Against Nationalizion

(A reply to a post on Big Picture blog by me)



I have to disagree with the nationalizing talk. I may be the only one out there that still believes in capitalism and the need to step back and really think before we throw more money at these banks (and now home builders, schools, realtors, steel factories, car makers, auto sellers, porn industry, etc). I am not some crazy “ let them eat cake” type, but there comes a time when companies that continue to make bad decisions must fail.

I was (and am) in favour of short term government assistance, especially when there could be systematic failure of the banking or investment system. For example the Treasury and Fed needed to assist and sure up the contra-party risk with Bear Stearns, if they did not the freezing of trading could have halted investments world-wide. Possibly the AIG investment was the same (not really convinced of that). However, I believe we should not create a system were the government will ride in on a white horse to save sick industries. It makes a bad precedent and the firms (investors) who ran their companies correctly will not get rewarded.

There is a difference between a safety net and a guarantee you can’t fail. We learn from our failures and make us stronger, not only as companies but as people and a nation...nationalization will not help anyone learn not to make these mistakes again.



posted by Peter Greene