears to be heading.

    “They [the Japanese] sort of papered things over,” Mr Obama said. “They never really bit the bullet . . . and so you never got credit flowing the way it should have, and the bad assets in their system just corroded the economy for a long period of time.”

    Administration officials acknowledge that the rescue plan unveiled by Tim Geithner, Treasury secretary, last week could result in the temporary nationalisation of some weak banks.

    The plan sets out a framework for revealing the extent of the likely credit losses facing banks. Most private sector analysts believe the exercise will reveal that some banks have large capital shortfalls.

    Policymakers acknowledge that if this is indeed the case, it will be difficult for those with the largest shortfalls to raise the required equity from the markets, in which case the government would probably have to take temporary control. Moreover, while nationalisation remains taboo in some political circles it is increasingly openly discussed among past and present economic policymakers of all leanings.

    “In this country nationalisation of some banks – not the whole banking sector – should be a last resort, but it should definitely now be on the table,” said David Walker, head of the pro-free market Peterson Institute and a former senior official in the George W. Bush administration.

    The time for biting the bullet may also be fast approaching.

    In early April, big institutions will publish their first-quarter results. If the intervening Treasury stress tests have not by then revealed the true state of their balance sheets, then their first-quarter results may do so.

    “The first week in April – that’s when the children’s party is over,” says Chris Whalen, co-founder of Institutional Risk Analytics. “That is when the obvious will become apparent.”

    The Obama administration remains opposed to federal control. Mr Geithner last week said: “Governments are terrible managers of bad assets.”

    Others say he may eventually face no choice. “The danger we face is a Freddie Mac/Fannie Mae scenario where government gives the banking sector guarantees and then socialises the losses,” says Adam Posen, an economist. “That’s the worst thing we could do.”FT.com / US / Politics & Foreign policy - Bank nationalisation gains ground with Republicans

    Interestingly, Sweden has been mocked and criticized for it's odd brand of slight socialism yet the OECD is predicting it will weather the economic storm better than most countries.
    'Those who sacrifice liberty for security deserve neither.' Ben Franklin

    "When fascism comes to America, it will be wrapped in the flag and carrying the cross."
    --Sinclair Lewis

  2. #2
    Elite Member ana-mish-ana's Avatar
    Join Date
    Feb 2008
    Posts
    3,200

    Default

    There is talk here in the UK - that we will follow in the same footsteps as well. It is ironic that the Repubs are supporting this lol

  3. #3
    A*O
    A*O is offline
    Friend of Gossip Rocks! A*O's Avatar
    Join Date
    Oct 2005
    Location
    Being Paula
    Posts
    30,396

    Default

    Oh good, Alan Greenspan thinks it's a good idea. He's the architect of this global economic fuckup in the first place.
    I've never liked lesbianism - it leaves a bad taste in my mouth
    Dame Edna Everage

    Just because you're offended doesn't mean you're right.

  4. #4
    Elite Member Grimmlok's Avatar
    Join Date
    Oct 2005
    Location
    In WhoreLand fucking your MOM
    Posts
    55,372

    Default

    What does paul krugman think?
    I am from the American CIA and I have a radio in my head. I am going to kill you.

  5. #5
    Elite Member MohandasKGanja's Avatar
    Join Date
    Apr 2008
    Location
    Wherever my kids are
    Posts
    25,726

    Default

    I would be interested in what Paul Krugman thinks, too.

  6. #6
    Elite Member kingcap72's Avatar
    Join Date
    May 2007
    Location
    10 miles from Pootie Tang
    Posts
    21,909

    Default

    Krugman thinks that the stimulus bill isn't nearly enough cash to get the job done, and he says we'll probably end up having to push through a second stimulus bill. He didn't say anything about the Swedish banking model when they interviewed him.

  7. #7
    Elite Member bychance's Avatar
    Join Date
    Jul 2007
    Location
    New York
    Posts
    5,294

    Default

    OBAMA IS BRINGING US TO SOCIALISM!!!!!!!!!!!!!!!!!!!!11111111

    Get ready for the U.S.S.A guys.

    /I actually read that somewhere.

  8. #8
    Elite Member MohandasKGanja's Avatar
    Join Date
    Apr 2008
    Location
    Wherever my kids are
    Posts
    25,726

    Default

    Krugman is thinking of temporary bank nationalization. Excerpt from an article:

    Nobel-winning economist and New York Times columnist Paul Krugman was one of the first to note that Geithner’s new financial rescue plan does not rule out nationalization. Krugman points to Geithner’s "stress tests" as a possible first step in the temporary government takeover of crumbling banks:

    "Will those public-private partnerships end up being a covert way to bail out bankers at taxpayers’ expense? Or will the required “stress test” act as a back-door route to temporary bank nationalization (the solution favored by a growing number of economists, myself included)? Nobody knows."
    Krugman notes in a following column just how quickly the idea of nationalization is picking up steam, even among conservatives:

    "There’s hope that the bank rescue will eventually turn into something stronger. It has been interesting to watch the idea of temporary bank nationalization move from the fringe to mainstream acceptance, with even Republicans like Senator Lindsey Graham conceding that it may be necessary."

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. Children love President Obama
    By MrsMarsters in forum Laughs and Oddities
    Replies: 15
    Last Post: February 3rd, 2009, 03:45 PM
  2. Guess who's coming to dinner President Obama: Sarah Palin
    By kingcap72 in forum U.S. Politics and Issues
    Replies: 7
    Last Post: January 30th, 2009, 10:08 AM
  3. Repugs not hiding their racism anymore: Barack Obama is 'uppity'
    By buttmunch in forum U.S. Politics and Issues
    Replies: 36
    Last Post: October 22nd, 2008, 09:44 PM
  4. Touch decision coming (Barack Obama and ties to Fannie Mae)
    By tkdgirl in forum U.S. Politics and Issues
    Replies: 8
    Last Post: September 19th, 2008, 04:36 PM
  5. Rev. Wright to Barack Obama: Coming after you
    By witchcurlgirl in forum U.S. Politics and Issues
    Replies: 10
    Last Post: April 29th, 2008, 10:27 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •