This should be the message that everyone on dkos communicates to Obama.
We won’t know how many toxic assets are actually out there till Obama does. We still have no idea how many toxic assets are on Bank of America and Citibank's books.
Till he nationalizes them and reveals just how many toxic assets are out there, the markets will fluctuate like crazy because not knowing is always much worse than just getting the bad news out once and for all and getting it over with.
Do it quickly, clean up the books, expose the toxic assets for all the world to see, and turn them around to private hands quickly. It will restore lending faster than anything we're planning right now.
We're going to deal with these assets at some point. Lets rip off the band aid and get the pain over with as fast as possible, so that we can begin the recovery process.
We will end up effectively nationalizing them anyways. The longer we wait, the more it will cost. Go big, go early and you can solve the problem and get the economy moving relatively quickly. But an incremental approach only lets things worse and worse, worse than they need to get, and delays the recovery process.
That is just one of many reasons why Bank of America and Citibank need to be nationalized asap. Many more can be found in Paul Krugman's article on precisely this same issue. And I challenge anyone to come up with even a single reason why they shouldn't.
So Obama, stop worrying about how republicans will accuse you of being a socialist and start doing what needs to be done to fix this economy and get it back moving again as fast as possible. This is bigger than politics. The government nationalizes small banks fairly often. There is nothing wrong with going one step further at a time like this.
Update 1: Earthling pointed to yet another excellent article on the benefits of nationalization...
The State of California can charter its own bank and issue its own checks to all state employees . . . . It can also pay all its vendors, contracts and contractors through the bank . . . . Additionally, once the bank is operational, you can fund your own state projects and you determine the interest rate paid as opposed to being at the mercy of the banks you currently deal with or the interest rates the investment bankers make you pay to issue bonds. By doing this, you will put the state in control of its own destiny and make it the benefactor of its own money.
". . . What I am proposing is not new. It has been done by one other state in the nation [North Dakota]. Why should you continue to pay the banks for services and interest on loans when you can receive that interest for the benefit of the state of California? Wouldn’t it be better if you could fund your own infrastructure projects without having to get the approval of independent banks or investment bankers? Additionally, you set the interest rate on your own projects. You can even set it at zero if you deem the project worthy enough."
http://www.opednews.com/...
http://www.yesmagazine.org/...