There is no use pussyfooting around the issue; it is bad that it is happening and bad that so many people believe that it should happen. I don’t think that it is the end of capitalism by any stretch of the imagination–and find the schadenfreude of various left-of-center commentators laughable on that score–but the process certainly does not fill me with the warm fuzzies.
A whole host of economists weigh in on the bank nationalization scheme here. Needless to say, I find the most agreement with economists like Kashyap and Rajan. I disagree with Rogoff, but I still want to play chess with him. Brad DeLong laments that the government does not get voting common stock and also wants fiscal stimulus. To which, one responds with a weary “quelle surprise.” One could, of course, also respond with something unprintable, but since one ought not to print the unprintable, I will refrain from going there.
Incidentally, a key question to ask people like Barack Obama is whether they will commit to de-nationalizing the banks as soon as is possible. We know that most Republicans will be temperamentally inclined to swiftly release the fetters on the free market. The question is whether most Democrats would be willing to follow the Republicans’ lead, given that Democrats are very much the party of Big Government. If the answers to these questions are even so much as equivocal, those who worry about the overwhelming power of government ought to think twice before they commit to voting for Obama. As Barry Goldwater rightly (no pun intended) said, “A government big enough to give you what you want is also big enough to take it away.”