Dear Mr. Krugman,

[FrenchieCat]

President Obama as chosen not to nationalize the banks as his first option in
fixing the American Financial markets.

As you yourself might admit, there are real risks in a nationalization scheme due to unknown consequences of attempting to attract investors to invest into a financial system which discourages profit making incentives.

The difficulty of not knowing what happens when operating in a mixed market (nationalized vs. private) economy in the US when 1/2 of the banks are nationalized and 1/2 are not, is another factor. They are other unknowns which can only remain unseen until the action is taken. It appears that President Obama is not interested in putting up a plan in where he has no control of various unintended consequences that may be on the horizon.

As President Obama is a Capitalist, not a Socialist, he has opted for a different plan, set up to incentivise investors, provide taxpayers with a mechanism where they can recoup on some of their investments (as opposed to none), stop the market bleeding, decrease 401K loses, while putting a new regulatory framework in place, yet providing a mechanism for failed companies via receivership to be technically handled as nationalized by the government.

In early April, President Obama plans on going to the G20 Summit to forge an international agreement where Foreign nations are made comfortable in investing in America once again without fears, by providing evidence that their money is safe at this point, even though the United States was chiefly responsible for the financial meltdown to begin with.

Mr. Krugman, if you want to run for President next time, you should....
I'd suggest that you run on a platform of nationalizing the American Financial System,
and if you become President, be listed in the history books as
The First President to ever Nationalize Banks in a Capitalistic society.

Those who are your disciples are perhaps simply unused to, after 8 years of Bush,
of a President who is interested in using a balanced approach,
and not being simply an individual on the take who isn't interested in doing
what good for all parties involved while minimizing risks and loses in what was a fucked up situation.

President Obama is presenting a straight forward solution aimed at the problem that needs solving,
as opposed to compounding the problem by creating new problems which would without doubt come
from applying a short cut solution such as nationalizing some banks and not others,
and believe that this wouldn't affect the confidence of all of our financial institutions
as well as those invested in the American Market.

Mr. Obama has chosen to balance his proposal between the needs of Wall Street and that of Main Street, in order that each can profit from the other in a long run, which is what a good solid financial system should do, and what it hasn't done in a long time. Mr. Obama has decided to shore up the foundation of our financial system as opposed to shifting that foundation to unknown territory, which in reality is what you are advocating.

Respectfully,

XXXXXXXXXXXXXXXXX

My Case against Nationalization of the American financial system for your perusal:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x8282342

[phantom power]

1. Wow, you really nailed him...

:boring:

[sui generis]

2. ack!

http://3.bp.blogspot.com/_criTrWubGmM/SRRg_ZNbuYI/AAAAAAAAAWY/RnZd-R1XWiU/s320/Cathy+ACK!!.jpg

Telepathy should be outlawed, along with Telekinesis and Teleportation and Tele-Tubbies. Discuss.

[FrenchieCat]

3. Do you have a comment beyond a non comment?

That would be useful.

[phantom power]

22. I have two comments:

First, your argument regarding capitalism holds no water. A president is free to use any kind of economic solution to solve problems. Furthermore, what, exactly, is "capitalist" about throwing trillions of dollars at the banking industry? We've already nationalized them. We own them. Pretending we don't is just abdicating authority to the same wizards who screwed up in the first place. Krugman is asking why, which I think is just a common-sense question.

Secondly, admonishing Krugman that he should run for president if he disagrees with Obama is a ridiculous line of argument. That would be like some Freeper telling you to run for president if you disagree with something that Bush did.

[FrenchieCat]

35. Krugman is a public figure at this point.

At some juncture he should give Obama's plan a chance to take effect to see where it takes us,
or he becomes a part of the problem.

Krugman was mentioned as a question to Mr. Gibbs today, so it is known that he isn't your ordinary joe.

So no, this is not like what if some freeper said something to me.

[phantom power]

42. I think I'll stick with this principle:

Everybody gets to disagree with our government. Everybody. Even if they're famous.

That whole "public disagreement causes trouble" argument was one of the things I felt was repellent about the Bush administration. Anybody remember Ari Fleischer admonishing us to "watch what we say, watch what we do?"

do. not. want.

[cali]

75. he has absolutely zero obligation to give Obama's plan a chance.

Nor does disagreeing with Obama make him the enemy- or part of the problem. Your thinking here is tres bushian.

[FrenchieCat]

4. Didn't think so!

[MannyGoldstein]

5. The Paulson/Summers/Geithner Plan Has Never Been Tried

Temporary nationalization, on the other hand, has worked a bunch of times (Sweden, S&L crisis, Great Depression...). I know of no times when nationalization has failed.

Do we really want an experiment here? Particularly when it's underlying assumption is that the same people in the same situation will act directly opposite of how they acted last time?

[vaberella]

At one point or another nationalization was an experiment.

Second point is that the US doesn't have the same set up as Sweden and the dynamics of the Great Depression may have some similarity to today but in general and specifically are wholly different.

[MannyGoldstein]

8. In What Way Is Sweden Different That's Relevant Here?

If anything, the risk is greater here, so there's more reason to do what's known to often/usually/always work.

[FrenchieCat]

10. IMO, Nationalization should be the last option, not the first.

period.

As Mr. Krugman himself wrote....."some decision must be reached on bank liabilities. Sweden guaranteed all of them. If forced to say, I would go the Swedish route; but of course we can’t do that unless we’re prepared to put all troubled banks in receivership. And I’m ready to be persuaded that some debts should not be honored — this is a deeply technical question."

In otherwords, Mr. Krugman doesn't have a real answer on this.

[MannyGoldstein]

20. Not Exactly

If you ask me if Windows can be used as the embedded OS in a FDA Class III medical device, if forced to say, I'd say no. But the answer is actually very complicated. I'm not saying that I don't know whether or not it can for a given device, simply that a simple question doesn't necessarily have a simple answer, unless you insist on one.

BTW, do you really have a girl graduating from Harvard this year?

[FrenchieCat]

28. Yes, she is graduating in June from Harvard.

She's going on to U of Washington in St. Louis in a PHD program as of August with a full fellowship....grace to the Obama stimulus package money dedicated to research.

This is my way of celebrating her achievement and finding an outlet for the mother's pride that I have in her!

[MannyGoldstein]

38. That's Fantastic

My sister went to Harvard, amazing school (obviously). What I thought was great is that, at least when she was there, the faculty was cheering the students on and really wanted them to do well and graduate, and virtually all of them did graduate. I went to Cornell Engineering, where the faculty felt that expelling students was a grand sport; half of my freshman class flunked out by graduation, which was despicable for a school that only accepted one in five applicants.

I actually live about 2 miles from Harvard, upstream on the Charles in Newton. I'd offer try to get a DU gathering together during your visit, but I expect you'll be fully booked.

[FrenchieCat]

44. Thanks you. It will be a worldwind when we are there.

She didn't live on campus the last year, she lives in allston instead.

My daughter was better at networking the professors than she was at networking with students. LOL. It seem to have helped her quite a bit along with interning in research labs every summer since she's been there!

She married a Class of Harvard '07 last summer (yes, they are young, but they were in love).
He works at Tufts now.

She's a fortunate child. Things have a way of usually working out for the best for her.
Wish I was so lucky....but oh well. :)

[high density]

15. Is there some reason why the Treasury Department can't try their plan and see what happens?

This is not the same situation we've been at before. Geithner is creating a market for toxic assets with the Federal Government insuring against some losses. TARP money ultimately went to providing liquidity to the banks, even if that was not its original intent. With most of that money spent, the idea remains to get rid of these bad assets so that the banks can start lending again. This process is going to happen even if the troubled banks are nationalized.

[MannyGoldstein]

18. Big Reason - It Costs *You* A Fortune And We Have No Idea If It Works

Why on Earth would we want to try an experiment when there's an alternative that's worked in the past?

[FrenchieCat]

21. Even Krugman doesn't claim to guarantee the actions he recommends,

why should you?

[MannyGoldstein]

23. Let's Say That A Patient Has A Life-Threatning Cardiac Arrythmia

They can have a defibrillator implanted that almost always works in the case of a sudden cardiac arrest, with minimal side effects. Or they can try an experimental new drug, of unknown efficacy and side effects. Which would you suggest?

[FrenchieCat]

25. Because this patient has a unique ailment not identical to anything know before,

and there is no way to insure that the stand by solution will work any better than the more innovative invention at this time.

What is known is that if the new solution doesn't work, the patient will not die, and the old stand by can then be used.

Also once the old solution that almost always worked is utilized, there are no other recourse.

What is also known is that the psychological effects on the patient of using the solution that almost works may be detrimental and possibly harmful to the patient health in its own right.

[high density]

26. Nationalization is going to cost us a huge fortune as well

You think these troubled magically assets just go away if we nationalize the banks? We're either going to pay for them now, pay for them after nationalization, or do nothing. Doing nothing is what Japan in the 1990s did and their economy is still limping. Nobody considers that to be an option except for some crazy Republicans.

The money will be spent to create a market for these troubled assets and the only point being debated now is whether or not it should be done before or after nationalization. Treasury has decided to try it now. We're America; we experiment all the time. Sometimes it gets us into messes like the current one, and sometimes we do things that put a man on the moon.

[Democrats_win]

6. How will Obama's or even Krugman's plan help the people of America?

They won't. These plans continue the policy of debt slavery. Who moves America forward? We the people! As long as the people are slaves, no plan that ultimately benefits the bankers will save America.

Save the People, save America!

[JHB]

7. We routinely "nationalize the financial system"... it's called "receivership"

It's how we ended the S&L crisis.

If you're going to argue with Krugman's view, then argue against it and not a strw man you've set up.

President Obama has a lot on the ball, that's why I supported him. But he the economic officials and advisors he has chosen are part of the same inbred culture (in some cases even the same people) who advocated the very measures that caused this mess.

So don't scold Krugman or anyone else for arguing that the President may only be treading water and not pulling us to shore.

[FrenchieCat]

11. President Obama has a receivership prong to his plan.

and note that I am not scolding Mr. Krugman,
just letting him know that he isn't the only one
with workable solutions.

[jaxx]

9. Now that's what I call sense!

Thanks.

[endarkenment]

12. Having failed to secure the chicken coup

which now, being full of foxes, is failing to produce eggs, the least risky approach is to put the foxes already in the coup in charge of maintaining an orderly slaughter of the remaining hens.

Some plan.

[DJ13]

13. I dont have a problem with Obama giving Geithner a chance

What I object to is Obama removing the possibility of nationalization from being a potential alternative in the future should Geithner's plan not work.

Having nationalization as a possibility should the banks continue to fail at working to improve our economy is a tragic mistake.

We need the threat hanging over the bank executives heads to keep them in line.

[FrenchieCat]

14. That is what the receivership aspect of his plan does.....

and I don't think that President Obama has stated that if what he is doing doesn't work,
he is not willing to consider other alternatives, including nationalization.

[MarjorieG]

24. When people know a little or not even, why reflexively trust Krugman, just because he says so

Emphatically, simplistically and emotionally. Jeez.

Thanks for this, and every other attempt at bursting the bubble.

[DemocratSinceBirth]

16. Dear Mr Krugman

I wish I was smart enough to win a Nobel Prize, write several books, write a column for the NYT, and teach Economics at Princeton.

[FrenchieCat]

19. There are many smart people in this world.

I don't believe that Mr. Krugman would argue that he is not the only one with ideas
that will rescue this economy.

Mr. Krugman is an accomplished person,
but he is not the only one,
and I'm sure that he would be the first one to say so,
as it would smack as an air of superiority that isn't warranted,
to think otherwise, IMO.

Barack Obama has staked his Presidency on rescuing the economy,
something he was elected to do.
I think he is as serious, if not more so than anyone else.

Educated people can and should agree to disagree.

[tblue]

17. No comment.

You always ignore me though I've reached out to you & tried to be friends. Good luck.

[w4rma]

27. Geither and Summers are socializing costs and paying out their profits with our tax dollars.

This is BS and you know it, FrenchieCat. For all of your unwavering support of Obama on everything, you have to know that he's screwing up big time on this.

Those people are con-artists: All they see are $$$ signs and a chance to take down a Democratic administration.

[FrenchieCat]

32. Tax dollars? Not ours, but that of our children and grandchildren.....

as we owe trillions already to foreign government via our Government Debt....

I don't buy the old "MY money" Bush way of putting it.

I believe that this upfront investment will pay off on the back end,
and end up reducing the exact taxpayer's money that you are speaking of,
the future taxpayers.

[w4rma]

33. Con-artists: All they see are $$$ signs and a chance to take down a Democratic administration.

I'm just going to repeat myself for emphasis.

[debbierlus]

29. Capitalists let the system work and allow the investors & banks take their hits

They don't publicize loss and privatize profit.

It is surreal, beyond surreal, to watch people defend Obama's bailout of the corporatist sleaze and criminal wealth.

This is a scam.

[FrenchieCat]

36. You support Nader.

We got it!

[depakid]

55. It's amusing that Nader is used as an epithet or shibboleth

Considering the he was right about financial policy, and Obama's team has uniformly been wrong. Or been failures. Or both.

So much for meritocracy.

[CTLawGuy]

70. three things

1. They are not making a profit on these assets.

2. The banks need the money to loan to people so that they can buy things again. This is because no one is willing to buy these assets, which would give the money to the banks to loan. The government can buy the assets, hold them for up to 30 years and collect the payments and get most of the money back.

3. The default rate on these subprime mortgages backing these assets is about 15% (compared to 1% for regular loans). So the taxpayer will get most of the money back.

[AllentownJake]

30. Dear Mr. Krugman

Thank you for speaking up against Bush's bad policies. A democrat is in charge now so we'd like you to shut up even if you disagree with him.

:sarcasm:

[LittleBlue]

31. Cash for trash simply dumps part of the problem in our lap

the taxpayer. Privatize gains, socialize losses-- this is Paulson part 2.

[nichomachus]

34. I just want to know how much of the bailout money

Geithner used to hire people to go onto the liberal blogs and trash Krugman.

Almost every site you go to has a whole bunch of them -- and they are all talking from the same set of talking points. Very strange. Just like the wingers during the Bush years.

[FrenchieCat]

37. I think you overestimate the popularity of Mr. Krugman.....

which is a problem in itself....since he is not the President of the United states.

I think that some folks have heard Mr. Krugman out and at some point decided that he was more of a hinder than a help in reference to his suggestions.

As policy was being formed, I think that Krugman weighting on a daily basis was a good thing.

I think that now that Mr. Obama has opt for a particular plan, Mr. Krugman has a few choices, one is to wait and see (since Mr. Krugman himself couldn't guarantee his plan 100%) and comment without judgment as it takes shape.

His other option is to continue to criticize something that has been decided on,
and become part of the problem, i.e., a thorn in the President's side simply because he can.

It's his call.
But folks can comment on that call.


Far as my points made, I came up with them all by myself....
and if you are suggesting otherwise, you are dead wrong.

[sui generis]

39. I don't know about the absolutes you indicate

"either or", and "only other option".

Those don't line up nicely with reality. I get that Krugman can harm "Obama's" policies by not blindly endorsing them, but Obama does not get high grades from me on any of his economic tactics.

I like where Obama's principles are, for the most part, but the naivete is starting to show. We cannot have single payer universal health insurance that is employer centric; because now Obama is endorsing getting compensated in health insurance. Not much different from scrip. I'd rather have the amount withheld with taxes but ONLY if the gummint can promise that "Universal Health" funds will only be used for healthcare.

The total bonehead aftermath of this last AIG tranche, the initial call by Obama to manage by reaction and 20/20 hindsight; the willingness to entertain that the level of public outrage somehow trumps the rule and weight of contract law - all deeply naive.

I have not followed every nuance every day I'll admit but there are some cases in which the outcome does not require a titular Ph.D or Mr. President as part of one's name. I agree with you on one point completely: only time will tell. We've set that ball in motion. Moving the balance beam when Nadia is in the air on her second backflip tsukahara with a lemon twist ain't fair to Nadia, or the audience.

:P

[nichomachus]

40. Well, if you prefer a tax cheat to a Nobel prize winner -- good luck

[FrenchieCat]

46. Cheap shot not worthy.

[Norrin Radd]

74. "Disciple" is also a cheap shot.

[AllentownJake]

41. If Krugman was part of the administration I'd agree with you

He's a columnist and he's paid for his opinion. Therefore he should give it honestly.

[Mithreal]

50. First Amendment is a strong argument. nt

[Mithreal]

43. When the FDIC takes over failed banks, isn't that nationalizing them?

How is what Krugman has suggested scarier than what the FDIC does?

And isn't all this nationalizations fearmongering really a Rightwing argument?

What does Krugman know about economics anyway? I read on DU that he was a PUMA.

Other than that I think I agree with your sentiment.

[FrenchieCat]

49. If when the FDIC takes over failed banks, it is nationalizing them,

then Krugman would see the good in Obama's plan, regardless of the label used to describe such action, no?

[Mithreal]

54. Are you calling the President's plan a hybrid nationalization scheme? nt

[FrenchieCat]

67. To a degree, yes.

But one that doesn't bring on panic.

[Mithreal]

73. Alrighty, I will consider that idea as I read more of the plans. nt

[Larkspur]

45. Dear Obama Fanatic

Grow a thick skin. Dissent is patriotic and your attempts to browbeat those of us you criticize Obama is not in sync with Obama who welcomed dissent.

[FrenchieCat]

47. Dear Krugmanphiles....

Grow a thick skin. Dissent is patriotic and your attempts to browbeat those who criticize Mr. Krugman (although my letter did no such thing) is not in sync with what you preach about others needing to welcome dissent.

[Larkspur]

51. Yes, you challeged Krugman to run for the Presidency

It was a snide way, which is your typical style, to try to undercut Krugman's credibility.

[FrenchieCat]

57. And Krugman snidely announced that Obama's plan was a failure.....

And Krugman snidely announced that Obama's plan was a failure.....

But you knew that, right?

What's good for the goose, is good for the gander, no?

[Larkspur]

69. Unlike Obama fanatics, Krugman is not in a ego battle with Obama

He's a professional economist, who along with Baker, Galbraith, Atrios and others, see Geithner's plan as a rehash of Hank Paulson's plan. Unlike the days of Bush's first Admin, Krugman today is not a lone voice in the wilderness. He's got credible allies siding with him. Obama has stuck himself with Wall Street toadies, who already have been proven wrong about the political fallout from teh AIG bonuses.

[countingbluecars]

48. The poster has a right to her opinion.

How is this browbeating you? Perhaps you need to grow a thicker skin.

[Larkspur]

52. I have a thick skin

Just helping the Obama fanatics grow one too.

[FrenchieCat]

58. Krugmanphiles are kind of superior, aren't they?

They don't have a problem telling others what to do,
while calling it help.

How right of you!

[Larkspur]

68. Obama fanatics just can't take the heat of dissent and criticism

Almost makes me feel sorry for them. Not!

[KittyWampus]

53. LOL! Nationalizing and restructing banks IS CAPITALISM. It's done all the time. We did it in Reagan

era.

[Political Heretic]

56. Perhaps you can give a working definition of "nationalization" as you mean it?

[FrenchieCat]

59. Seems like Mr. Krugman did that already.

[Political Heretic]

60. Well, Krugman isn't advocating for total system nationalization, so I was trying to find out

What you were arguing against...

[endarkenment]

63. Whatever the OP means, it must be VERY BAD.

And no president of these united states has ever nationalized anything, or any bank, or any banks except that thing in the '80's with the S&Ls, or ... http://en.wikipedia.org/wiki/Nationalization#United_States

Well never mind that, this is now and nationalizing sounds really scary and socialistic and very risky, except of course our friends over in Great Britain nationalized a bunch of banks just recently and they are still not fully communistic (yet.) But I agree, very scary. Shit. Nationalize. Scary. Bad.

[Phx_Dem]

61. Good letter Frenchie. Did you actually send it to him?

[FrenchieCat]

62. Not yet.

But I will.

[Impedimentus]

64. Time dissipates ...

to shining aether the solid angularity of fact.

R.W. Emerson

[Uzybone]

65. Making more sense than the grunts of the naysayers and whiners

Nice letter to Krugman.

[Cha]

66. Thank you for laying all this

out in an exceptional letter to Krugman, Frenchie.

And, helping me to understand more of the Economic aspect of our dire straights, that the bush cabal got us into, to boot.

[Political Tiger]

71. K & R!

:headbang:

[firedupdem]

72. K & R n/t