Via Think Progress comes a Newsweek survey showing the American people have become a nation of Marxists. The pollsters asked:That's a majority for the Marxists. "It appears that the Obama administration has thus far resisted nationalizing the banks because it views that option as not politically viable," says Think Progress. This poll would, of course, undermine that. But I'm not sure that Obama's objection to nationalization is a simple case of political caution. The Obama administration has voiced more concern with their capacity to successfully nationalize the banks then with their ability to sell the public on temporarily nationalizing the banks. The fullest statement we've seen on this came from Obama's interview with ABC News:Temporary nationalization is another way for the federal government to deal with large banks in danger of failing. This is where the government takes over a failing bank, cleans its balance sheets, and then quickly sells it off. In general, which do YOU think is the better way to deal with failing banks…29 Government financial aid WITHOUT any government control of the bank, OR56 Nationalization, where the government takes temporary control?11 Neither/Other (VOL.)4 (DO NOT READ) Don’t know
Sweden, on the other hand, had a problem like this. They took over the banks, nationalized them, got rid of the bad assets, resold the banks and, a couple years later, they were going again. So you'd think looking at it, Sweden looks like a good model. Here's the problem; Sweden had like five banks. We've got thousands of banks. You know, the scale of the U.S. economy and the capital markets are so vast and the problems in terms of managing and overseeing anything of that scale, I think, would -- our assessment was that it wouldn't make sense...what we've tried to do is to apply some of the tough love that's going to be necessary, but do it in a way that's also recognizing we've got big private capital markets and ultimately that's going to be the key to getting credit flowing again.As Felix Salmon said at the time, "this is as clear and well-argued a case for not nationalizing as you could hope to get." It wasn't the argument you make when you think nationalization polls badly. It was the argument you make when you've been convinced that nationalization is probably a bad idea, or at the least, has a high chance of failure. The evidence we have is that Obama has been persuaded that the private capital markets will go catatonic if the government assumes control of the banks. He may be wrong about that. And he may eventually give up on that objection as events overwhelm the possible alternative solutions. But this does not seem a simple case of poll-driven caution. Towards the end of today's interview with the New York Times, he complains that blogs have given people the impression that "somehow there’s a clean answer one way or another — well, you just nationalize all the banks, or you just leave them alone and they’ll be fine.” His frustration does not seem to be that the public is insufficiently convinced of the merits of nationalizing the banks. Quite the opposite, actually.
