Tuesday, March 10, 2009

Nationalization vs. national pride

It occurred to me while reading Ezra Klein's post on the political risks of bank nationalization that nationalization wouldn't be such a big issue if we were talking about corporations other than Citigroup, Bank of America, and their brethren.

Back in the late 80s when the S&L meltdown happened, I doubt that there was as much concern about the government taking over insolvent savings and loans. And there's not much outcry now when the FDIC takes over smaller institutions during this crisis.

My guess is that a lot of the resistance to putting the big U.S. banks into receivership has to do with them being symbols of American power. Their failure would suggest to some that our financial might is diminished... and you know how men feel about being made to feel small. :-)

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