Nationalization Follies: Manchester United (States)
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James Joyner | Friday, January 23, 2009 |
Tom Smith is certainly in the running for Most Depressing Blog Post of the Day honors for this observation:
The U.S. is now taking giant leaps down the road to state capitalism. That’s like socialism, only worse. Just think of it as the worst parts of both systems. Socialism for rich people. Capitalism with lots of regulation and high taxes for everybody else.
Kevin Drum is more cheerful about this development:
With all the talk of bank nationalization in the air, I’d just like to point out something directly that usually gets mentioned only in passing: we’ve already done a whole lot of nationalizing. Even if you don’t count the forced takeover and sale of outfits like Wachovia, Washington Mutual, Countrywide, IndyMac, and Bear Stearns, the fact remains that we’ve already nationalized three enormous financial institutions: Fannie Mae, Freddie Mac, and AIG. We just don’t like to call it that.
[...]
And one more thing while we’re on the subject: Since you, the American taxpayers, are now the owner of AIG, you’re also the main sponsor of the Manchester United football club. The last time I mentioned this, the season was young and our club was mired in 14th place. But I’m happy to report that since the U.S. takeover of AIG in September, our plucky lads have been playing well and Man U now leads the Premier League. Who says nationalization is bad for business?
Well, Tyler Cowen, for one.
The more general point is that nationalizing AIG, or quasi-nationalizing AIG, hasn’t solved the basic problems there. Nationalization is hardly to blame for these problems, but the post-collapse AIG has been a mess, bleeding money and lacking accountability. You might claim: “they didn’t nationalize it the right way” and maybe they didn’t. Still, once you proceed down the nationalization path, you have to live with the nationalizations you will get, not the nationalizations as a professor might recommend they be done. The AIG transition was overseen by Bernanke and Geithner and of course Congress isn’t nearly as smart or as well-informed as those two guys.
Of course, one might argue, neither were the capitalists running AIG, et.al.
Photo by Flickr user 99 James Nguyen under Creative Commons license.
About the Author: James Joyner is the publisher of Outside the Beltway and the managing editor of the Atlantic Council. He's a former Army officer, Desert Storm vet, and college professor with a PhD in political science from The University of Alabama. He lives just outside the Beltway in Alexandria, Virginia with his wife and infant daughter.
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Still, once you proceed down the nationalization path, you have to live with the nationalizations you will get, not the nationalizations as a professor might recommend they be done.
I think he should have gone with:
Still, once you proceed down the nationalization path, forever will it dominate your destiny, consume you it will, as it did Paulson and Bernanke.
Also, I want American flags on Man U's uniforms dammit!
Of course, one might argue, neither were the capitalists running AIG, et.al.
I'm extremely hesitant to call those...rent seeking scum capitalists. Its an insult to capitalists.
Further, under capitalism if you aren't good are running AIG...AIG ceases to exist.
Also, I want American flags on Man U's uniforms dammit!
i second that! mostly bc of the angst the brits would feel at seeing that. ooooh the hilarity.
For another country's experience, see this article in the NY Times: Sweden’s Fix for Banks: Nationalize Them. Of course, our problem is much larger, that country is much smaller, they're European (so what would expect), etc. Still, what they did and it's success is interesting.
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