Comrade Obama to Make Bank Nationalization Official
Wow I’m really shocked. The federal government is using the financial crisis to enlarge its power over the private sector. The NY Times reports:
President Obama’s top economic advisers have determined that they can shore up the nation’s banking system without having to ask Congress for more money any time soon, according to administration officials.
In a significant shift, White House and Treasury Department officials now say they can stretch what is left of the $700 billion financial bailout fund further than they had expected a few months ago, simply by converting the government’s existing loans to the nation’s 19 biggest banks into common stock.
Converting those loans to common shares would turn the federal aid into available capital for a bank — and give the government a large ownership stake in return.
Meanwhile, some other of our top economic thinkers in this country are baffled (here and here). And let’s not forget poor Larry Kudlow, who loved the TARP when Paulson proposed it, since we taxpayers would make so much money on the deal.
Why is this so surprising, fellas? Just for a fun intellectual exercise, pretend for a moment that the politicians and bureaucrats in DC care about power, rather than getting a single mom in Boise off unemployment. Now in that mindset, look back at everything the feds have done since last September. Makes perfect sense, doesn’t it?
