Why Not Just Nationalize?

OK, so let me get this straight.  When banks lose a ton of private money because their employees made a ton of bad investments, the government bails them out with taxpayer dollars.  And when those banks start to make profits again, they start to pay their employees huge bonuses like they did before those (mostly) same employees made their horrible money-losing bets.  The public gets outraged and wants to do something to capture more of the bank profits or otherwise limit banker bonuses.  Just today, the WSJ tells us, the “Obama administration is considering levying a fee on banks to recoup more of the taxpayer funds spent to rescue the financial system.”

So, if the government provides taxpayer money when banks lose money and takes extra money when those banks are profitable, how is that different from the government owning the banks?  Why don’t we just cut out the middleman and make them public entities?  Or here is a better idea — how about if we don’t give taxpayer money to people who make bad investments and let them prosper or fail with their own money?

One Response to Why Not Just Nationalize?

  1. Greg Forster's avatar Greg Forster says:

    Reminds me of a Dilbert strip I saw a month ago:

    Dilbert: Here’s your hundred dollar check, Dogbert.

    Dogbert: Excellent. Here’s yours.

    Dilbert: Thanks! Say, next year we should just set up an electronic funds transfer.

    Dogbert: Great idea. (Pause) Or we could, you know, stop exchanging Christmas presents.

    Dilbert: Stop your crazy talk!

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