Nationalize Broken U.S. Banks

I'm curious if Mr. Lehrer was ever on hold with a major corporation's support service after they make a mistake on his account and refuse to correct it. Most major companies today make the DMV look like the model of efficiency and accuracy.

There's this ridiculous meme from the 1980s that the government is always bad and only stupid people work in the public sector as if there are no bad apples or incompetent managers running things in Corporate America. All chanting this meme does is show that the person's thinking is set in a 30-year-old framework and is based first and foremost in ideology rather than fact. Any organization with too many layers of management and too many rules and regulations is slow and inefficient. Companies are not magically better then government in running things by virtue of being companies.

That said, nationalizing troubled banks instead of letting them take their lumps and learn from their mistakes is counter-productive. While America is far from a socialistic country, banks in the U.S. seem to enjoy a perverse, backward form of socialism in which they run to the government for a bailout when they've made another mess. The government becomes a piggy bank and a safety blanket.

The most troubled banks should be broken up, and giant mergers should be prohibited in the future.

First, I would fully agree with "random" about mentality and views of an author being very one-sided and outdated.

Second, I would like to recall that bailout targets are mainly big banks--those that are "too-big-to-fail." Therefore, I would partially agree with "sam" that banks should be broken down, but before such financial instability, not as a cure for it. Smaller banks will not be tempted to seek government support and would be more conservative--but even if some of them will fail, it won't bring so much risk. Overall, moral hazard will decline--I mean there will be fewer big banks that will be aggressive, knowing that they will be backed by government in case something goes wrong.

Third, merging bad banks with good ones only makes the new mixed bank less competitive--as the bank, instead of considering internal improvements, will be 100% overwhelmed with finalizing M&A; transactions for quite some time.

Fourth, I believe that those who link nationalization directly to socialism are outdated-minded people. I believe that some sociologist and economist would be in better position to come up with more authoritative references on this issue.

Fifth, I have seen (in my experience) cases when government-owned banks produced better results than their comparable-sized private counterparts. I have researched this subject for more than two years. If anyone is interested in that, I can supply a shortened version of it (in case of one emerging country).

Sweden came out of the Great Depression in 1935, the first to do so--in only 5 years. They took over banks in the early 1990s, then sold them back to investors--within 5 years, "nationalization for a temporary period." Swedes enjoy a nice balance of capitalism and socialism. One family-the Wallenbergs--ensure private enterprise, like Volvo, Saab, Electrolux, Ericsson, IKEA, H&M;, and many others of global significance. In a country with a population the same as Los Angeles County. We should look to Sweden's model and practices for guidance in our current financial tailspin --maybe we can emerge from Great Depression 2.0 in 5 years. Rather than 10 years or more as under FDR. And all Swedes are covered with health insurance. My HMO--a private enterprise--does a great job of administering Medicare. Universal Medicare would be a great idea.

I agree with you Sam, that unfortunately, the large banks should be broken up; haven't we learned that "too big to fail" means that when they fail, they bring disastrous losses and inevitably massive amounts of our tax dollars have to be spent to prop them up while they don't try to fix the problem but hoard the money they receive? I'm tempted to just say let them fail and let everyone learn a lesson from this mess. There are still a lot of smaller banks that are financially healthy and strong with good balance sheets, and are still lending, which proves that all banks are not as greedy as others that take on too much risk and can be run in a matter that allows them to profit and lend while keeping depositors' money safe, even though the FDIC backs the deposits, up to a certain amount.

There is no such thing as "too big to fail." It's an excuse to keep certain banks in play based on ridiculous notions of tradition and familiarity. If a going concern is losing money and needs to wind down, let it. Let the system work by allowing smaller players to come in and buy assets that fit the smaller banks' business models. Government should also properly define the market failure before it spends taxpayer money. The last time I checked, banks still want to lend and there are consumers still willing and able to borrow.

Alton E. Drew
www.altondrew.com

You're kidding, right? Nationalize the banks? Have the government take over? Only someone on crack would think this is a good idea.

Let the markets work themselves out, painful though it may be. Mergers, Chapter 11 filings, and reorganizations may seem messy but, in the end, they are the most efficient ways. With all due respect to Reagan, "government intervention is not the solution; government intervention is the problem."

No company should be allowed to become "too big to fail." Any such companies should be treated as if state owned. The bigger the company the more "government like" it becomes.

Yes, they should be nationalized and relaunched with new capital.

What ever happened to bankruptcy?

Missing from the above posts is the fact that Congress itself created the subprime requirements "to provide opportunity for the unqualified buyers," lawyers (like Obama did) sued banks to make them underwrite subprime loans, and Congress (Democrat "leaders") refused to allow any reform of the loopy rules.

Obama considers himself the ruler of the country, and if this government got its hooks into a bank to call its own, it would predictably do as Mr. Lehrer says, and use the bank to further its socialist goals, including throwing away billions of dollars to "combat global warming," even if no good would come of it.

It would be a disaster if this particular administration ever got command of a bank.

We should all realize that the government has already given more money to the big banks than what the banks are worth. Technically we, the taxpayers, already paid for those banks. We should complete the buyout process by appointing a trustee who can override any decision of the boards, and who will make sure banks start lending money to businesses and house buyers again and not hoard all the bailout money. If that government trustee does not know how to run a bank, that's OK, because at least he or she is forcing that bank to contribute to economic activity.

Socialize the risk and privatize the profits. As someone mentioned earlier, when the banks get in over their heads they come to the government. It would appear that we should dust off the old RTC. Kill the zombie banks; let their shareholders take a haircut. Sell off the remaining assets and be done with it. The shareholder gambled on management, and management performed poorly. There are about 8,000 banks in the country. Let the Fed look at all their books. Then find out which ones are upside down and let them go to that place where insolvent banks go. Do not keep them on life support when they are the walking dead. It would seem to be throwing good money after bad in order to protect shareholders. Which by any other name would be called gamblers. Who have lost their bets that were placed on management.

Just to let the majority of the population know: The Federal Reserve is not in any way the government. It's a private corporation just like Microsoft. Allowing this company (the Federal Reserve) to take over would be detrimental to our economy in the long run.

The following sentence is meant to [confuse] you: "It means the government will manage the bank as a commercial entity, with the intention of selling it back into the private sector." The Federal Reserve is already private sector, When the government wants money, it sends the needed amount in the form of bonds to the Federal Reserve, which then makes that amount in the form of currency. Wake up. Don't believe me -- go to http://video.google.com/videoplay?docid=7065205277695921912.

I think people are missing the point. We need to start looking at the major problem here. Our currency and how it maintains its worth. Our dollar was worth so much because of how little of it there was in circulation. The Federal Reserve "lends" us (the government) the money at interest, ergo inflation, and how do we pay for that interest? Because our taxes sure don't. We need to abolish the Federal Reserve Act for starters.

I'm torn on this issue, because while the pro side has points, any government entity can easily become the lapdog for Congress, who only has eyes on the next election, and not run as a proper commercial enterprise. Just look at the current screams for banks to lend, after Congress lashed them for lending too freely. The con argument was weak, because both government agencies are hamstrung in their operations by existing laws. If the Postal Service was a commercial entity, how long would the little post offices spread all over the U.S. last? You know, the ones that has to have postal employees supporting the small rural communities where there is no way they can do so economically? Or the six day a week delivery schedule that could easily be cut to four, but that would pose some inconvenience, and the politicos in Congress like to only promise gravy, not austerity. Bottom line, I would say pro, but only if Congress was not allowed, in any way shape or form, to interfere. Oh, I forgot, they write the laws now, don't they?

All of these arguments are smoke and mirrors. At the heart of the issue is this: Our financial system built on debt is doomed to fail. For our monetary system to function, there must be an ever-growing amount of debt. We are the most indebted nation on the planet and we are going to print our way to prosperity. You cannot solve problems of excess and greed by borrowing and printing even more excess. See you in the "Greatest Depression."

This country is fast becoming a socialist state. When that happens, democracy fails and therefore the citizens will suffer. I say no to nationalizing banks, and no to the over-reach and ideological government.

Pro.
Why?
The management of the bank must be changed. They made all this happen, so how can we expect that they will fix it?

Why capitalize the gains and socialize the loss? First of all, there is enough blame to go around: consumers for spending what they could not afford, banks for their illusionary profits, and the government for encouraging it. To maintain capitalist society, let the banks go under if need be. GS said they would repay the $10 billion of tarp fund and take no more because of the restrictions on executive compensation. That is a clear message of "hands of government--shut up and give us the taxpayers money so we can take luxury vacations."

How ignorant can those in Washington be? In fact they are not; after all they are ex-Goldman executives and are making sure their counterparts get more than the fair share--forget about consumers, they are too ignorant to understand politics as usual.

Let government nationalize the failed banks. And let government also start new government banks and insurance (general, health, and life). Let there be any number of private banks and insurance companies. This is the best solution for the present scenario. It is not a shame or crime.
srichen

The banking industry is socialized right now. (They are able to survive at all only on the public dole.)

Nationalizing them would simply force them back to their capitalistic roots.

In the meantime, since well run banks not only facilitate healthy commerce but also generate large profits for their owners, we would have the best of all worlds--a growing healthy economy with a reduced need for taxation.

Well, King Obama will get what he and his cronies want, a socialized society. Fanny and Freddy helped dig a hole we'll never fill, and this "great society" is watching its own funeral. Anyone who believes this country is No. 1 is delusional. Atomic arsenals don't make you No. 1, just the bully on the block. Russia keeps moving toward the center and our country keeps moving toward the left to socialism. Somehow we'll meet in the middle and the DNC will finally be happy. It took a while for Roosevelt's ideology to get here.

History provides us with a much more effective approach: Break them up. Standard Oil and AT&T; were broken up with great results, because breakups increase competition, and reduce the size of any failure that might occur. Aren't we grateful taxpayers weren't saddled with propping up Pan Am and TWA? They were small enough to fail, and not allowed to merge.

Remember when banking laws discouraged, if not prohibited, banks from becoming too large to fail? That worked.

MBNA and B of A should never have been allowed to merge. Government should have not allowed mega-mergers. They hide incompetence, destroy wealth, destroy jobs, and just tear up the economy.

Anybody remember the conglomerate craze of the late seventies? Yep, the one that preceded (caused?) the 1982 deep recession? When those conglomerates got broken up, it led to one of the most prolonged expansions in recent history.

The answer is break up the big banks. Sure, it's not easy, but it beats the alternative.

Efficient, smaller banks being forced to compete and maintain solid balance sheets...what a concept.

Behemoths like Citicorp are already insolvent (if they owned up to off balance sheet losses). Either the FDIC shuts them down, or the taxpayer injects new capital.

Mr. Lehrer thinks we should not have voting rights?

How dreadful. Where are the heads rolling? Why do these abysmal, arrogant failures still sit at the heads of these banks? Why do their shareholders still have a single penny?

There is a very dangerous trend beginning to show here. Why is there so little outrage against the Obama intrusion on the corporate fabric? http://pacificgatepost.blogspot.com/2009/02/obamas-salary-cap-red-herring.html

What will this lead to?

The federal government has difficulty anticipating problems--why give it responsibility for managing banks? Especially since they had responsibility for the mess--and ignored people who gave warnings? As many have said earlier, split the banks into smaller units, e.g. into a share-holding for each state, and put each holding and branch up for sale. The best way to sort the mess out is ask healthy banks how they would restore a healthy honest banking system.

Since Americans have long had a negative savings rate, many banks make their money on the spread. The difference between the low interest money they get from the federal government and the money they make on interest for lending it out.

Why even have this sham of a middle man system? Talk about a government subsidized business.

My son has a Ford student loan through the federal government. Simple terms, low interest, no middle man.

I think there should be a separate banking system, or nationalized banking structure, just like this for all loans. At least in a government run system, there is some expectation of public benefit and accountability.

I went to college in the 1980s. I grew up on Milton Freidman and F.A. Hayek, etc. The concept of the magic of the marketplace is "Santa Claus and Easter Bunny Economics." It's been tried for 25 years now. It does not work. How much more dead and discredited can this concept be?

I am ready for a nationalized banking system. More than ready.

Unionize broken U.S. banks.

The plain and simple flaw in all the debate of stimulus and bailout talk is this fact: If by creating money out of thin air, the U.S. economy could have borrowed and spent its way out of any previous problem, it would have. All those problems would have been solved; from poverty to health care to jobs. Simply create the trillions of dollars needed and spend it. Voila, problem solved, right?

Even in the Great Depression, contrary to myth, FDR used the thousands of tons of gold the U.S. held to leverage the recovery and create the dollars injected into the economy and government programs, not fake money created out of thin air. None of those reserves now exist to do the same for the current crisis.

The unfortunate and plain fact is no one person can do such a thing (borrow their way out of previous debt), and the government can't either. The only certainty from the stimulus and bailouts is that they will end in a complete destruction of the financial and economic system of the U.S. and the world rather than an extended restructuring. Those that rationalize otherwise are either totally ignorant of economic reality or certifiably insane.

Desperate citizens and politicians are obviously signing up to support such insanity out of obvious desperation or complete economic ignorance or both. They do so without realizing that the end of the road is a cliff instead of a wooden barrier.

Nationalizing the banks guarantees the destruction of the U.S. economy in the next decade.

As I write out a check to pay my mortgage, I stop and think for a moment: Didn't we already pay these people?

A problem with the "pro" nationalization case study stems immediately from the time period cited. Would the asset portfolio of Illinois Continental that was nationalized in 1984 still rank as the 7th largest in 2009? Probably not even close. So when I hear the TARP proponents say that a bank such as Citigroup is "too big to fail," I wonder if they have it backward. In fact, a bank like Citigroup may instead be too big to continue as is. I have several accounts in a small four-branch community bank. The board of directors consists of well-respected local businesspeople and community leaders. The president will often meet directly with customers, thus providing an immediately accessible face of accountability. And 2008 was their best year on record--with plans for responsible expansion in 2009. Arguments on here as to whether the DMV is better run that Big Corporate America is moot--the real question is this: Why are we trying to solve the banking crisis by making institutions even larger? Nationalizing banks or granting mergers both maintain oversized banks and limit the people's access to "face-to-face accountability." A successful model of banking is already out there: creating more-stable, locally run community banks.

Nationalize. Mr. Geithner's bank rescue plan is a crime against the taxpayer. Anything less than a sweeping (though, of course, temporary) nationalization of the banking system, following the example of Sweden in the 1990s, will mean generations of taxpayers will absorb losses that should be rightly taken by bank shareholders. Nationalization means takeover and restructuring by the government before turning the system back over to the private sector. It is not a radical left-wing solution but a perfectly well-established way to handle this problem in a responsible fashion. It has been done successfully many times the world over--often, ironically, at the request of the U.S. government. The crisis cannot be addressed as a mere "liquidity" problem: the banks are insolvent.

A long time ago far far away before supply side (after first Great Depression), we broke up the giant corporations. Then came supply side economics (Reagan-Bush) and that allowed them to be put back together (and added TARP money) and made even bigger giant banks. We are allowing all the giants to grow again--after the Depression they broke up companies like Standard Oil into many smaller companies and there were things like cheap gasoline because there were many gasoline refineries. Today the oil companies have regrouped into fewer, mega companies, which have been closing refineries for 40 years and just announced they will close more now because of oversupply, which will go away immediately when the economy turns. The giant 5 or 6 mega banks will control world money supply thanks to Regan-Paulson when the smoke clears. Do you think it was a "head-fake" when Paulson got the money and immediately used it differently from the way he asked for it?

Let's take a step back and examine the problem. The problem is that liberals and conservatives alike believe some banks are too big to fail, because that would trigger a run on all banks, so whether the bank is managed well or not, the government feels it has ultimate responsibility to keep those banks alive. If we all agree that a run on the banks is undesirable, then during these difficult economic times the government, acting on behalf of us taxpayers, must take a more active role in managing the too-big-to-fail banks. The government must force banks to lend to businesses that will generate jobs, and it must stop banks from investing in risky derivatives. The banks must not be allowed to hoard money, which is what they're doing as long as they think they are independent. Why? Because that's our money already, given to them in the form of bailouts. We should get that money injected back into our economy. Banks that accept bailout money cannot be allowed to do business as usual. They must be forced to distribute the bailout money back to us in the form of loans that generate jobs. Otherwise don't bail them out if we don't want them to be actively managed by us, the people.

How many billions are in reserve to cover the derivatives in the banks we are giving money to? Are we lending money just to cover the capital reserve requirements imposed on the banks when they have billions that could be lent if "market to market" was done in some other way? Hopefully they will figure out a way to sell some of these derivatives or the mortgages they are based on. I heard one expert say the derivatives could be put back together to get at the underlying assets and sell them in one piece.

This whole article is based on a false premise. The banks are de facto nationalized already. Without continued government funding, they are all broke. If Dad pays for the down payment on the car, cosigns the loan, and pays Junior's allowance so he/she can make the payment, whose car is it really? If this was a true capitalist society, then all the banks would have been seized like they did with the Resolution Trust Corp. and assets sold to the highest bidder. Capitalism is cruel, but it works fast. If normal Americans don't pay their mortgage or car payment, the banks will take them. The banks/bankers/bank investors should lose their assets, too--not be bailed out by us. The government should be guaranteeing people's savings but liquidating all the bad bank assets. This article should read "Why did the government nationalize the banking system?"

Dear Eli,
I don't know if you are aware of this simple fact. What you are afraid would happen if banks were run by the ineffective state has already happened now that banks are privately managed. Actually, much worse, since the banking system would have totally collapsed without the multi-trillion dollar state intervention.

Hi guys,

The problem is not that complicated but the solution is:

Problem #1: We don’t want to repeat Japan’s mistake to let their banks fail in 90 and prolonged the recession into lost decade…so we have to do something with banks now.

Problem #2: No one trusts those bankers anymore, and there is a problem in the current banking/accounting system, and without these being fixed, why do we know to throw taxpayers money into this will fix it? Also even if big banks were saved after this, what guarantees investors around the world will have confidence in our system that will prevent this from happening again?

If to let banks fail is not an option and to count on the bankers to fix their own mess with taxpayer money is not an option either, I do see that to nationalize these banks is the only option left. It will not be a perfect solution to make everyone happy. And there will be a lot of details to be worked out (that involves good bankers). Did government or those bankers cause this? Your pick.

After having already spent $350 billion via Tarp funds the idea of nationalizing banks should not even be a consideration for the government. Have we not seen the nationalization effects from other countries that chose to go down this path, how is Japan doing? France? India? The U.S. banking industry today is one of the most regulated in the country, the housing bubble was caused largely by the government forcing banks to increase lending to the sub prime population. Once a bank is nationalized all decisions on investments must be approved by the government, there is no way that anyone in office can decide which investment is good and which is not. These decisions will most likely be made based on political influence, whoever lobbies most will get the prize. That is probably not a good idea for the future entrepreneurs of America nor any small business.

During the 1990s banks were encouraged to loosen lending by the strengthening of the CRA act, this enabled individuals with insufficient funds to attain mortgages. Fast forward to today and we have the end result of reckless lending for nearly a decade.

Still this could have all been prevented if not for the issuance of FAS157 effective November 15,2007 by the SEC and FASB . For those unaware fair value was redefined. This rule requires banks to mark to market instead of mark to model as previously calculated since the inception of FASB. Pre FAS 157 when an investment vehicle trades thinly (such as mortgage backed securities) the underlying holder of the investment is allowed to use its own assumptions on fair value, today it must be valued based on what it can be sold at in the open market. If I'm a bank and expecting to receive future cash flow of $1000 a month over the next 30 years on an loan of 200K for a total payment of 360k, based on todays fair market value and panic in the market the underlying issue has been written down to 40 cents on the dollar or approximately 80k and this is a conservative figure. This past October the FASB began tracking the effects of this rule to determine if any amendments are needed, a little too late in my opinion.

Back to our banks, in the current market it would not be wise to sell any of the troubled assets based on fair market valuation as there are not enough buyers which drastically reduces the price of the asset.These assets should be removed from balance sheets, by creating a bad bank and transferring assets for 90 cents on the dollar although these assets may very well be valued at 50 or 40 cents on the dollar. By allowing banks to transfer these assets it will improve transparency and most importantly make them investable again. No more capital injections! This move only deters private investors from investing in equity. The higher the purchase price of these assets the higher the relief on the balance sheet of the banks. This would without a doubt improve overall economic conditions at a faster rate than any other solution and also affords the government the opportunity of this plan to cost taxpayers very little or possibly nothing. First, all loans should be returned back to the government which so far has amounted to 350bn. Next step would be for the "bad bank" formation and transferring all troubled assets here. An extra step here could be the banks that transfer assets are also forced to invest in the bad bank and in essence recoup a percentage of the losses but not to profit. A step further would be the government selling a portion of the bad banks to private investors sometime down the road.

If it was my decision I would choose to do nothing and let the game play out the way it should. Many banks would fail, lending would only get tighter and a global recession would still last shorter than nationalizing. Once all the failing players are held accountable and become extinct only healthy banks are left with real balance sheets and the recovery may begin, lending will loosen and so forth begins the next expansion cycle.

While this is not a quick fix lets not forget we are already in this mess and the best solution to minimize the effect of these troubled assets to the economy would be to have them removed from the balance sheet. I don't believe a full recovery is likely in the event of this transfer to the "bad bank," but unless there can be another accounting method to accrue troubled assets only when they mature it's a start to the end of this mess and lets not forget the person asking for the loan is just as responsible as the one providing it.
thevoice@voicedup.com/voicedup.blogspot.com

Banks should be private enterprises that compete for their customers. Banks should protect with deposits with private insurance. Depositors should select which bank to use based on their own assessment of risk and reward.

Good banks will naturally thrive through the beneficence of the free market. Bad banks must be allowed to fail, the same as any other institution that fails to meet customer demands.

The banking problem today is caused by the insidious linkages between big banks and government. Isn't it odd that only large banks are failing? Smaller banks are doing quite well, thank you very much. Nationalizing banks will only exacerbate our problems. Do we really want banks to have the same efficiency as a federal agency? I don't think so.

Eliminate Fannie and Freddie, and change them into a federal holding company. Create a U.S. government stock that pays either a fixed tax-free preferred stock or is taxable and can be traded on a stock exchange. Take this money and lend it to banks at a rate for mortgages. Let the taxpayer have a chance at money instead of having it cost us in the future.

Although I hate big government, I hate it more when my tax money goes to private corporations.

Me thinks it would have been more effective for the government to open a National Bank of America, capitalize it with $700 billion TARP, stay away from all the other "private" banks, and let them go under.

When their assets are being liquidated and sold for fire sale prices, the National Bank of America could purchase these assets (branch offices, mortgage debt), etc. cheaply, plus, they could set targets for lending (e.g., credit score of 650 allows $150,000 home loan, 720 = $350,000 home loan etc, depending on income). Just think, they would have been able to buy the Bear Stearns building for $1. The data center in there alone is worth millions.

After a few years, the National Bank could sell off its assets to whatever private banks want to buy, and the government could liquidate it in an orderly fashion for a profit (since any assets it bought will have been at fire sale prices and not marked-to-model).

Note, I am suggesting that government let private banks fail and go insolvent. The National Bank of America would be able to hire all those employees who lose their jobs from those banks that go under (except the CEOs/CFOs and heads of derivative /mortgage etc. trading).

As I am yet evaluating the pros and cons of nationalizing U.S. banks, I will defer my position to the following question: Are the banks adverse to nationalization? If yes, then I am for it--fully.

Many believe that the first great depression was a conspiracy to consolidate banks and increase national debt. This notion cannot be completely dismissed as there are some decent arguments for it. If such arguments were true, one could suggest that this is being done all over again. Consolidating banks is never a good idea. First, it minimizes competition, and this is never good for consumers. Two, when these guys get greedy again--and they will--the magnitude of the bad debt a larger bank carries will have a larger negative impact on the economy. Wasn't this one bad enough?

I do not understand what is the purpose of the FDIC. The FDIC was set up to assure depositors that they would not have to worry about their deposits in case their bank failed precluding a run on the banks. What is all the clamor about rescuing the banks? I could not give a damn if banks fail--just make sure the depositors can get their money. The only problem is the people who would lose their jobs. But it happens every day that businesses fail or relocate, and people lose jobs. So why should banks be treated/ rewarded for the mess that they created? There are banks out there that are very well run and well managed. The bad banks executives are swindlers, crooks, and thieves and belong with their bosom buddies in government striped uniforms, in government subsidized housing, which are called prisons.

Yes, nationalize. The "big boys" have had their chance and have shown utter contempt to the average (middle-class or less) citizen in this country. When is enough, enough?

We should nationalize. That way, I can get loans, buy whatever I want, and then have the loans converted over to grants. The government can print all the money we need and everything will be good again. The banks will not be able to just say no anymore.

Okay, so let's take all the bad assets, not just the FDIC insured ones. We're at trillions of debt, so let's see how high we can go. Maybe we can increase the U.S. tax rate to that of infamous 1918; 70%-plus tax isn't bad, right?

Bankruptcy is a great way to clean out the banks who made bad choices. Think of it as the super garage sale, and it isn't on the U.S. government's dime.

Playing the game of Clue?

Why is it that each day, we the taxpayers are caught in the middle of a game of Clue with the banks?

If we (Club Fed) don’t ask specific questions, the banks won’t reveal their incriminating cards until after the monetary crime has been committed.

So with AIG, we didn’t ask Colonel "Edward Libby" Mustard if there were any golden-covered lead pipes (aka, retention bonuses) in his back pocket, while he slipped them quietly into the study where Mr. White, Miss Scarlett, and the rest of the motley crew were quietly waiting.

You just wait until we (the taxpayer) read'em and weep when Professor "Ken Lewis" Plumb, drops his Merrill Lynch cards on the table.

What other cards are going to drop with a thud on the table?

Bank "bailouts," as they are called, are a misrepresentation of the truth. Many banks that received TARP funds from the government did not want the funds in the first place. Healthy banks such as Regions Bank and BB&T; (both big banks in the southeast U.S.) that were not affected by the subprime crisis were "strongly urged" to take the TARP loans.

That's right, "loans." Now, those banks are telling their shareholders that they plan on paying back the TARP loans "as soon as the government will let them." Couple that with talk of capitalizing those loans into common stock, and thus government ownership or nationalization, and you have the makings of a juicy conspiracy theory: "The U.S. Congress and the Obama Administration are planning to nationalize the largest U.S. banks permanently and end any privatization of the financial system." Why? Simply put, to strengthen their position of power at a time when America is at its weakest. I really hope I'm wrong about that.

"Nationalism is power hunger tempered by self-deception"--George Orwell, Author

"But a Constitution of Government once changed from freedom, can never be restored. Liberty once lost, is lost forever."--John Adams, 2nd President of the United States.