New York Times Publishes Socialist Cry to Nationalize the Big Banks
The New York Times may develop a case of the vapors when a conservative calls Barack Obama a socialist, but they certainly aren't uncomfortable with socialist arguments. At the top of Monday's op-ed page, opposite Paul Krugman was an article titled "Wall Street Is Too Big to Regulate."
Professor Gar Alperovitz, author of "America Beyond Capitalism," had his argument summarized in the pull quote: "Banks are larger than ever. Don't try to control them. Nationalize them." He also claimed this is a "market-friendly" step:
With high-paid lobbyists contesting every proposed regulation, it is increasingly clear that big banks can never be effectively controlled as private businesses. If an enterprise (or five of them) is so large and so concentrated that competition and regulation are impossible, the most market-friendly step is to nationalize its functions.
What about breaking up the banks, as many on the left favor? Recent history confirms another Chicago School judgment: while a breakup might work in the short term, the most likely course is what happened with Standard Oil and AT&T, which were broken up, only to essentially recombine a few decades later.
Nationalization isn’t as difficult as it sounds. We tend to forget that we did, in fact, nationalize General Motors in 2009; the government still owns a controlling share of its stock. We also essentially nationalized the American International Group, one of the largest insurance companies in the world, and the government still owns roughly 60 percent of its stock.
Of course, it would probably take another financial meltdown to make banking nationalization politically tenable. But given how the sector has behaved since the last crisis, a repetition seems inevitable, and sooner rather than later.
Alperovitz recently offered the keynote address at the 2012 Green Party convention in Baltimore, where he declared:
Think about this, the top 400 people—not percent, people, 400—own more wealth now than the bottom 185 million Americans taken together. That is a medieval structure. I don’t mean that rhetorically. I don’t mean that rhetorically. I mean that technically. That’s the way you concentrated wealth in the medieval era, really.