Current Event 3 (3rd Quarter)

• Due to the recession, some new ideas are being introduced in the United States that would have otherwise been deemed too socialistic. Ideas such as the nationalization of banks were never before considered to the extent it is being declared necessary today. The nationalization of banks would lead to the dilution of the value of privately owned shares, as well as having creditors wiped out with a complete takeover, as stated in this Washington Post editorial. The editor is very fearful of the consequences of having the big banks, like Bank of America and Citigroup, taken over and nationalized. The government takeover of banks would mark a drastic change that has been foreshadowed for a while now as our capitalistic system has finally shown the major signs of having become a socialist nation. Coupled with the bailout plan, the government has really reached its arms out and taken control of the American economy.

• I, personally, believe that the banks had their chance. These banks had plenty of time to stabilize and safeguard their properties, but they didn’t. Instead these very same giants spent their money with reckless abandon and no regard for the safe keeping of their shareholders and creditors. Their investments in shaky businesses led to the economic crisis becoming more dangerous than a normal recession. These banks had their chance to reform and fix themselves, but they failed, and thus it is now the governments turn to take control of these banks and see what can be done to fix the deteriorating economic situation. If the government’s takeover really does go according to plan and the consumer’s confidence is restored, then maybe in the future banks will be a little more careful with where they spend their money.
  
• Maybe.