by: Stewart A. Alexander
StewartAlexanderCares.com

March 7, 2009

Former Federal Reserve Chairman Alan Greenspan thinks it’s necessary to temporarily nationalize some banks. Federal Reserve Chairman Ben Bernanke in recent statements has indicated that the nationalization of some banks may be necessary under certain conditions, and many economic analysts believe nationalization is only a matter of time; however, socialists nationwide say nationalization of all U.S. banks is now necessary to achieve a national economic recovery.

Socialists strongly disagree with Alan Greenspan and the banking analysts on several points; socialists believe any move to nationalize the banking industry should be permanent and should be kept out of the hands of private investors. Socialist Party USA, a nationwide socialist party, is calling for all banks, financial institutions and insurance institutions to be socially owned and operated by a democratically-controlled national banking authority.

Socialists are also opposed to any bank bailouts and bailouts for the insurance industry. Socialist Party USA says, for the present “it is necessary to re-regulate the banking and insurance industries” to resolve the financial chaos facing these two industries

During July 2007, the failure of Indymac Bank sent shock waves throughout the financial markets and was a wake up call to the nation how serious the crisis is for the U.S. banking industry. Indymac Bank made risky loans during the home mortgage boom; unfortunately, those risky loans took the mortgage giant from boom to doom. Many other banks have now become victims of their greed for profit and time is quickly running out for a quick recovery; just as Indymac Bank, large and small banks are standing in line to collect on their losses from working people with a series of government bailouts.

Many nationalization advocates believe the government should seize some of the nation’s big banks, to include Bank of America, Citigroup and Wells Fargo; breaking up these banks and selling them to the private sector. However, socialists believe the U.S. government must nationalize all U.S. banks while opposing the idea of selling off the assets of banks to private investors. Socialists are also concerned that the good assets that will generate profits will be sold to wealthy profiteers while the American taxpayer will be left holding the bag of bad assets.

A major challenge for the Obama administration will be resolving the present banking crisis that is systemic of the global financial crisis. Similar to the situation facing AIG, American International Group, the insurance giant, most of the larger banks are deeply tied to investments throughout the global economy; resolving the U.S. banking crisis will require a global approach.

Only this week, British Prime Minister Gordon Brown met with President Barack Obama and addressed a joint meeting of Congress; Gordon Brown emphasized the importance for the U.S. to work with other European countries to help resolve the present world banking crisis. Brown also cautioned against U.S. protectionism; referring to protecting U.S. financial markets.

Prime Minister Brown will be chairing a G-20 economic summit in London next month and Brown’s visit to the U.S. is helping to lay the ground work for a global economic recovery. Brown is also hoping to gain support from the international community to establish new standards for international banking that will meet the needs of advance and developing nations; a world banking system that would improve accountability and transparency.

Socialists believe it is most important to have a nationalized banking system that will accommodate the needs of working people; a 21st Century banking system that is not a model of 20th Century banking which was only a benefit to the capitalist ruling elite and a system that has repeatedly failed to meet the long term needs of working class people.

For more information search the Web for: Stewart A. Alexander; Capitalists Attempting to Redefine Socialism.

socialistparty-usa.org/statements/financialcrisis012509.html
www.socialism.com/fsarticles/vol29no2/economy29201.html

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