Monday, February 23, 2009

Krugman Suggests "Pre-Privatization"

Well a blog called Calculated Risks suggests it, but Krugman writes about it in this NYTimes article. Basically he says that the FDIC has been taking over insolvent (read: not enough cash) banks at a rate of about 2 per week. They take them, expose all their bad loans, debts, etc. and then resell them to the private sector. This is exactly what we need right now as these big banks are basically dead man walking banks, just waiting for the other shoe to drop. That's why they aren't lending (they can't - no money) and why we are beginning to see a stagnating economy.

I guess we could just let the private sector take care of it, as we can see from the last 8 years how well leaving the banking industry free to their own accords really seems to do the trick. 

No comments: