Ever since banking stocks started plummeting, or should I say replummeting, a couple of weeks ago there’s been renewed interest in nationalization. In some ways the question is pure semantics. Ever since Henry Paulson gathered banking CEOs at the Treasury Department last year and told them that the government was going to stick capital injections in their aching behemoths, we crossed a line that involved partial government ownership. Even as they beg for more handouts, the bankers are, not surprisingly, resisting the idea. Yesterday at the World Economic Forum in Davos, Jamie Dimon, the head of JPMorgan Chase, denounced all the nationalization talk. “JPMorgan would be fine if we stopped talking about (the) damn nationalization of banks … we’ve got plenty of capital,” Dimon said. And Treasury Secretary Tim Geithner decried the term yesterday, too. I think Dimon and Geithner are basically right in the sense that we’re not going to full nationalization and its a distracting term. Utilities are the better model.
This is a companion discussion topic for the original entry at https://talkingpointsmemo.com/?p=146519