And, to his credit, he gives a pretty sane and sober explanation of what nationalization entails. The problem, as he rightfully describes it, is that the banks are insolvent due to the toxic assets weighing down their balance sheets. But you can't get the toxic assets out of their balance sheets because no one can agree on their value. So "what we do," Krauthammer says, "is we acquire the whole bank. We break it up and we sell off the good stuff, and then the government ends up with the toxic assets. It creates, essentially, a bad bank." It's worth pointing out that this is no fun for the government. Generally, when nationalization is mentioned, it means the government is trying to take over something awesome that will bring them revenues and enhance their power: The oil industry, say. This is quite the opposite: The government may be forced to take over something insolvent that costs them a lot of money and leaves them with a lap full of worthless assets. It's the difference between taking something over that will increase federal money and power and taking something over that will decrease federal money and, through that, power.
