The topic of bank nationalization, albeit temporary or labeled as “preprivatization,” is starting to pick up some steam. In a piece from Sunday Paul Krugman offered a pretty concise explanation for why some form of nationalization is necessary for “zombie banks” like Citi and Bank of America to survive. It’s a worthwhile read, particulalry for those who recoil at the term nationalization and its red connotations.
I have yet to hear a compelling reason why taxpayer dollars should go to bank shareholders without substantial return on that investment. Unless Paul and I are missing something nationalization seems the only way to resolve this issue.