Stiglitz Says U.S. Is Paying for Failure to Nationalize Banks

[marmar]

Stiglitz Says U.S. Is Paying for Failure to Nationalize Banks
By Bloomberg News


Nov. 1 (Bloomberg) -- Nobel Prize-winning economist Joseph Stiglitz said the world’s biggest economy is suffering because of the U.S. government’s failure to nationalize banks during the financial crisis.

“It we had done the right thing, we would be able to have more influence over the banks,” Stiglitz told reporters at an economic conference in Shanghai yesterday. “They would be lending and the economy would be stronger.”

Stiglitz has stuck with his view even after the U.S. economy returned to growth in the third quarter and as banks’ share prices climbed this year. President Barack Obama said on Oct. 24 that the nation’s lenders, supported by taxpayers in the crisis, need to “fulfill their responsibility” by lending to small businesses still struggling to get credit.

Companies such as Citigroup Inc. and Bank of America Corp. benefited from a $700 billion taxpayer-funded bailout package last year. In contrast, Obama said that too many small businesses are still short of money, adding that his administration will “take every appropriate step” to encourage banks to lend.

“We have this very strange situation today in America where we have given banks hundreds of billions of dollars and the president has to beg the banks to lend and they refuse,” Stiglitz said yesterday. “What we did was the wrong thing. It has weakened the economy and has increased our deficit, making it more difficult for the future.” .............(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=a1GMxUFBOhrY&pos=5

[mbperrin]

1. Glad to see someone is still sticking to their guns.

This so-called recovery has increased enrollment in food stamps in Texas by 40% over the same period last year.

And that's just ONE number.

[JCMach1]

2. Let's just see if CITI bails out Dubai again... watch for it!!!

Their bonds come due in Dec.

[Union Yes]

3. America will regret the bad decision to not nationalize ALL banking.

[dkf]

4. How much of the problem is the end of securitization?

Were these banks keeping these loans prior to this mess or were they pooling them and selling to investors? Maybe our problem is that investors no longer want to buy these loans so no one is making them any more. If the Government wanted to guarantee all small business loans or lines of credit I'm sure the market would open up for them, which is kind of the similar to nationalizing them.

[FormerDittoHead]

5. These "rugged individualists" were BUST and came WANTING A HAND OUT - now they're the "elite" again.

That's the fucking icing on the cake.

What pisses me off is that Washington had no problem giving them money hand over fist, no questions asked, then turn around and then our society worships their wealth and prestige.

But if, in any number of ways, you go to DC asking for money, they'd make you jump through 1,000 flaming hoops, tell you exactly what you can and can't spend the money on, give you as little as possible so that most people don't even bother, then people go on referring to you like you're what's wrong with our society.

Most people I know REALLY don't like the IDEA of people gaming welfare, but these bankers did it on an unimaginable scale.

[glitch]

6. Best DU subject line ever. nt

[Laelth]

7. k&r for the truth and for right action.

We should have nationalized failing financial institutions.

:dem:

-Laelth