User 271458

Time Not for a Bailout, But for Nationalization

Nationalization? Like Zimbabwe? Like Venezuela? This is the most ludicrous of all three options. Socialism has proved to be a spectacular failure, and Sweden since becoming more and more socialist over the last 40 years, has gone from strong growth to pure mediocrity. These classroom theorists are the types that push intill communism. From his article:

"grants the Federal Reserve Board the power to take any financial firm whatsoever with liabilities and capital of more than $25 billion that is not well capitalized into conservatorship,
requires the Federal Reserve Board to liquidate any financial firm in its conservatorship when it judges that the firm is insolvent (paying off in full or not paying off in full the liabilities of the firm at its discretion), unless
the Federal Reserve Board finds that preservation as a going concern is in the interest of the taxpayer, in which case Congress
grants the Federal Reserve Board the power to transform equity stakes in the firm into junior preferred stock at par value and then transfer ownership and custody of the firm to the Treasury,
requires the Federal Reserve to terminate conservatorship if the firm becomes well-capitalized once again."

In a nutshell: If the firm is profitable, the owners benefit. If it's about to take losses, then the taxpayer (that's you) pays. This invites for excessive risk taking (if you know you're going to bailed out for failure, you might take a few extra risks, eh)?

It is stunning that some people never seam to learn their history, and learn what a failure nationalization is. Like communism, it sounds good on paper, and some people are probably scratching their heads reading this, saying "wow! what a plan!" Uh huh.