Re: [Pen-l] "Has Barack Obama’s presidency already failed?"

[Doug Henwood <dhenwood@xxxxxxxxx>]

On Feb 11, 2009, at 4:09 PM, raghu wrote:

> WHY IS OBAMA BEING SUCH A
> DAMN PUSSY????

<http://www.abcnews.go.com/Politics/Business/Story?id=6844330&page=1>

MORAN: There are a lot of economists who look at these banks and they  
say all that garbage that's in them renders them essentially  
insolvent. Why not just nationalize the banks?

OBAMA: Well, you know, it's interesting. There are two countries who  
have gone through some big financial crises over the last decade or  
two. One was Japan, which never really acknowledged the scale and  
magnitude of the problems in their banking system and that resulted in  
what's called "The Lost Decade." They kept on trying to paper over the  
problems. The markets sort of stayed up because the Japanese  
government kept on pumping money in. But, eventually, nothing happened  
and they didn't see any growth whatsoever.

Sweden, on the other hand, had a problem like this. They took over the  
banks, nationalized them, got rid of the bad assets, resold the banks  
and, a couple years later, they were going again. So you'd think  
looking at it, Sweden looks like a good model. Here's the problem;  
Sweden had like five banks. [LAUGHS] We've got thousands of banks. You  
know, the scale of the U.S. economy and the capital markets are so  
vast and the problems in terms of managing and overseeing anything of  
that scale, I think, would -- our assessment was that it wouldn't make  
sense. And we also have different traditions in this country.

Obviously, Sweden has a different set of cultures in terms of how the  
government relates to markets and America's different. And we want to  
retain a strong sense of that private capital fulfilling the core --  
core investment needs of this country.

And so, what we've tried to do is to apply some of the tough love  
that's going to be necessary, but do it in a way that's also  
recognizing we've got big private capital markets and ultimately  
that's going to be the key to getting credit flowing again.
_______________________________________________
pen-l mailing list
pen-l@xxxxxxxxxxxxxxxxxx
https://lists.csuchico.edu/mailman/listinfo/pen-l